New Bio Fund Partner Describes A16Z Investment Strategy

When Marc Andreessen and Ben Horowitz founded their namesake venture firm in 2009, they laid out a clear-but-narrow vision for investing in a new wave of Web-based innovation.

Andreessen, in particular, espoused a net-centric view that was absolute. “No clean tech, no rocket ships, no electric cars. No China or India,” he told Fortune magazine at the time. Biotech likewise was out of the question. In the six years since then, Andreessen Horowitz has grown into a $4 billion VC, and established itself as a leading tech investor. Andreessen’s observation that “software is eating the world” has become an industry axiom, as Web-based services have invaded and taken over financial services, education, and a host of other sectors.

Now the venture firm also known as A16Z has formed a new $200 million fund to make software investments at the intersection of tech and life sciences, where software companies are developing new ways analyze and process data for biotech and healthcare companies. Money for the firm’s new bio-fund was all new, raised from existing limited partners and not by carving out funding from A16Z’s flagship venture or opportunities funds.

One of the firm’s first investments is TwoXar, a Palo Alto, CA-based tech startup using proprietary algorithms to analyze biological data in both public and proprietary databases with the goal of identifying previously unknown effects of drug candidates in early stage discovery. The idea is to point the way to compounds that could be developed as new drugs for metabolic and neurological disorders.

TwoXar “fits our investment thesis in that they use machine learning and cloud biology,” said Vijay Pande, who joined Andreessen Horowitz as a general partner dedicated to the bio fund.

Vijay Pande
Vijay Pande

Pande has defined “cloud biology” as much like cloud computing. In addition to providing computational services, though, Pande has said that Web-based programs also can be used to carry out automated experiments more precisely and consistently than lab technicians (enabling biotech companies to optimize the reproducibility of their scientific results).  At Stanford, where Pande was previously a scientist, his lab specialized in

Pages: Page 1, Page 2

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.