Hoxton Ventures has become London’s latest early stage venture with $40m to invest in European tech firms.
The team have imported the microcap style of funds, normally found in the US, to Europe.
Hoxton’s two founding partners worked in global tech companies and venture capital firms before setting up the company.
Hussein Kanji held an operational role at Microsoft and then worked at world-leading VC firm Accel Partners. Accel were notably one of the earliest investors in Facebook.
Meanwhile Rob Kniaz was at Google and Fidelity Ventures, before joining forces to found Hoxton Ventures.
A US import
Microcap funds are small funds run by former technology executives working closely with entrepreneurs to build value.
This strategy has been responsible for most of the biggest US returns of the last decade, and Kanji says Hoxton Ventures want to bring its advantages to Europe.
In the past couple of years, we’ve seen a gap emerge in the early stage European market
It is difficult for entrepreneurs to raise their first £1-2 million. Too many European investors prefer to wait for businesses to mature.
Hoxton plans to make 4-6 investments a year and focus on European startups newly emerging industry categories.
“Recent research shows there are 4-6 billion-dollar companies being formed each year in the U.S., largely on the back of technology industry changes,” said Kniaz.
Europe is consistently producing a 1-2 of these types of companies a year.
Finding, funding and nurturing them is our mission.
Hoxton Ventures has already made its first investments, including startups Campanja and Tizaro.
In a recent Tech City News roundtable on the future of tech Britain, Kanji said London’s scene needed more time to mature, but more players investing in early stage companies would encourage the ecosystem to grow.