A prominent Silicon Valley venture capital firm is opening its first office in D.C. to be closer to both Greater Washington startups and the policymakers regulating industries in which it invests. It's at least the third VC firm to either expand in or relocate to the region in the past two months.
Menlo Park, California-based The Westly Group, which backed the likes of electric vehicle maker Tesla Inc. and cybersecurity firm SentinelOne Inc., before they went public, has signed a multi-year sublease deal at 1701 Rhode Island Ave. NW, taking over a chunk of space formerly occupied by WeWork Inc.
Steve Westly, the founder and managing partner of the firm, told me he doesn't know the exact square footage but said it's on the "smallish" side. Still, he expects the firm to quickly ramp up its presence here as it did with its San Francisco office, which it opened eight months ago with three people and has since doubled its size.
"We believe the Washington, D.C., part is going to be bigger and bigger because so many industries — like the energy sector, like mobility, like AI — are largely governed, managed and regulated out of Washington," said Westly, who founded his namesake firm in 2007.
Other investment firms have reached similar conclusions.
Silicon Valley's largest and best-known venture capital firm, Andreessen Horowitz, just established its first D.C. office, subleasing 12,000 square feet from FedEx Corp. at 800 17th St. NW. Also, Veteran Ventures Capital relocated its corporate headquarters from Knoxville, Tennessee, to Tysons to be closer to the types of startups it targets for investments: national security contractors led by one or more veterans.
Westly said his firm will be looking to back local startups with its recently closed $100 million seed fund and from other investment vehicles like its $312 million Fund IV, which focuses on Series A, B and C funding rounds. The Westly Group primarily backs startups working in energy and mobility, like autonomous vehicles, as well as those in the building and industrial sectors.
Nick Albanese, vice president of research and strategy, will lead the company's local office, eyeing both investment opportunities but also establishing relations with policymakers and regulators.
"This is just pure opportunity; not as many venture firms have bet on D.C.," Westly said. "We think especially with energy and mobility, you've got to be in the D.C. area or have people there. We think the potential economic upside in the region is huge."
