Hoxton Ventures, an early-stage venture firm that invests in European tech startups, has closed its second fund. No financial terms were disclosed; however, other media outlets have pegged the amount to be a little less than $100 million. The fund is backed by British Patient Capital.
June 18, 2020 – Hoxton Ventures announced the final close today of Hoxton Ventures II L.P., an early stage European venture capital fund building on the firm’s record of finding and investing in “unicorns,” which includes seed investments in Babylon Health, Darktrace, and Deliveroo.
Hoxton’s strategy of finding companies that can scale globally into large, category-defining leaders in newly forming industries has led it to becoming one of Europe’s top-performing early-stage venture capital firms. The firm’s first fund has the highest ratio of unicorns to investments, according to Dealroom.
“We set up Hoxton to address a market gap at a time when few venture firms wanted to invest at the early stage in Europe,” said Hussein Kanji, a partner at Hoxton. “Success stories like Darktrace and Deliveroo show that our region can produce large, global tech winners.”
“The availability of venture capital is still far lower per capita here than tech markets like Israel and Silicon Valley,” added co-founding partner Rob Kniaz. “We’re delighted to help fill this funding gap and deliver top-tier returns for our investors.”
The second fund saw increased commitments from investors in Hoxton’s first fund, alongside commitments from new British, Swiss and U.S. institutional investors. New limited partners include British Patient Capital, the largest investor in U.K. venture capital.
Catherine Lewis La Torre, CEO, British Patient Capital said: “Our mission is to enable long-term investment in innovative companies across the UK, led by ambitious entrepreneurs who want to build successful world-class businesses. Hoxton’s approach to investing early, and then supporting founders with business know how, access to global markets, and connections to later-stage growth capital investors is well aligned with that our mission.”
Hoxton focuses on leveraging its partners’ connections to the U.S. market. The fund expects most of its investments will target the U.S., either by opening offices in the U.S. or building a sales presence in the U.S.
“As Silicon Valley costs have skyrocketed and quality of life in the Bay Area has decreased, it makes more sense than ever to build engineering in Europe,” said Kniaz. “But European entrepreneurs cannot underestimate the importance of America.”
Hoxton’s investments have received investments from many leading U.S. venture capital firms including Accel Partners, General Catalyst, GV, Index Ventures, Insight Venture Partners, Khosla Ventures, KKR, Lux Capital, Summit Partners, Technology Crossover Ventures (TCV) and Village Global.
“Entrepreneurs choose to work with us because we act as a bridge between the U.S. and European markets,” said Kniaz. “We focus on making sure our companies are well connected in Silicon Valley for partnerships, follow-on funding and eventual acquisition or IPO.”
Hoxton operates similarly to many successful U.S. venture funds, running as a small team, investing across technology sectors, and working closely with entrepreneurs as a business partner. The firm only recently added a third partner, Rob Ludwig, at the end of 2019, who joined as the firm’s chief operating officer.
The new fund began investing in early 2019 and has made 20 investments across a range of sectors, including seed investments in FabricNano, a next generation enzyme business, Fy!, a homewares marketplace, Kheiron Medical, an artificial intelligence radiology startup, and Preply, an online education company.
Approximately one-sixth of the fund’s investments were made after the start of the COVID-19 crisis.
“Some of the best companies are built in a downturn,” said Kanji. “Our patient, long-term approach means we are happy to take the long view on markets that may be early in their development but will grow exponentially irrespective of the macroeconomy.”
About Hoxton Ventures
Hoxton Ventures is an early stage venture capital firm investing in European technology startups that can scale into large, global winners. It focuses on startups that either disrupt existing industries or invent entirely new market categories. It was an early investor in Babylon Health, Darktrace and Deliveroo, and its portfolio companies have grown to an aggregate value of over $7 billion. Hoxton typically invests between $500,000 and $5 million into pre-seed, seed and Series A stage companies, and follows its capital through the life of the company. For more information please visit https://www.hoxtonventures.com.
About British Patient Capital
British Patient Capital is the trading name of British Patient Capital Limited, a wholly-owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. It forms part of the British Business Bank’s commercial arm. Its mission is to enable long-term investment in innovative firms led by ambitious entrepreneurs who want to build large scale businesses. British Patient Capital has been given new resources of £2.5bn and will deliver a programme designed to support high growth potential innovative UK businesses in accessing the long-term financing they require to scale up. Find out more at britishpatientcapital.co.uk.