In recent years, novel biofabrication technologies have enabled the rapid manufacture of hydrogel-cell suspensions into tissue-imitating constructs. The development of novel materials for biofabrication still remains a challenge due to a gap between contradicting requirements such as three-dimensional printability and optimal cytocompatibility. We hypothesise that blending of different hydrogels could lead to a novel material with favourable biological and printing properties. In our work, we combined agarose and type I collagen in order to develop a hydrogel blend capable of long-term cell encapsulation of human umbilical artery smooth muscle cells (HUASMCs) and 3D drop-on-demand printing. Different blends were prepared with 0.25%, 0.5%, 0.75%, and 1.5% agarose and 0.2% type I collagen. The cell morphology of HUASMCs and the printing accuracy were assessed for each agarose-collagen combination, keeping the content of collagen constant. The hydrogel blend which displayed sufficient cell spreading and printing accuracy (0.5% agarose, 0.2% type I collagen, AGR0.5COLL0.2) was then characterised based on swelling and degradation over 21 days and mechanical stiffness. The cellular response regarding cell attachment of HUASMCs embedded in the hydrogel blend was further studied using SEM, TEM, and TPLSM. Printing trials were fabricated in a drop-on-demand printing process. The swelling and degradation evaluation showed an average of 20% mass loss and less than 10% swelling. AGR0.5COLL0.2 exhibited significant increase in stiffness compared to pure agarose and type I collagen. In addition, columns of AGR0.5COLL0.2 three centimeters in height were successfully printed submerged in cooled perfluorocarbon, proving the intrinsic printability of the hydrogel blend. Ultimately, a promising novel hydrogel blend showing cell spreading and attachment as well as suitability for bioprinting was identified and could, for example, serve in the manufacture of in vitro 3D models to capture more complex features of disease and drug discovery.