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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 property 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 reminiscent of Revolut and Checkout.com, in addition to the lack of high expertise reminiscent of Monzo founder Tom Blomfield whereas the enchantment of rival European capitals, reminiscent of 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 contains working a Crypto Startup Faculty 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 determination 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 towards trade bellwethers Binance and Coinbase, the largest names in a blitz of enforcement actions towards large crypto firms this yr.
In distinction, the UK has set out its ambitions to draw crypto companies and is growing a regulatory framework that brings digital property buying and selling intently in keeping with requirements for securities reminiscent of 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 sturdy 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 models, 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 yr, the sharpest decline amongst large European markets, in contrast with the primary half of 2022, in line with VC agency Atomico.
“London is a serious monetary hub, it’s a serious tech hub and admittedly it’s a really engaging place for folks to reside,” mentioned Chris Dixon, who leads Andreessen Horowitz’s crypto investments. “You simply must get it to a essential mass to essentially get it going and we’re hoping that we are able to change into 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 sort. Within the following months, a “crypto winter” obliterated the worth of tokens and crypto firms and Sam Bankman-Fried’s cryptocurrency alternate FTX collapsed, dealing with allegations of fraud. Bankman-Fried has pleaded not responsible to all fees towards him.
The trade 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 put money into American crypto firms. “Our evaluation is the UK is forward of the curve and instituting [crypto] insurance policies that can finally 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.
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