Andreessen Horowitz has chosen London for its first workplace outdoors 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 underneath 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 comparable to Revolut and Checkout.com, in addition to the lack of prime expertise comparable to Monzo founder Tom Blomfield whereas the enchantment of rival European capitals, comparable to Paris, has grown.
Andreessen Horowitz’s London workplace will deal with crypto and blockchain start-ups, to which it has dedicated $7.6bn in capital globally, and contains working a Crypto Startup Faculty 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 resolution 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 corporations 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 property buying and selling carefully according to requirements for securities comparable 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 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 models, retrenching internationally amid rising world tensions.
The agency selected London over different potential places 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 engaging place for individuals to dwell,” stated Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply have to get it to a important mass to essentially get it going and we’re hoping that we will grow to be 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 corporations and Sam Bankman-Fried’s cryptocurrency alternate FTX collapsed, going through allegations of fraud. Bankman-Fried has pleaded not responsible to all expenses 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 might assist to mitigate that downside.
Dixon contrasted the UK’s “considerate strategy” to regulating crypto with authorized uncertainty within the US that he stated made it “powerful to be an entrepreneur” there, though the agency nonetheless plans to put money into American crypto corporations. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that may finally changing 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 common companions, who lately served as an adviser to Elon Musk at Twitter following the billionaire’s takeover of the social media firm.
