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Andreessen Horowitz Invests $80 Million in Twitter

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February 09, 2011

Andreessen Horowitz Invests $80 Million in Twitter

By Jamie Epstein, TMCnet Web Editor

Kara Swisher (News - Alert) has just announced that Silicon Valley's rapidly expanding venture firm, Andreessen Horowitz, now owns an $80 million stake in Twitter.

Andreessen Horowitz went about this acquisition by purchasing stock in secondary markets which are increasingly becoming the perfect place for VCs to take over immense segments of growing startups , without ever having to participate in leading a financing round.

For example, Eleveation Partners bought a $120 million worth of Facebook (News - Alert) stock last summer from side markets. They bought in at somewhere around a $25 billion valuation. Now Facebook is worth $50 billion, according to Goldman Sachs.

This purchase comes as a surprise to many as Andressen Horowitz was not a participant in the recent $200 million fundraising venture, at the San Francisco microblogging company, led by Kleiner Perkins.

Sources said that the firm made the move because it is already deeply invested in other key companies in the social space, including gaming giant Zynga, location-focused Foursquare (News - Alert), discounting phenom Groupon and general social networking behemoth Facebook, the article stated.

The investment by the firm gives Twitter a huge boost, while the company is in the midst of designing a successful business model for itself. If Twitter intends to stay an independent operation, this was a great move.

Recently, Twitter raised $35 million in venture capital, bringing the start-up’s total funding to $55 million, a New York Times article stated. The new money was from Institutional Venture Partners and Benchmark Capital.

Jamie Epstein is a TMCnet Web Editor. Previously she interned at News 12 Long Island as a reporter's assistant. After working as an administrative assistant for a year, she joined TMC (News - Alert) as a Web editor for TMCnet. Jamie grew up on the North Shore of Long Island and holds a bachelor's degree in mass communication with a concentration in broadcasting from Five Towns College. To read more of her articles, please visit her columnist page.

Edited by Jamie Epstein

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