Andreessen Horowitz has chosen London for its first workplace exterior the US, betting that the UK authorities will create a extra hospitable local weather for blockchain start-ups amid a crypto crackdown by the American monetary regulator.
The Silicon Valley enterprise capital agency — which has about $35bn in property beneath administration and was an early backer of Fb, Twitter, Coinbase and Stripe — is increasing to the UK at a time when London’s standing as a fintech centre has been shaken. There was a dearth of public listings, struggles at flagship start-ups equivalent to Revolut and Checkout.com, in addition to the lack of prime expertise equivalent to Monzo founder Tom Blomfield whereas the enchantment of rival European capitals, equivalent to Paris, has grown.
Andreessen Horowitz’s London workplace will give attention to crypto and blockchain start-ups, to which it has dedicated $7.6bn in capital globally, and contains operating a Crypto Startup College accelerator programme early subsequent 12 months as a part of a broader set of initiatives meant to spice up the native fintech group.
The agency’s choice to open an workplace in London comes after a renewed clampdown on crypto in the US. The Securities and Trade Fee, the monetary regulator, final week filed lawsuits in opposition to trade bellwethers Binance and Coinbase, the largest names in a blitz of enforcement actions in opposition to huge crypto firms this 12 months.
In distinction, the UK has set out its ambitions to draw crypto companies and is creating a regulatory framework that brings digital property buying and selling carefully consistent with requirements for securities equivalent to shares and bonds.
Rishi Sunak, UK prime minister, stated in a press release that he was “thrilled” at Andreessen Horowitz’s arrival, which he stated was “testomony to our world-class universities and expertise and our sturdy aggressive enterprise atmosphere”.
Andreessen Horowitz’s abroad growth is coming later than a lot of its US friends however follows final week’s transfer by Silicon Valley rival Sequoia Capital to separate off its China and India models, retrenching internationally amid rising international tensions.
The agency selected London over different potential areas together with Singapore and Dubai which have sought to lure crypto expertise, even because the UK has suffered a 57 per cent drop in tech funding this 12 months, the sharpest decline amongst huge European markets, in contrast with the primary half of 2022, in keeping with VC agency Atomico.
“London is a significant monetary hub, it’s a significant tech hub and albeit it’s a really enticing place for individuals to reside,” stated Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply have to get it to a vital mass to essentially get it going and we’re hoping that we will turn into part of that and nudge [London] into being a extra lively hub of expertise.”
In Could final 12 months, Dixon’s unit unveiled a $4.5bn fund, the largest of its variety. Within the following months, a “crypto winter” obliterated the worth of tokens and crypto firms and Sam Bankman-Fried’s cryptocurrency change FTX collapsed, going through allegations of fraud. Bankman-Fried has pleaded not responsible to all prices in opposition to him.
The trade reset has stalled the sector’s development and narrowed the choices for Andreessen because it appears to deploy billions of {dollars}. A brand new outpost in London may assist to mitigate that drawback.
Dixon contrasted the UK’s “considerate method” to regulating crypto with authorized uncertainty within the US that he stated made it “robust to be an entrepreneur” there, though the agency nonetheless plans to spend money on American crypto firms. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that can finally turning into a worldwide commonplace,” he stated.
Andreessen Horowitz’s first worldwide outpost will open this 12 months led by Sriram Krishnan, one of many agency’s basic companions, who just lately served as an adviser to Elon Musk at Twitter following the billionaire’s takeover of the social media firm.
