Andreessen Horowitz is now openly seeking capital from Saudi Arabia despite US pressure.
According to Bloomberg, Marc Andreessen and Ben Horowitz took the stage with WeWork co-founder Adam Neumann yesterday to announce their company’s move into Flow, Neumann’s new residential real estate company, for the second time since at least November. talked about its $350 million investment. Their choice of venue was intentional. The conference was organized by a nonprofit backed by one of Saudi Arabia’s largest sovereign funds, and Flow could be launched in Saudi Arabia, Bloomberg says. Horowitz, on the other hand, hailed Saudi Arabia as a “startup nation,” saying, “Saudi Arabia has a founder. You don’t call him a founder. You call him Your Highness.”
Neumann said separately:
I sent a related question to Andreessen Horowitz this morning and have yet to receive a response.
It’s no surprise that a company of the size and interest of Andreessen Horowitz is looking to strengthen its ties in Saudi Arabia. The 14-year-old outfit has never disclosed who his partners with Limited have been, but it is said that the region’s sovereign wealth funds have helped push the company’s assets under management to his $35 billion overall. Even if it were revealed, no one would grab their pearl. lots of funds. Ben Horowitz said she spoke at an investment conference called “Davos in the Desert” in Riyadh in October, which usually means someone is on the market (or sponsored) for more money. It is a clue.
For a more explicit relationship, in 2016 both Andreessen Horowitz and Founders Fund sold a portion of their stake in ridesharing company Lyft to Saudi Arabian Prince al-Waleed bin Talal and his Kingdom Holdings. In 2017, Marc Andreessen also joined forces with the prince’s cousin, Saudi Crown Prince Mohammed bin Salman (“MBS”), agreeing to join the advisory board of MBS’ ambitious project Neom. As the WSJ describes it, it traverses “an area the size of Massachusetts.”
He didn’t say if Andreessen resigned from the same commission in 2018 after concluding that MBS ordered the gruesome murder of Washington Post columnist Jamal Khashoggi. Neither did other prominent Neom advisory board members, including Travis Kalanick, Sam Altman, and then-Apple design chief Jony Ive. More broadly, U.S. investors and startup founders with business interests linked to Saudi Arabia protracted in 2018, and the Saudi-led military and economic war against Yemen also made headlines for its atrocities. Even though I was gathering, I didn’t speak.
Throughout that time, many of America’s largest corporations have continued to operate in the region. KKR and the Public Investment Fund of Saudi Arabia regularly work together. JP Morgan just expanded its operations in Saudi Arabia late last year.
Still, venture firms tend to call themselves more virtuous than other asset providers to get founders, but have been a bit silent about their ties to the region. Even more notable are comments made by Ben Horowitz at the event. From the story:
on the conference stage. Horowitz said it made waves after Andreessen, co-founder of their eponymous venture capital firm, wrote a blog post claiming it was “time to build” in 2020. lamented that not much has changed in the United States. The U.S. government contacted Mark and talked to him about it, but absolutely nothing happened,” Horowitz said.
But when Horowitz visited Saudi Arabia in October to have lunch with Saudi Arabia’s Princess Reema bint Bandar Al Saud and most recently meet Yasir Al-Rumayyan, president of the Sovereign Wealth Fund, they were enthused.
Al-Rumayyan told him, “Let’s go,” and “within a week we had six very interesting meetings set up,” Horowitz said. “In April, we will bring our company to Saudi Arabia, and that is the startup feel.”
Andreessen Horowitz appears to be partnering with other global investment firms by openly praising his connections in Saudi Arabia. They may think that if they can do it, so can we.
Andreessen Horowitz may also be betting that the US will be forced to rethink its relationship with Saudi Arabia despite its repressive regime. Think about it: After President Joe Biden reluctantly visited his MBS last summer and asked for lower gas prices, MBS instead raised prices in a show of power during the US midterm elections.
To give MBS more power, a U.S. federal court said in December it would dismiss a case against the crown prince over Khashoggi’s murder after he was named prime minister of Saudi Arabia by his father. Although he was the de facto ruler, the move granted him an exemption under U.S. State Department standards.)
It will be interesting to see if other influential ventures follow Andreessen Horowitz’s lead here. In many ways, the company has reshaped how the wider venture industry operates, but publicly aligning with nations that the US continues to distrust, for example, launching independent media properties. Or, it’s a much bigger bet than diving headlong into cryptocurrencies.
MBS may be on its way to a global resurgence, but US concerns are high as Saudi Arabia approaches China to develop a nuclear energy program that the US does not want. It has nothing to do with his MBS friendship with Vladimir Putin, whose war with Ukraine is believed to have already cost hundreds of thousands of lives, and the Yemeni humanitarian crisis it has caused. I didn’t say .
And no matter how successful the transformation of the region may be, we cannot forget that business is done differently in Saudi Arabia.
Last summer, according to the WSJ, after their fans drove two gaming companies to cancel their sponsorship deal with Neom over Saudi Arabia’s human rights record, its CEO called an emergency meeting to complain to his communications team. and asked why he had not been warned. position of the game company.
“If you don’t tell me who’s in charge, I’ll grab a gun from under the desk and shoot you.”
