Technology-focused early stage investor Hoxton Ventures has closed a $40m fund to focus on European startups.
The firm plans to back four to six European companies per year. It said that after the US and China Europe has the best conditions to build large, valuable companies, ahead of Israel and India.
It added that entrepreneurial conditions in Europe are changing fast, creating a mismatch between an increasing entrepreneurial talent base and a declining venture capital market and it is difficult for European businesses to raise their first £1-2m as investors prefer to back later-stage companies.
The firm’s founding partners Rob Kniaz and Hussein Kanji have made five investments over the past two months including two from the fund. One of their investees, Llustre, was acquired by Fab.com in June 2012.
Hoxton expects many of its portfolio companies to open offices or relocate parts of its team to the US.
Rob Kniaz said, “Recent research shows there are 4-6 billion dollar companies being formed each year in the US, largely on the back of technology industry changes.
“Europe is consistently producing a 1-2 of these types of companies a year. Finding, funding and nurturing them is our mission.”
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