Andreessen Horowitz has chosen London for his first office outside the US, betting the UK government will create a more hospitable climate for blockchain start-ups amid a crypto crackdown by the US financial regulator.
The Silicon Valley venture capital firm – which manages around $35 billion in assets and was an early backer of Facebook, Twitter, Coinbase and Stripe – is expanding into the UK at a when London's status as a fintech hub was shaken. There has been a dearth of public listings, struggles in flagship start-ups such as Revolut and Checkout.com, as well as the loss of top talent such as Monzo founder Tom Blomfield, while the lure of capitals rival European countries, such as Paris, grew.
Andreessen Horowitz's London office will focus on crypto and blockchain start-ups, to which he has committed $7.6 billion in capital globally, and includes running a Crypto Startup School accelerator program early next year as part of a broader set of initiatives aimed at boosting the local fintech community.
The company's decision to open an office in London comes after another crypto crackdown in the United States. The Securities and Exchange Commission, the financial regulator, last week filed lawsuits against industry leaders Binance and Coinbase, the biggest names in a series of enforcement actions against major crypto firms this year.
In contrast, the UK has set out its ambitions to attract crypto businesses and is developing a regulatory framework that brings digital asset trading closer to the standards for securities such as stocks and bonds.
Rishi Sunak, Britain's Prime Minister, said in a statement that he was "delighted" with the arrival of Andreessen Horowitz, which he said was "a testament to our world-class universities and talent and our strong competitive business environment".
Andreessen Horowitz's overseas expansion comes later than many of its U.S. peers, but follows Silicon Valley rival Sequoia Capital's decision last week to split its China units and in India, entrenching itself internationally amid rising global tensions.
The company chose London over other potential locations, including Singapore and Dubai, which have sought to attract crypto talent, even as the UK has suffered a 57% drop in tech investment this year, the most sharp decline among the major European markets, compared to the first half. of 2022, according to venture capital firm Atomico.
“London is a major financial hub, it's a major technology hub and frankly it's a very attractive place for people to be,” said Chris Dixon, who heads crypto investments at Andreessen Horowitz. "You just need to reach a critical mass to really get going and hopefully we can be part of that and give a boost [London] become a more active technology hub.
In May last year, Dixon's unit unveiled a $4.5 billion fund, the largest of its kind. Over the next few months, a "crypto winter" wiped out the value of crypto tokens and companies and Sam Bankman-Fried's FTX cryptocurrency exchange collapsed, facing allegations of fraud. Bankman-Fried has pleaded not guilty to all charges against him.
The industry reset has stalled sector growth and narrowed Andreessen's options as it seeks to roll out billions of dollars. A new outpost in London could help alleviate this problem.
Dixon pitted the UK's "thoughtful approach" to regulating crypto against legal uncertainty in the US which he said made it "difficult to be an entrepreneur" there, although the company is still considering to invest in US crypto companies. "Our assessment is that the UK is ahead of the curve and instituting [crypto] policies that will eventually become a global standard,” he said.
Andreessen Horowitz's first international outpost will open this year under Sriram Krishnan, one of the company's general partners, who recently served as an adviser to Elon Musk on Twitter after the billionaire took over the company. of social media.