What Oxford Capital’s Tom Bradley looks for in UK tech companies
I spoke to Tom Bradley from Oxford Capital about his background, his UK tech investment strategy and his predictions for the industry.
Here’s what he had to say.
What were you doing before Oxford Capital?
I’ve been in VC for almost all of my career. Before I joined Oxford Capital I was a partner at DN Capital where I invested in companies such as Partnerize, Hometogo, Eve Sleep and more. Before that I was one of the founders at Draper Esprit. Back in 2000 I was tricked into thinking venture capital was easy by joining an oversized SOFTBANK fund at the top of the market. Sound familiar?
Tell me about Oxford Capital, what it does and how it differs from other funds?
Firstly, we are all about the UK. We talk about investing in ‘Best of British’ and that is our short-hand for investing in parts of the technology market where the UK can produce world class or world leading businesses. We look for opportunities close to home but this should not be mistaken for an insular view.
We have been investing continuously in the UK venture capital market for 20 years, and that gives us a certain perspective on things and gives founders in our portfolio the confidence that we will still be around tomorrow to support them. We are one of the most active funds in early-stage UK tech and our coverage of the UK market is surpassed by few.
We are typically Seed and Series A investors, partnering with great founders early in their journeys and supporting them as they grow. We invest behind expertise and with conviction. We organise our investment activity around key themes that we believe fit the ‘Best of British’ mould and where we believe there is significant 10-year change to invest behind.
In terms of approach we try to put ourselves in founders’ shoes and be easy, transparent and straightforward to work with. We’ve developed our own solution to measure our “Founder NPS”. For those not familiar with NPS, it is a commonly use system to track satisfaction with one’s product or service (and we love to see companies using it!).
How many pitches do you get a year? How many of these turn into meetings with founders?
We will see around 3,000 pitches this year, about 500 of those translate into a meeting with founders. Going in to detail on business cases with founders is what we love doing most. We want to maximise the time we spend out there doing that.
What do you look for in an entrepreneur?
That’s a really hard question because every one is unique. We want a diverse team and a diverse portfolio. We want to back people we have had success with before but we also want to identify the next generation of stra-founders and we will take risks on first time entrepreneurs. If I was trying to generalise we look for founders who are bold, energetic, collaborative in their approach, mission-driven, and who look for and know how to find truth in data. We look for people with whom we can forge lasting and successful relationships. People we get and who get us. When we invest in a company we will spend a lot of time with the founders and the team. It should be challenging but it should also be enjoyable.
What are the best pitches you’ve ever received and why?
The most important thing in a pitch for us is the team. The founders are the life, soul and engine of a startup, particularly at the early-stage. Then we look at the product or product vision: companies that make product a core part of their DNA are more likely to be winners in our book. And last but definitely not least, we rate pitches that are setting out visions to conquer huge markets and achieve big outcomes.
Naturally, the best pitches we’ve ever received are often the ones we invested in! We look for pitches that match the ambition of Curve in upending the FinTech stack. Pitches that project a similar rocket like trajectory to Snap in the leisure travel market. Pitches tackling problem-sets as large as Xihelm’s in food and agriculture. Pitches from teams with the same experience and technical mastery as Rahul and Randal, the founders of Red Sift. I won’t go through our entire portfolio, we are extremely proud of all of them. We may have been wooed by their pitches but we also try to look beyond the gloss and beneath the surface to understand the drive, capability and motivation of the teams.
What are the worst pitches you’ve ever received and why?
They’re usually the ones where we are told we can’t see the details for fear of us stealing the idea. Not only does it mean that we can’t make an assessment, but it also demonstrates a lack of understanding of our business model. We are in a very privileged position when it comes to information, we see a large number of pitches, all from private companies determined to keep their competitive edge whatever it may be. Were we not to tread lightly with that information, that access would be immediately cut off by the market, and our business would collapse. Maintaining our standing and trust with the market is at the centre of everything we do.
What are the strengths and weaknesses of the UK tech sector?
Let’s get the negativeness out of the way first. In terms of weaknesses our local scene doesn’t have the same proportion of big thinking moonshots we read about in the US.
But we have amazing people, an incredible cluster of academic talent, a growing band of successful repeat entrepreneurs, a community and team spirit that is great to experience every day, along with a supportive, clear and unified regulatory environment (current uncertainty excepted). With a recipe like that, there is no doubt that we will see homegrown runaway successes multiply.
What technologies are you excited about and why?
We have focused on areas where we think the UK can produce global winners. We have been investing and looking closely at the future of mobility, financial technologies, the future of retail, and digital health. We are at the beginning of an AI explosion and that is touching all of these verticals and more. We are also excited by the role of technology in food and agriculture and the continued enhancement of productivity in all sectors.
The UK is well placed to produce highly valuable companies in all these areas. In FinTech and InsurTech, this is helped by an enlightened regulator and close links between the startup scene and the city. In mobility, Britain has a long history of motoring success and innovation which is now being coupled with market-leading machine learning research. On the retail front, we have one of the highest e-commerce penetration rates in the world and a sophisticated high street. In health, our NHS, which has been a driver in broadening access to care since its inception, is now leveraging the power of technology partnerships. While in productivity, automation and upskilling will continue to be key to drive the economy forward.
What technologies are you not interested in and why?
We are wary of ‘me too’ models and are reluctant to get involved with businesses that don’t have a high level of recurrence in their revenue models. That said, we keep an open mind to all ideas and we love having our assumptions on a sector or technology challenged by founders who are in the trenches for real in those areas.
Where do you see UK tech going?
We are bullish about UK tech. It will continue accelerating, it has reached a critical mass where success breeds success and so on. More specifically, we expect to see more deep tech success stories emerging: This country has incredible depth to its technical bench in machine learning and other areas that are more scientifically involved – more of these people will form in to world-class teams and we look forward to backing many of them in the cycles to come.