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 belongings 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 attraction 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 consists of operating a Crypto Startup Faculty accelerator programme early subsequent 12 months as a part of a broader set of initiatives supposed 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 towards trade bellwethers Binance and Coinbase, the largest names in a blitz of enforcement actions towards huge crypto firms this 12 months.
In distinction, the UK has set out its ambitions to draw crypto companies and is growing a regulatory framework that brings digital belongings buying and selling intently consistent with requirements for securities equivalent to shares and bonds.
Rishi Sunak, UK prime minister, mentioned in a press release that he was “thrilled” at Andreessen Horowitz’s arrival, which he mentioned was “testomony to our world-class universities and expertise and our robust aggressive enterprise surroundings”.
Andreessen Horowitz’s abroad enlargement is coming later than lots of its US friends however follows final week’s transfer by Silicon Valley rival Sequoia Capital to separate off its China and India items, retrenching internationally amid rising world 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 serious monetary hub, it’s a serious tech hub and albeit it’s a really enticing place for individuals to stay,” mentioned Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply have to get it to a crucial mass to essentially get it going and we’re hoping that we are able to turn into part of that and nudge [London] into being a extra lively hub of expertise.”
In Might final 12 months, Dixon’s unit unveiled a $4.5bn fund, the largest of its sort. Within the following months, a “crypto winter” obliterated the worth of tokens and crypto firms and Sam Bankman-Fried’s cryptocurrency alternate FTX collapsed, dealing with allegations of fraud. Bankman-Fried has pleaded not responsible to all expenses towards him.
The trade reset has stalled the sector’s progress and narrowed the choices for Andreessen because it appears to deploy billions of {dollars}. A brand new outpost in London might assist to mitigate that drawback.
Dixon contrasted the UK’s “considerate method” to regulating crypto with authorized uncertainty within the US that he mentioned made it “robust to be an entrepreneur” there, though the agency nonetheless plans to put money into American crypto firms. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that may ultimately changing into a worldwide normal,” he mentioned.
Andreessen Horowitz’s first worldwide outpost will open this 12 months led by Sriram Krishnan, one of many agency’s common companions, who not too long ago served as an adviser to Elon Musk at Twitter following the billionaire’s takeover of the social media firm.
