‘A unique opportunity’: Plans for Oxx’s $133m European SaaS fund

18 Feb 2020

Richard Anton. Image: Oxx

After raising a new $133m fund, Oxx general partner Richard Anton discusses what the VC firm is seeking when it comes to investing in European SaaS companies.

Earlier this month, venture capital firm Oxx announced that it has raised $133m to back European SaaS companies.

Headquartered between London and Stockholm, the VC invests in software applications and infrastructure, with a focus on five key themes: data convergence and refinery, future of work, financial services infrastructure, user empowerment and sustainable business.

Ox has already invested in companies such as Funnel, which automates marketing performance reporting and intelligence for businesses; Apica, which is a performance monitoring platform for large enterprises; and Codility, which is a tech recruiting platform for hiring at scale.

Its new fund is backed by investors such as British Patient Capital, Pool Re, PFR, OurCrowd, and a number of other institutions and individuals.

What makes Europe stand out

In a statement, Oxx said that it wants to change the “growth at all costs” mindset of B2B software investment, by encouraging portfolio companies to build sustainable businesses that can retain market dominance, rather than pushing for an oversimplified, one-size-fits-all growth model.

The firm said that Europe presents “a unique opportunity”, as there are an increasing number of founders who are starting their second, third or even fourth B2B software business, as well as an abundance of highly skilled and relatively affordable tech talent. Additionally, there are lower levels of VC investment per capita than in the likes of Asia or the US.

In his statement about the new fund, Richard Anton, co-founder and general partner of Oxx, said: “Oxx’s raison d’être is to make sure that companies that already have strong commercial traction are primed and ready to drive continued sustainable growth towards market dominance. In a climate of ‘growth at all costs’, this makes us contrarians; we are seeking out our founder counterparts.

“And Europe is the market to be operating in: a unique combination of entrepreneurial zeal, more and cheaper tech talent than the US and generations of success are fast creating a world-beating software hub.”

‘There are so many inefficiencies in the world that SaaS can solve – those are the kind of things that we invest in’

Co-founder and general partner Mikael Johnsson added: “As a firm, our approach is to play producer, rolling up our sleeves to keep the show on the road. We help out and add value in whatever way we can, ensuring that the entrepreneurs building these businesses are the star of the show.”

Prior to co-founding Oxx in 2017, Anton and Johnsson were partners at Amadeus Capital.

Solving inefficiencies

Ahead of the funding announcement, Anton told Siliconrepublic.com what the firm is seeking in the future when it comes to investing in SaaS start-ups.

“We’re quite a new firm, just over three years old. What we’re about is investing solely in B2B software companies in Europe,” he said. “We invest at a certain stage, so the businesses have some initial traction and repeat customers, typically they have 50 to 100 employees at the time that we come in. By then, they have succeeded in their home market and are growing internationally.

“We’re particularly interested in companies that want to succeed in expanding into the US market, and those looking to raise funds anywhere in the $5m to $20m range. We’re looking for companies that are more mature than Series A, but not really substantial businesses. Comfortable overall and growing at quite a pace.

“There are so many inefficiencies around us in the world that SaaS can solve,” Anton added. “Those are the kind of things that we invest in. Our ambition is to be the investor of choice in Europe for companies that solve those problems.”

Starting out in the Nordics

While Anton has a soft spot for Ireland, after investing in Killiney-based digital payments company Valista before it was acquired by Aepona in 2009, he said that Oxx will be mainly focusing on Nordic countries as Johnsson has a comprehensive knowledge of the SaaS ecosystem in the region.

“I have lots of memories of taking the M50 from the airport to Killiney,” Anton said, commenting on his work with Valista. “I liked it even more driving the long way, through all of the country lanes and around Wicklow. That’s a beautiful drive, but that was in years past! We haven’t done anything there in recent years, but I suppose we will eventually.

“In a year or two, we hope to be acting more broadly around Europe,” he added. “We won’t be working with direct-to-consumer start-ups, where a lot of start-ups can be quite similar to each other. We’re interested in companies that are using machine learning to distinguish themselves and intrigued by insurance risk assessment technology.

“In this particular area, there are start-ups capable of gathering unparalleled datasets about risk and entities that could be insured. That means that their machine learning algorithms can get trained on the richest dataset and continually reinforce better performance than is available to others.”

Kelly Earley was a journalist with Silicon Republic