For more than a decade, the venture capital firm Andreessen Horowitz has helped propel startups such as Twitter and Coinbase to massive heights from its headquarters in Menlo Park, California.
On Sunday, the company announced its first non-U.S. office, a branch of its a16z crypto fund in London. The move comes amid an increasingly hostile environment toward crypto in the U.S., including a lawsuit on Tuesday by the Securities and Exchange Committee against its one-time portfolio company, Coinbase.
“What’s going on now with the Biden administration is they’re basically just trying to kill off the technology,” Chris Dixon, the influential general partner at a16z and the leader of its crypto fund, told Fortune in an interview.
The firm's decision demonstrates the firm’s confidence in the U.K. as an emerging crypto powerhouse as lawmakers, led by Prime Minister Rishi Sunak, seek to regulate the industry.
“It just has all the ingredients that you want to see for an emerging tech hub,” Dixon said.
The office, scheduled to open later this year, will be led by Sriram Krishnan, a general partner at a16z. As part of the move, the venture firm announced a $43 million investment in the U.K.-based Gensyn, a crypto-meets-A.I. startup. Dixon described the project as the “Airbnb for GPUs,” creating a blockchain-based marketplace for companies looking for computing power. Previously, a16z has invested in other U.K.-based crypto companies, including Arweave, Aztec, and Improbable.
The firm also plans to work with universities to develop blockchain clubs and foster talent for the crypto space, including with its Crypto Startup School accelerator program, which is aimed at supporting entrepreneurs building Web3 startups. The most recent iteration had around 8,000 applicants and 26 companies, which received investment and mentorship from a16z.
More crucially, a16z crypto is looking at the U.K. as a potential safe harbor and global leader for crypto as prospects dwindle in the U.S., at least for now. Sunak was an advocate of crypto and blockchain as finance minister, and other lawmakers such as MP Lisa Cameron are pushing for digital asset regulation.
Brian Quintenz, the head of policy at a16z crypto and a former commissioner at the U.S. Commodity Futures Trading Commission, said the U.K. is considering a regulatory regime that resembles a draft bill released by the Republican chairs of the House Financial Services and Agriculture committees about a week ago.
“We’re thinking of this as an investment in the U.K. with the appropriate regulatory treatment that ensures a high bar of customer protection—but that embraces decentralization,” Quintenz told Fortune in an interview.
The U.K. is still grappling with how to approach regulation—in mid-May, the parliament’s Treasury committee advised that cryptocurrency trading should be treated as a form of gambling rather than as a financial service—and Quintenz said a16z crypto hopes to guide discussions, including working closely with 10 Downing Street.
“As we cement the U.K.’s place as a science and tech superpower, we must embrace new innovations like Web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy,” Sunak said in a statement shared with Fortune. “That’s why I am thrilled world-leading investor Andreessen Horowitz has decided to open their first international office in the U.K.”
Despite the expansion, Dixon said a16z remains a U.S. firm. He expressed optimism that lawmakers would change their minds on the need for crypto regulation, as they did with early internet legislation, citing that commerce was illegal on the internet until Congress passed a series of bills in the 1990s.
“I would say the [crypto] industry will continue,” he said. “I think the U.S. will eventually get it right.”
