Andreessen Horowitz to open London crypto office in first push overseas

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 below 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 high 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 deal with crypto and blockchain start-ups, to which it has dedicated $7.6bn in capital globally, and consists of working a Crypto Startup College accelerator programme early subsequent yr as a part of a broader set of initiatives supposed to spice up the native fintech neighborhood.

The agency’s choice to open an workplace in London comes after a renewed clampdown on crypto in the US. The Securities and Change 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 massive crypto corporations this yr.

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 in keeping with requirements for securities equivalent to shares and bonds.

Rishi Sunak, UK prime minister, mentioned in an announcement that he was “thrilled” at Andreessen Horowitz’s arrival, which he mentioned was “testomony to our world-class universities and expertise and our sturdy aggressive enterprise surroundings”.

Andreessen Horowitz’s abroad growth 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 yr, the sharpest decline amongst massive European markets, in contrast with the primary half of 2022, in line 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 folks to reside,” 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 are able to turn out to be part of that and nudge [London] into being a extra lively hub of know-how.”

In Could final yr, 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 corporations and Sam Bankman-Fried’s cryptocurrency alternate FTX collapsed, dealing with allegations of fraud. Bankman-Fried has pleaded not responsible to all expenses in opposition to 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 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 put money into American crypto corporations. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that may ultimately changing into a world customary,” he mentioned.

Andreessen Horowitz’s first worldwide outpost will open this yr led by Sriram Krishnan, one of many agency’s basic 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.