Quantopian Raises $25 Million; Andreessen Horowitz Leads Round

Venture capital investor Andreessen Horowitz is reportedly the lead investor in a fundraising round for Quantopian, a startup that crowdsources investment algorithms.

According to a report, other venture capitalists to take part in the $25 million round of Series C funding include Bessemer Venture Partners, Steve Cohen’s Point72 Ventures, Khosla Ventures and Spark Capital. With the latest capital raise, Quantopian has raised close to $50 million altogether.

Quantopian, which is a free platform, claims to have 100,000 members from 180 countries. All of them bid to develop investment algorithms that are of institutional investment quality. The members, which Quantopian said in the report include professors, research scientists and developers, have written more than 400,000 investment algorithms. In July, Steve Cohen announced a $250 million new venture fund that will include Quantopian algorithms to manage the funds, some of which have to hit performance metrics. The algorithm authors get a royalty based on how well their strategy pans out.

“Quantopian has a chance to really disrupt this industry by bringing a distributed contributor approach to finance — harnessing technology to educate and empower the greatest minds around the world,” said Alex Rampell, general partner with Andreessen Horowitz, who joined the Quantopian board, in the report.

In September, Andreessen Horowitz provided a rare glimpse of venture capital performance, releasing some documents that give the public insight into how its investments have been performing. There is much to be admired — Andreessen’s first three venture funds have nearly doubled their investment capital since founding. Good, but not great, according to a Wall Street Journal analysis of the data. Apparently, by the numbers, they have not quite achieved elite status just yet. Sequoia (a firm whose founding is roughly contemporaneous with Andreessen’s, for example) has seen its 2003 and 2006 funds rise eightfold net of fees — from a successful run of investments in LinkedIn, YouTube, Airbnb and Dropbox. Its 2010 fund is up 5.5 times — mostly based on the very successful exit of WhatsApp. Benchmark, to take another example, has multiplied investors’ money 11 times net of fees in its 2011 fund. Andreessen, since founding, had returns of $1.2 billion in cash to investors, net of fees, meaning that Sequoia did better on its WhatsApp investment alone.