Richard Anton. Image: Oxx
We spoke to Oxx general partner Richard Anton about what he’s seeking in European SaaS companies and how investing in Ireland provided him with some fond memories of driving around Killiney and the Wicklow mountains.
This month, B2B software investor Oxx announced that it has raised $133m to back European SaaS companies.
Headquartered between London and Stockholm, Oxx 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.
The firm has already invested in companies such as Funnel, which automates marketing performance reporting and intelligence for businesses, as well as Apica, which is a performance monitoring platform for large enterprises. The venture capital firm has also invested in Codility, which is a comprehensive tech recruiting platform for hiring at scale.
The fund is backed by investors such as British Patient Capital, Pool Re, PFR, OurCrowd and a number of other institutions, family offices and high net worth individuals.
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 on the continent 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 far lower levels of VC investment per capita than in the likes of Asia or the US. 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.”
Co-founder Mikael Johnsson said: “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.”
Ahead of the funding announcement we spoke to Anton, who told Siliconrepublic.com what the firm is seeking in SaaS start-ups. Prior to co-founding Oxx with Johnsson in 2017, the two founders were partners at Amadeus Capital.
Anton said: “We’re quite a new firm, just over three years old. What we’re about is investing solely in B2B software companies in Europe. 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.”
Anton, who is a general partner at Oxx VC, said: “There are so many inefficiencies around us in the world, that SaaS can solve. 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.”
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.
Commenting on his time investing in Valista, Anton said: “I have lots of memories of taking the M50 from the airport to Killiney. 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.”
Anton told Siliconrepublic.com: “In a year or two, we hope to be acting more broadly around Europe. 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.”