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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 beneath 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 akin to Revolut and Checkout.com, in addition to the lack of high expertise akin to Monzo founder Tom Blomfield whereas the enchantment of rival European capitals, akin to Paris, has grown.
Andreessen Horowitz’s London workplace will concentrate on crypto and blockchain start-ups, to which it has dedicated $7.6bn in capital globally, and consists of operating a Crypto Startup College accelerator programme early subsequent yr as a part of a broader set of initiatives meant to spice up the native fintech neighborhood.
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 business 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 growing a regulatory framework that brings digital belongings buying and selling intently in keeping with requirements for securities akin 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 lots 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 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 accordance with VC agency Atomico.
“London is a serious monetary hub, it’s a serious tech hub and albeit it’s a really enticing place for folks to dwell,” mentioned Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply must get it to a crucial mass to actually get it going and we’re hoping that we will develop into part of that and nudge [London] into being a extra lively hub of expertise.”
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 trade FTX collapsed, going through allegations of fraud. Bankman-Fried has pleaded not responsible to all expenses in opposition to him.
The business reset has stalled the sector’s progress and narrowed the choices for Andreessen because it appears to be like 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 mentioned made it “robust to be an entrepreneur” there, though the agency nonetheless plans to spend money on American crypto corporations. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that may finally turning into a worldwide customary,” he mentioned.
Andreessen Horowitz’s first worldwide outpost will open this yr led by Sriram Krishnan, one of many agency’s common companions, who just lately served as an adviser to Elon Musk at Twitter following the billionaire’s takeover of the social media firm.
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