Justice Department Launches Probe into Andreessen Horowitz Over Board Seats on Competing Companies

The Justice Department has launched a probe into Andreessen Horowitz regarding the firm’s partners serving on the boards of competing companies, Bloomberg reported.

The nearly year-long investigation focuses specifically on the firm’s board seats at Databricks, which is valued at $190 billion, and Fivetran, which combined with dbt Labs in June. The firm’s co-founder, Ben Horowitz, serves on the board of Databricks, while partner Martin Casado serves on the board of Fivetran.

Several VCs told TechCrunch they were surprised that Databricks and Fivetran are competitors now, but the two companies weren’t rivals when a16z invested in the startups, according to another Databricks investor who spoke on condition of anonymity. Databricks is largely known for its cloud storage products but has expanded into AI data pipelines and application connectors. That’s Fivetran’s main business.

Given that Andreessen Horowitz has backed hundreds of companies, it’s almost inevitable that some startups will pivot or expand into the same markets, becoming competitors. While backing direct rivals has become more acceptable recently, conflicts can be resolved through measures such as a so-called Chinese wall between partners, which would prevent them from sharing confidential information about the two companies with each other.

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The investigation invokes Section 8 of the Clayton Act, a 112-year-old law stating that an individual or entity is barred from serving on the boards of competing companies. If a16z is forced to surrender a seat, founders may place less value on board commitments from top-tier VCs, given that those investors might be forced to step down if a portfolio overlap creates a future conflict.

Andreessen Horowitz did not immediately respond to our request for comment, nor did it respond to Bloomberg. Databricks and DOJ declined comment. When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Marina Temkin is a venture capital and startups reporter at TechCrunch. Prior to joining TechCrunch, she wrote about VC for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned a CFA charterholder designation. You can contact or verify outreach from Marina temkin@techcrunch.com or via encrypted message at +1 347-683-3909 on Signal.