Hoxton Ventures, an early stage venture capital firm, has raised $40 million for its debut fund that will target investment in European technology businesses.
The fund came to market in 2011 held a ‘soft close’ earlier this year. Hoxton hopes to hold a final close on $50 million next year, Rob Kniaz, one of the firm’s founders, told Private Equity International. Hoxton has made five investments to date and expects to make between 20 and 25 investments from the fund.
Hoxton will make four to six investments per year and aims to invests between $500,000 and $2 million per transaction.
Kniaz established the firm with Hoxton partner Hussein Kanji. Both previously worked at venture firms Accel Partners and Fidelity Ventures and held operational roles at Microsoft and Google.
“The fact that we have a heavy emphasis on Silicon Valley, even though we are based in London, makes us unique amongst other European funds”, Kanji said in the statement.
Part of the firm’s strategy will be to address a gap in the early stage European market.
“It’s difficult for entrepreneurs to raise their first £1 million to £2 million,” Kanji said. “Too many European investors prefer to wait for businesses to mature.”
Europe’s venture capital market has historically underperformed US venture capital as an asset class, but a lot has changed, according to Hoxton.
“The quality of the start-ups is improving rapidly. Too few investors have first-hand knowledge of building companies, and offer experience that can really help entrepreneurs scale their businesses,” according to the firm.