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Andreessen Horowitz backs crypto startups by opening London office

By Nithya Bose in UK Business News, posted June 12, 2023

Andreessen Horowitz is venturing into the London market to support cryptocurrency startups as US scrutiny intensifies.

The venture capital firm, known for its investments in Skype and Coinbase, plans to open its first international office in London in the coming months.

The move is a divergence from the broader trend of retrenchment in the volatile crypto sector.

Chris Dixon, the crypto general partner at Andreessen, cited the more favorable regulatory landscape in the UK as a key factor in the decision.

The firm has faced heightened regulatory investigations from agencies like the SEC in the US, leading to a desire for clearer regulations.

Dixon said: “In the UK, I think it will happen faster because there’s more political will.”

As part of the expansion, Sriram Krishnan, one of the firm's general partners, will be relocated to the London office, with plans to move more employees in the future.

The firm also intends to host its crypto startup school, a training program for young crypto founders, in London next year.

Andreessen Horowitz has been a pioneer in crypto investing in Silicon Valley, led by early bitcoin advocate Chris Dixon, who launched the firm's first crypto fund in 2018.

Despite the recent decline in crypto investments and markdowns on startup equity, the firm raised a record-breaking $4.5 billion for its fourth crypto fund last year.

The shrinking crypto market has raised concerns among some investors about the size and returns potential of Andreessen's newer crypto funds.

But Dixon reassured the firm recently made four new crypto investments and continues to see a robust pipeline of entrepreneurs.

In the US, Andreessen Horowitz has long advocated for clearer regulations for the crypto industry, particularly regarding the classification of digital tokens issued by crypto startups.

However, several of the firm's portfolio companies have been scrutinized by the SEC in recent years, underscoring the growing risks associated with investing in the sector.

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Last week, the SEC filed a lawsuit against Coinbase, a major crypto exchange and one of Andreessen's investments, alleging violations of registration rules.

Coinbase, in turn, accused the SEC of enforcing ambiguous rules without providing clear guidance. Marc Andreessen, one of the firm's co-founders, sits on Coinbase's board.

Despite the challenges, Andreessen Horowitz remains committed to the crypto sector, making new investments and expressing confidence in the industry's future.

The firm also announced its leadership in a $43 million investment in Gensyn, a London-based startup operating a blockchain-based chip marketplace.

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