Andreessen Horowitz is openly courting capital from Saudi Arabia despite strained relations between the U.S. and the Middle Eastern country.
During a conference, Marc Andreessen and Ben Horowitz appeared on stage with WeWork co-founder Adam Neumann to discuss their firm's $350 million investment in Flow, Neumann's residential real estate company. The conference was organised by a nonprofit backed by a Saudi sovereign wealth fund, with suggestions that Flow may launch in the Kingdom.
Horowitz praised Saudi Arabia as a "startup country" and called its ruler, his royal highness, a "founder". Neumann also spoke glowingly of Saudi Arabia's leadership. Venture firms are often secretive about any ties to the region, making these public comments from Horowitz notable.
Out of the 206 deals that a16z participated in last year, almost a quarter went to fintech companies — more than any other industry. Sixty per cent of these fintech investments closed in the first half of 2022, with the remainder closing in the second half of the year.
It is not surprising that Andreessen Horowitz would be looking to cement relationships in Saudi Arabia, given that sovereign wealth funds from the region have previously helped boost the firm's assets under management. However, venture firms, which often portray themselves as more virtuous than other asset providers, have remained secretive about any ties to the region. This makes Andreessen Horowitz's public praise of Saudi Arabia all the more notable.
It could be seen as a sign that the firm is aligning itself with other global investment firms that are unapologetic about their relationships with the oil-rich region. It could also suggest that the firm is betting that the US will be forced to reconsider its relationship with Saudi Arabia despite its repressive regime.