Andreessen Horowitz to open London crypto office in first push overseas

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 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 corresponding to Revolut and Checkout.com, in addition to the lack of prime expertise corresponding to Monzo founder Tom Blomfield whereas the attraction of rival European capitals, corresponding 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 meant to spice up the native fintech neighborhood.

The agency’s determination 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 business bellwethers Binance and Coinbase, the largest names in a blitz of enforcement actions in opposition to large 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 belongings buying and selling intently consistent with requirements for securities corresponding 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 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 items, 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 large European markets, in contrast with the primary half of 2022, based on VC agency Atomico.

“London is a significant monetary hub, it’s a significant tech hub and albeit it’s a really engaging place for folks to dwell,” mentioned Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply have to get it to a crucial mass to actually get it going and we’re hoping that we will grow to be part of that and nudge [London] into being a extra energetic 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, dealing with allegations of fraud. Bankman-Fried has pleaded not responsible to all costs in opposition to him.

The business reset has stalled the sector’s progress and narrowed the choices for Andreessen because it seems to deploy billions of {dollars}. A brand new outpost in London may assist to mitigate that drawback.

Dixon contrasted the UK’s “considerate strategy” to regulating crypto with authorized uncertainty within the US that he mentioned made it “powerful 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 may ultimately changing into a world commonplace,” he mentioned.

Andreessen Horowitz’s first worldwide outpost will open this 12 months led by Sriram Krishnan, one of many agency’s basic companions, who lately served as an adviser to Elon Musk at Twitter following the billionaire’s takeover of the social media firm.