In a bold move, a16z announced its inaugural U.K. investment following the recent opening of its overseas office in London last Thursday.
The prominent venture capital firm has taken the lead in a $4.2 million seed round for Pimlico, a London-based startup dedicated to building developer-friendly infrastructure for decentralized applications, or dApps, as hinted by its name inspired by the city’s charming area.
Expressing confidence in Pimlico’s potential, Sriram Krishnan, a general partner at a16z focusing on crypto, highlighted the startup’s impressive progress after participating in the Crypto Startup School in Los Angeles. In a recent blog post, Krishnan noted, “With Pimlico just a few weeks old, we were blown away by the velocity at which Kristof and the team shipped product and closed significant, early partnerships for Pimlico.”
While a16z maintains its global investment strategy, the London-based team at Pimlico will concentrate on supporting U.K. founders and startups, according to insights shared with TechCrunch by the investor. Kristof Gazso, the founder and CEO of Pimlico, sees the U.K. as a potential hub for web3 startups, citing factors such as top-notch universities, a robust capital market, sophisticated financial regulators, and the promise of clear and practical regulation.
In a strategic move following the funding round, Gazso is relocating the entire five-member Pimlico team to London. Justifying this decision, Gazso emphasized, “Despite the magnetic force that you’ll see in places like Silicon Valley and New York, London is really establishing itself as the new crypto hub in the world.”
Smart accounts for mass adoption
Amidst the challenging market conditions and unmet expectations within the crypto industry, a resilient community of developers persists in their unwavering commitment. Pimlico, a notable startup, stands out as a testament to this enduring dedication.
At the forefront of industry focus is the substantial allocation of funds toward advanced technical solutions. Notably, Ethereum, boasting the highest number of active developers among blockchain networks, recently implemented a pivotal technical upgrade known as ERC-4337.
This upgrade standardizes the interaction between “smart accounts” and associated infrastructure, simplifying the implementation of features like email recovery, social logins, and gas fee sponsorship. For those not well-versed in crypto, gas fees have been a significant inconvenience for users navigating transaction fees in a network’s native tokens. Pimlico emerges as a solution, eliminating this obstacle for end users.
The technical enhancements brought about by ERC-4337 empower dApp developers to program functionalities long considered standard for Web 2 user accounts. This marks a crucial stride toward the widespread adoption of self-custodial wallets, particularly in the aftermath of the FTX collapse, which exposed the risks associated with centralized finance. Users are now gravitating towards self-sovereignty over their assets, shifting away from centralized exchanges.
Having co-authored ERC-4337 alongside Ethereum founder Vitalik Buterin and others, Gazso recognized that developers still faced numerous friction points in fully leveraging the new standard. In response, he undertook the development of a set of tools aimed at enabling developers to effortlessly incorporate account abstraction functionality. In his own words, Gazso’s goal is to empower developers to “easily build and scale their smart accounts by relieving them of the burden of building out their own relaying and sponsoring infrastructure.”
In a parallel to the Web 2 landscape, Pimlico aspires to play a role similar to what Stripe does in the digital payments industry. The founder aptly compares the situation to the early days of internet payments, emphasizing the need for a user-friendly, plug-and-play payments network. Pimlico, in essence, is stepping in to fulfill that crucial role.