Hoxton Ventures raises a $40 Million fund, brands itself as a US-centric European fund

Hoxton Ventures raises a $40 Million fund, brands itself as a US-centric European fund

A new Venture Capital fund has been born in Europe: Hoxton Ventures announced today that it has raised a $40 Million fund to invest in European early stage startups. The fund, run by partners Hussein Kanji (formerly Accel & Microsoft), Rob Kniaz & Dylan Collins (serial entrepreneur), will be based out of London, and will making 4-6 investments between $1-$2 Million per year.

The fund already counts four companies among its portfolio – Llustre (acquired by Fab), Campanja, Tizaro & GoCardless. I sat down with Hussein Kanji, who ranked #1 in the the Telegraph’s 100 most influential Tech investors in Europe in 2011, to talk about his vision and direction for Hoxton Ventures:

Hussein-Kanji_1838677cSo. Will you all be based in London?

Yes, we are all based in London but fly frequently to where our entrepreneurs are. Those are our customers and it makes sense to go to them. We’re already regularly in Stockholm and Berlin, and will expand that to Paris and Eastern Europe. We also actively go back and forth between California, usually once ever 6-8 weeks. It’s important for us to remain connected to the ecosystem in Silicon Valley, and serve as a bridge for our entrepreneurs.

Investment range will be €1-5M ?

Our typical checks are $1-2M USD, and probably closer to $2M than $1M USD. We’re not angel investors, but we have now done two investments off of a sheet of paper, e.g. Llustre with £1M GBP and a second that we haven’t yet announced for $1.6M USD. We think entrepreneurs that can scale into $1B+ businesses need all the runway they can get and shouldn’t be capital starved. We also follow on all of our investments.

What kinds of investments will you be making?

We focus entirely on disrupting existing markets or helping entrepreneurs invent new ones. We look for entrepreneurs who want to not just bring a great technology or value proposition to market, but are inventing entirely new industry categories. Think back to the 2004-2005 when it wasn’t clear what a social network was, or 2007-2008 and building a social gaming company when Facebook released a developer API and it wasn’t clear what you could build on top of that shift. There aren’t that many markets that change every year, so we don’t make that many investments.

Why should European startups choose Hoxton over other seed VCs?

We write checks. Seriously, there aren’t that many folks doing what we do, which is writing decent sized checks to early stage European startups. We like first-time founders. We have a thesis that the best companies in our industry are built by founders, often by founders who are doing it the first time around. We focus on helping them build around them so they can scale not only the business but themselves. We act as a bridge to Silicon Valley. We’re well connected in the Bay Area ecosystem and can open doors. We think that ecosystem is incredibly important, even in Europe. That’s where the best and brightest talent lies, that’s where the industry collects information and knowledge (since everyone is there), that’s where a lot of the partners are for businesses in Europe and ultimately that’s also where the buyers are.

We’re a very U.S.-centric European early stage venture fund. So if you’re an entrepreneur who believes Silicon Valley matters, we’d probably be helpful as an investor. We’re former operating guys. We’ve built businesses before and been in the tech industry for a while. We’d like to think this means we get it more than pure financial investors. And we’d like to think it means we’re more helpful than the average investor. The entrepreneurs we’ve funded (GoCardless, Llustre, Campanja, etc) certainly think so.