a16z (Andreessen Horowitz), one of the most important and impactful VCs in web3, has opted to open its first international office. Thanks to the UK’s emerging stance on web3 and crypto being positive, as well as clear UK regulations in the works, this first step outside of the US will be to London.
The SEC’s attack on Binance and Coinbase has severely unsettled the space. Although coin prices are all over the place, below the surface is a far wider array of reactions, from banks recoiling further away from all things crypto, to a worsening of general sentiment toward the stability of the fledgling industry. The destabilizing factor — which is especially true in the US — is regulations, or the lack thereof.
The difficulties of building a business in web3 — and I can see this with a small degree of firsthand experience — are as numerous as they are sudden. I have had three-hour KYC checks take six weeks because the word “Token” is in our name. When you’re a company of a16z’s size, these can range from irritating to devastating. a16z has an estimated $35 billion worth of assets under management, with the best part of $8 billion in crypto. In their case, a six-week blocker would be unconscionable.
The UK has been strangely absent for quite some time in crypto regulations. Like the US, it did not choose to move swiftly and pre-Rishi Sunak, the governmental sentiment seemed uncomfortable toward the crypto industry, albeit just from an outside perspective. Sunak becoming Prime Minister did alter that feeling as he is technology-centric, though comments on crypto were not all that common.
Great news that @a16z – one of the world’s leading tech investment firms, is opening a new base here in London.
Another huge vote of confidence in the UK as a place to build and grow tech businesses of the future. https://t.co/Ey1ykALkSU pic.twitter.com/caP6nNXfow
— Rishi Sunak (@RishiSunak) June 12, 2023
a16z’s decision to open its first international office in London, therefore, is significant for all involved. The official blog post announcement of the expansion to England was written by Chris Dixon, a general partner at Andreessen Horowitz and founder and leader of a16z crypto, the web3 wing of a16z. In it, the key takeaways appear to be that the UK is a web3-friendly place as the government aims to be a hub for web3 innovation and crypto. The UK’s PM had this to say on the announcement:
As we cement the UK’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.
That success is founded on having the right regulation and guardrails in place to protect consumers and foster innovation. While there’s still work to do, I’m determined to unlock opportunities for this technology and turn the UK into the world’s Web3 centre.
That’s why I am thrilled world-leading investor, Andreessen Horowitz, has decided to open their first international office in the UK – which is testament to our world-class universities and talent and our strong competitive business environment.
— Rishi Sunak, Prime Minister of the United Kingdom, via a16z Blog
While there is, of course, a lack of concrete regulatory information for the UK, what we can take solace in is that a16z would not make this decision lightly. Anyone in the space that is worth their salt is in favor of regulations for the space, but the success of web3 in any given country hinges on the quality of its regulations; these “guardrails” will either guide the sector to success or hamper its progress.
One final note is that a16z’s London office will bring with it the next Crypto Startup School in Spring 2024, one of the first of many benefits of the VC’s expansion to our little island.
