BuzzFeed

Today, I’m excited to announce that Andreessen Horowitz is investing $50 million in BuzzFeed. As part of the investment, I’ll be joining the company’s board.

Many of today’s great media companies were built on top of emerging technologies. Examples include Time Inc. which was built on color printing, CBS which was built on radio, and Viacom which was built on cable TV. We’re presently in the midst of a major technological shift in which, increasingly, news and entertainment are being distributed on social networks and consumed on mobile devices. We believe BuzzFeed will emerge from this period as a preeminent media company.

BuzzFeed started out focusing on lightweight content like memes, lists, funny photos, etc. This led some industry observers to dismiss Buzzfeed as a “toy”. The company has since moved steadily up market, following the typical path of disruptive technologies. It now has an editorial staff of over 200 people covering a wide range of topics – politics, sports, business, entertainment, travel, etc – and plans to invest significantly more in high-quality content in the coming years.

We see BuzzFeed as a prime example of what we call a “full stack startup”. BuzzFeed is a media company in the same sense that Tesla is a car company, Uber is a taxi company, or Netflix is a streaming movie company. We believe we’re in the “deployment” phase of the internet. The foundation has been laid. Tech is now spreading through every industry and every part of the world. The most interesting tech companies aren’t trying to sell software to other companies. They are trying to reshape industries from top to bottom.

BuzzFeed has technology at its core. Its 100+ person tech team has created world-class systems for analytics, advertising, and content management. Engineers are 1st class citizens. Everything is built for mobile devices from the outset. Internet native formats like lists, tweets, pins, animated GIFs, etc. are treated as equals to older formats like photos, videos, and long form essays. BuzzFeed takes the internet and computer science seriously.

As a small, early investor in BuzzFeed, I got to observe firsthand how effectively Jonah and the team executed in recent years. The results speak for themselves: BuzzFeed now reaches over 150M people per month, is consistently profitable, and will generate triple digit millions in revenues this year. I believe the future of BuzzFeed – and the media industry more generally – will only get brighter as the number of people with internet-connected smartphones grows, and the internet solidifies its place as the central communication medium of our time.

 

Coinbase

One of the interesting things about Bitcoin is the contrast between how it is portrayed in the press and how it is understood by technologists. The press tends to portray Bitcoin as either a speculative bubble or a scheme for supporting criminal activity. In Silicon Valley, by contrast, Bitcoin is generally viewed as a profound technological breakthrough.

The Internet is based on a set of core protocols that specify how information such as text, photos, and code should be transmitted. The designers of the Web built placeholders for a system that moved money, but never successfully completed it. Bitcoin is the first plausible proposal for an economic protocol for the Internet.

This matters for two reasons:

1) It fixes serious problems with existing payment systems that depend on centralized services to verify the validity of transactions. These services are both expensive (roughly a 2.5% tax on all transactions) and prone to failure (Internet payment fraud is rampant).

2) More importantly, Bitcoin is a platform upon which new technologies can be developed. Developers have created some early applications, and speculated about future applications. Some potential applications include: a) micropayments as a replacement for banner ads or subscription fees, b) machine-to-machine payments to reduce spam and denial-of-service attacks, c) a way to offer low-cost financial services to people who, because of financial or political constraints, don’t have them today.

But to proliferate widely, Bitcoin needs a killer app the same way HTTP had web browsers and SMTP had email clients. That’s why today I’m excited to announce that Andreessen Horowitz is leading a $25M financing of Coinbase, a service that provides an accessible interface to the Bitcoin protocol. Consumers can use Coinbase to convert to and from other currencies and to pay for goods and services. Merchants can use Coinbase to accept payments and convert currencies. Developers can build new services using Coinbase’s API.

Coinbase has grown extremely fast and is now the most widely used Bitcoin service in the US. The founders of Coinbase, Brian Armstrong and Fred Ehrsam, have worked closely with banks and regulators to ensure that the service is safe and compliant. We think Coinbase can significantly accelerate Bitcoin’s proliferation, and as that happens the Internet will enter a new phase of invention and opportunity.

FiftyThree

Steve Jobs predicted that tablet computers would become so dominant that “PCs would become like trucks” – special-purpose industrial devices. Skeptics replied that tablets were only useful for consumption and not creation and therefore couldn’t replace PCs, to which Jobs said:

We are just scratching the surface on the kinds of apps for the iPad…I think there are lots of kinds of content that can be created on the iPad. When I am going to write that 35-page analyst report, I am going to want my Bluetooth keyboard. That’s 1 percent of the time. The software will get more powerful. I think your vision would have to be pretty short to think these can’t grow into machines that can do more things, like editing video, graphic arts, productivity. You can imagine all of these content creation possibilities on these kind of things. Time takes care of lots of these things.

