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Why Andreessen Horowitz Wrote GitHub’s First Big Check Back in 2012

June 4, 2018, 3:22 PM UTC

Microsoft has agreed to acquire GitHub for $7.5 billion in stock. GitHub is the code-repository company popular with many software developers. Microsoft is the top contributor to the site, and has more than 1,000 employees actively pushing code to repositories on GitHub. GitHub was last valued at $2 billion in 2015, and it had raised approximately $350 million from investors including Sequoia Capital, Andreessen Horowitz, Thrive Capital, IVP, and SV Angel.

Andreessen Horowitz poured $100 million in the startup back in 2012, making it the largest single check the firm had ever written in a Series A round. At the time, people criticized the firm for overpaying. “When you write the largest check the firm’s ever written on a Series A deal, there will always be questions on whether this is a good deal,” partner Peter Levine told Fortune Monday morning.

He said the investment stemmed from the firm’s theory that developers would drive the new economy, and “GitHub was at the epicenter of that transformation.”

GitHub will reportedly continue to operate as an independent entity within Microsoft. “This whole developer ecosystem is just starting out,” Levine said. “It’s a brilliant move by [Microsoft CEO] Satya Nadella. By integrating GitHub and Microsoft, they extend their open source leadership, and I hope they continue the momentum GitHub’s had so far.”

Levine further elaborated on the firm’s blog, saying that the acquisition will allow Microsoft to build the “future of software development.” He added: “GitHub brings the largest software code base in the world … to Microsoft’s Azure cloud platform while also staying open to all other clouds. The focus on the developer doesn’t change and there is a commitment to remaining an open platform.”

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.