The Scoop: San Francisco's legacy endures as VCs further globalize the crypto market

This column was co-written by Frank Chaparro, director of special projects at The Block, and Laura Vidiella of MNNC Group. The views expressed in this column are their own and do not reflect the opinions of their employers. 

Frank here, greeting you from the United Club lounge. I’m waiting for my flight out of San Francisco after a weeks-long journey from New York to Jackson and, finally, to San Francisco. Recent events have Laura and me thinking about crypto hubs.

San Francisco has been a cornerstone of technology since the early days of semiconductors, with some of the largest tech firms setting up shop here and sourcing capital from investors from Sand Hill Road to Market Street.

While many believe San Francisco’s role in tech is a relic of the pre-pandemic era, I don't think that necessarily means the 415 has lost its significance. It remains an important place to visit and connect with technologists and capital allocators. I also spent some time north of the city in Sonoma and Napa, and I have to say, California is one of the most beautiful places in the world, blessed with stunning views and unparalleled weather. Plus, the wine wasn’t too bad either! Scribe was a pretty cool spot in Sonoma.

During my visit to a16z’s downtown offices, it became clear from my conversations with the team that San Francisco doesn't necessarily have a booming crypto scene. While most of their crypto investments are based in the U.S., their portfolio reflects the increasingly nomadic nature of the industry, with a growing number of companies emerging from Eastern Europe.

Similarly, DCG's portfolio appears to be targeting new geographies, according to the firm's quarterly update. Founded by crypto mogul Barry Silbert, DCG reported 18 new investments in the first half of the year — a 125% year-over-year increase. These investments span across the U.S., Europe (UK and Germany), Africa (Nigeria, Egypt, and South Africa), Latin America (Mexico and Colombia), and Asia (Malaysia). A friend familiar with the firm says their focus has shifted toward emerging markets and the intersection of crypto and fintech, highlighting both the global and cross-sector nature of the crypto industry.

This aligns with what is arguably one of the clearest product-market fits in crypto: the technology’s ability to open up financial rails and improve accessibility. As Paolo Ardoino of Tether noted during TOKEN2049 in Dubai, "No one in Europe needs a stablecoin" because, while not perfect, Europe already has functioning banking and financial systems. In contrast, emerging markets have quickly embraced the benefits of web3 technology—a shift increasingly reflected in venture capital trends.

Asia, long a hub for crypto mining and offshore trading, has seen a retail boom, sparking a wave of conferences from Tokyo to Seoul to Singapore. Many of you will be heading to the continent for Korea Blockchain Week, TOKEN2049, and Solana Breakpoint.

As for deal flow, I had John Dantoni analyze the data, and here's what he found:

Outside the U.S.:

• Africa and Oceania show mixed trends: Africa saw an increase in deal count but a decrease in funding, while Oceania experienced fewer deals but significantly higher funding.

• Asia and Europe remain major players but have slowed slightly compared to 2023.

Overall, while there is significant investment outside the U.S., North America remains dominant. However, the growing deal activity in Africa and increased funding in Oceania highlight the potential for more diversified investment across regions.