History supports Jobs’ argument. In the past, new user interfaces led to new categories of creation applications. Back in the 70s and 80s, when computers had text-based interfaces, word processors and spreadsheets were invented. In the 80s and 90s, when computers had graphical interfaces, presentation and image editors proliferated. Jobs was simply predicting that historical patterns would repeat.

Today we are announcing that Andreessen Horowitz is leading a $15M Series A investment in FiftyThree, a company whose goal is to build the essential suite of mobile tools for creativity. You might know FiftyThree as the company behind the iPad app Paper. Paper has been embraced by millions of everyday creators, and has won dozens of awards (including Apple’s App of the Year). It is also one of the top grossing iPad productivity apps ever. But this is only the beginning of FiftyThree’s ambitious plans.

The FiftyThree team spent their careers working on breakthrough computing projects, including lead roles on Office, Kinect, Sonos, and the Xbox. Particularly relevant was a project they led at Microsoft called Courier that has been widely praised as a visionary take on tablet computing (unfortunately, Courier was never brought to market).

FiftyThree didn’t need to raise money, but decided that the opportunity was so large that it made sense to accelerate their efforts with additional capital and resources. They’ll be expanding their engineering teams in New York and Seattle, and will broaden their offerings across software, services, and hardware.

I first met the founders in New York in 2011, and have since spent a lot of time with them. I’m convinced that they are one of the most innovative design and engineering teams in the world. In the past, they reimagined how we play games, view images, listen to music, create documents, and more. With FiftyThree, they are rethinking the very way we create and collaborate on ideas. I couldn’t be more excited to be involved.

Airware: An operating system for drones

I’m excited to announce that Andreessen Horowitz, along with Google Ventures, is investing $10.7M in Airware, a startup that makes operating systems for flying robots, popularly known as drones.

Drones were first developed by the military. But as component prices drop and software becomes more sophisticated, drones are starting to be used in non-military applications.

One application is precision farming, which aims to decrease costs, increase yields, and reduce the environmental impact of farming. Farming accounts for about 70% of global water usage. Most experts think this is unsustainable. Using drones, farmers can inexpensively survey crops to better allocate water and fertilizer. Studies show this can raise food yields over 25% while decreasing water usage by 40%.

Other large markets are mapping, infrastructure inspection (e.g. pipelines and power lines), and civil applications (police, firefighters, and first responders). We expect many other uses to emerge over time. One of Airware’s early customers is a Kenyan wildlife conservancy that’s buying drones to prevent Rhino poaching.

Airware makes operating systems for low-cost, non-military drones. It’s a combination of hardware and software that’s designed to be customized by customers and third-party developers. Other companies make the actual drone body (the “airframe”), which can come in many forms such as helicopters, quadcopters, and fixed-wing airplanes.

The founder of Airware, Jonathan Downey, spent most of his life studying aviation and engineering. Like his parents and grandfather, he is a licensed, instrument-rated pilot. He studied computer science and electrical engineering at MIT, where he represented the university in drone-building competitions. He then built drones at Boeing, but left when he realized he could make low-cost drones on his own.

As investors, we try to back brilliant founders pursuing audacious ideas. Robotics has long been a field that overpromised and underdelivered. We think drones are the most likely way to rectify that, and Jonathan is the person to make it happen.

Shapeways: Manufacturing in the Cloud

The Internet dramatically reduced the costs of a number of creative activities. For example, publishing written work used to require a large upfront investment. As a result, publishing was controlled by corporations who acted as creative arbiters. The Internet enabled writers to bypass those corporations, leading to an explosion of creativity and innovation.

Creative activities that involve physical things have mostly resisted this trend. Let’s say you are an entrepreneur who has designed a new line of jewelry. You need to find a factory, commit to a large batch size, and make a significant upfront investment. It is a risky and expensive endeavor.

Shapeways is a startup headquartered in NYC that eliminates the fixed costs of manufacturing. Making use of breakthrough advances in 3D printing, Shapeways manufactures objects in a variety of materials – including metals, ceramics, and plastics – with no upfront costs or minimum batch size. The results are indistinguishable from – and sometimes superior to – objects manufactured using traditional techniques.

Here’s a short video that shows the revolutionary potential of 3D printing:

Today, I’m excited to announce that Andreessen Horowitz is leading a $30M investment in Shapeways along with our friends at Union Square Ventures, Index Ventures, and Lux Capital. We believe that technology is at its best when it enables human creativity. The Internet unlocked the world of bits. 3D printing is unlocking the world of atoms.