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Hoxton Ventures new fund will ‘act as bridge’ between US and Europe

Hoxton Ventures has held the final close of its second fund, an early stage European VC fund, which includes seed investments in Babylon Health, Deliveroo and Darktrace.

Existing investors in Hoxton’s first fund have invested in the second fund as well, alongside capital from new British, Swiss and US institutional investors. New LPs include the largest investor in UK venture capital – British Patient Capital.

London-based Hoxton Ventures is one of Europe’s top-performing early stage VC firms; according to a recent evaluation by data sharing platform Dealroom, the firm’s first fund has the highest ratio of unicorns to investments in Europe.

The new fund began investing in early 2019 and has made 20 investments so far. They include seed investments in FabricNano, a next generation enzyme business, Fy!, a homewares marketplace, Kbox Global, a cloud kitchen business, Kheiron Medical, an artificial intelligence radiology startup, and Preply, an online education company.

Nearly one-sixth of the fund’s investments were made after the start of the pandemic. Hussein Kanji, a partner at Hoxton, is of the view that some of the best companies are built in a downturn.

“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,” said Kanji.

Kanji and Kniaz set up Hoxton to address a market gap at a time “when few venture firms wanted to invest at the early stage in Europe,” in Kanji’s words. “Success stories like Darktrace and Deliveroo show that our region can produce large, global tech winners,” he added.

“The availability of venture capital is still far lower per capita here than tech markets like Israel and Silicon Valley,” commented Hoxton Ventures co-founding partner Rob Kniaz.

Hoxton’s investments have received follow-on funding rounds from US VC firms including Accel Partners, GV, Index Ventures, Insight Venture Partners, KKR, Summit Partners, and Technology Crossover Ventures.

“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 the US market.”

The fund said it expects most of its investments will target the US, either by opening offices or building a sales presence there.

“Entrepreneurs choose to work with us because we act as a bridge between the US and European markets. We focus on making sure our companies are well connected in Silicon Valley for partnerships, follow-on funding and eventual acquisition or IPO,” said Kniaz.
Hoxton Ventures added Rob Ludwig to the team at the end of 2019, acting as the firm’s COO.

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