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US VC giant Andreessen Horowitz — which has about $35bn in assets under management — is to open its first (yes, the first) international office in London, led by one of the firm’s general partners, Sriram Krishnan. The office will focus on supporting the development of Crypto, blockchain technologies and associated Web3 startups. a16z has committed $7.6bn to Crypto startups globally.
Chris Dixon, who leads a16z’s crypto investments, said: “London is a major financial hub, it’s a major tech hub and frankly it’s a very attractive place for people to live. You just need to get it to a critical mass to really get it going and we’re hoping that we can become a part of that and nudge [London] into being a more active hub of technology.”
His comments may come as a slight surprise to the numerous VCs and unicorns that have exploded from the city in the last 15 or so years. That said, he said the decision came after a “productive dialogue” with the U.K. prime minister, HM Treasury, U.K. policymakers, and the Financial Conduct Authority.
The move comes at a time when the SEC has been cracking down on the crypto industry, suing cryptocurrency exchanges Coinbase and Binance for allegedly breaching its rules. London’s long history in the finance world, large FinTech centre and softer regulatory approach to Crypto has almost certainly played into a16z’s thinking on this strategic move.
Dixon said the UK’s “thoughtful approach” to crypto contrasted with the legal uncertainty in the US, although the firm re-affirmed its commitments to US crypto companies. “Our assessment is the UK is ahead of the curve and instituting [crypto] policies that will eventually becoming a global standard,” he added.
The UK government has already made noises about create a more hospitable climate for Web3 compared to the US, keen as it is to re-establish London as a fintech centre after the loss of so much EU-based finance business.
London has lost public listings, blocked mergers, and been criticised by exiting entrepreneurs such as Monzo founder Tom Blomfield, while the appeal of rival European capitals, such as Paris, has grown. According to VC firm Atomico, the UK has also suffered a 57 per cent drop in tech investment this year, the sharpest decline among big European markets, compared with the first half of 2022.
However, the UK appears to be on a mission to attract crypto businesses, developing a regulatory framework for digital assets trading that falls closer to standards for securities such as stocks and bonds than in the US.
Rishi Sunak, UK prime minister, said in a statement that he was “thrilled” at Andreessen Horowitz’s arrival, which he said was “testament to our world-class universities and talent and our strong competitive business environment”. Sunak added that a16z’s expansion was down to having the “right regulation and guardrails” to “foster innovation.”
Andreessen Horowitz is however, quite late to the European party, coming over a year after Sequoia set up its London office, among other US firms.
In addition to the new office, a16z has also announced its plan to launch a new “Crypto Startup School” (CSS) program in London in the spring (March to June) of 2024.
In a speech to open London Tech Week, Sunak also added that he wanted the UK to be the “geographical home of global AI safety regulation.” He plans to establish a global AI watchdog in London.
Separately, Gensyn, a provider of blockchain-based computing resources for AI secured a $43 million, Series A funding round, led by a16z.
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