Hoxton Ventures holds first close on $40m

The fund's target stands at $50m, which Hoxton hopes to reach in the next 60 days, according to partner Rob Kniaz. The firm started fundraising around two years ago.

London-based Hoxton was set up by Kniaz and Hussein Kanji, formerly of Fidelity Ventures and Accel Partners respectively.

The two founding partners are adopting the US investment strategy of microcap venture for their Europe-focused fund, which is a small venture capital fund managed by former technology executives. Kanji and Kniaz have held operational roles at Microsoft and Google respectively.

The firm plans on using its connections and networks with employees and management in large tech companies in the Silicon Valley to bring attention to its portfolio companies. Due to their past positions at Microsoft and Google, Hoxton's partners state they are well connected to potential US acquirers.

The fund has a lifespan of seven years, with a three-year investment period. Kniaz described the terms and conditions for the fund as European standard.

Investors
The fund has two cornerstone investors, namely a US family office and European family office.

Kniaz stated that the majority of the fund's LPs are family offices and high-net-worth individuals that have an interest in European technology companies. However, the firm is in talks with some institutional investors that may commit before final close.

Around 20% of the LPs are high-net-worth individuals from the US. The fund is believed to include a GP contribution.

Investments
Hoxton plans on making 4-6 investments per year through the fund, investing $500,000-2m in early stage European technology companies. The fund is open to co-investments.

While the firm doesn't plan on focusing on specific European countries, Kniaz stated that Hoxton will most likely concentrate initially on London, Stockholm and Berlin, as the partners spend a lot of time on the ground in these cities. Hoxton is also planning to explore the market in central and eastern Europe.

The fund will target companies that hold the potential to enter the US market through opening offices or relocating a portion of their teams to the country.

Hoxton Ventures Fund I has already made two investments: Tizaro and Campanja. The fund backed Tizaro, a London-based e-commerce business for maintenance, repair and operations products, and Swedish search engine marketing services provider Campanja in June last year.

The fund is also in the process of making its third investment, which has not yet been announced.

Kniaz stated that the planned exit strategy for the fund's portfolio companies is to sell to large US tech companies, in keeping with the microcap venture strategy.

People
Rob Kniaz and Hussein Kanji are the founding partners of Hoxton.

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