a16z Picks UK for first international expansion
Andreessen Horowitz (a16z), the venture capital behemoth known for its role in the rise of Web3 platforms such as Dapper Labs, Foundation and more, has announced plans to establish its first international outpost in London.
The strategic move comes amid an escalating climate of regulatory scrutiny against crypto exchanges in the US, highlighted by a recent lawsuit filed against Coinbase, a former Andreessen Horowitz portfolio company, by the US Securities and Exchange Committee (SEC).
Responding to the US crypto climate
After over a decade of shaping Silicon Valley’s tech landscape from its Menlo Park base, the firm is now expanding its reach beyond US shores. Chris Dixon, a prominent general partner at a16z and the head of its crypto arm, voiced his concerns about the current US administration’s approach to the technology in the announcement.
“We are thrilled to open our first international office in a jurisdiction that welcomes blockchain technology and is committed to creating a predictable business environment by following regulations that both embrace web3 and protect consumers,” Dixon said.
Big news to share: @a16z expanding to UK 🇬🇧
We plan to open our first international office in London later this year, and will host the next Crypto Startup School there in 2024.
Why Great Britain? 👇https://t.co/PQ7GuNEn77
— cdixon.eth (@cdixon) 11 June 2023
The decision to expand to the UK underscores Andreessen Horowitz’s view that the country is becoming a formidable player in the crypto arena. This confidence is bolstered by the UK Government’s proactive approach to regulating the industry, led by Prime Minister Rishi Sunak.
“As we cement Britain’s place as a science and technology superpower, we need to embrace new innovations like Web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy,” Sunak said.
“This success is based on having the right regulation and safeguards in place to protect consumers and drive innovation. While there is still work to be done, I am determined to unlock the potential of this technology and make the UK the world’s Web3 hub .”
Dixon hailed the UK’s potential as a budding technology hub, citing the country’s favorable conditions for the growth of new technologies. The London office, due to open later this year, will be led by Sriram Krishnan, a general partner at a16z.
Andreessen Horowitz also intends to partner with academic institutions to cultivate blockchain clubs and nurture talent for the UK crypto industry. This includes the Crypto Startup School accelerator program, which it will host in the country in spring 2024. The last iteration of the program attracted approximately 8,000 applicants, with 26 companies receiving investment and mentorship from a16z.
However, Dixon emphasized a tweet from June 11 that a16z remained a US-based company committed to seeing the crypto industry in the country grow.
What will be next
Coinciding with the announcement of the new office, Andreessen Horowitz unveiled a $43 million investment in Gensyn, a UK-based startup merging crypto and artificial intelligence. The firm has a history of investing in UK-based crypto companies, including Arweave, Aztec and Improbable.
While a16z’s expansion is encouraging news for the international crypto industry, the UK is still navigating the complexities of crypto regulation. Parliament’s finance committee proposed in mid-May that cryptocurrency trading should be classified as gambling rather than a financial service.
Yet Prime Minister Sunak has been a vocal supporter of crypto and blockchain during his tenure as Chancellor of the Exchequer, while other lawmakers, such as MP Lisa Cameron, continue to advocate for digital asset regulation that optimizes for industry growth while protecting consumers.
a16z’s announcement comes shortly after Crypto.com revealed it would be closing the US arm of its institutional exchange services. While many industry experts expect the regulatory climate in the US to turn around, for now it appears that companies are looking elsewhere.