Meet the investors: Oxx
The founders of the new VC firm will help B2B software businesses bridge the "valley of death"- but don't come to them for funding if you're a "cool kid"
Names: Richard Anton and Mikael Johnsson
Where are you based?
We are based in London and in Stockholm and as a result know the UK and the wider Nordic markets and investment opportunities inside-out.
On top of this, we know Israel well and work frequently there and across other European markets.
What kind of investor are you?
Oxx invests in companies at the ‘scale-up’ stage of their life-cycle. This is the stage of development between early-stage venture capital(VC) and maturity, an infamous funding gap amongst entrepreneurs and is known as “the valley of death”.
Simply put, our role is to bridge it and help businesses reach the next stage.
What kind of deals do you finance?
We are flexible in the way we work, but financing usually falls within a range of $5m to $20m in size. The important aspect for us is that the businesses we finance demonstrate strong commercial traction already and need a new injection of capital to scale up once again.
What kind of person do you invest in?
Without exception we invest in teams with proven entrepreneurial success. The entrepreneurs behind these companies are typically already on their second, or third company, or even beyond.
They tend to be aged in the mid-30’s to early 50’s; we’re not looking to back “cool kids”.
How do you source prospects?
We have an already-existing network of businesses, co-investors, industry executives and advisors that we know well and who know us well.
A lot of our prospects are therefore sourced through individual relationships.
What is your ideal investment?
Our ideal investment is with a business to business (B2B) software company with strong competitive differentiation, demonstrable figures and commercial traction.
What are your USPs?
Our USP is our knowledge of the B2B software market and our financial backing, allowing us to finance businesses at the scale up stage. Our in-depth knowledge of this area and deep connections in the market is what sets us apart.
What are the hot sectors?
Within B2B software, we see cloud computing and Software-as-a-Service (SaaS) becoming mainstream.
Particular sub-sectors and niches that we like are cyber-security, big data and machine learning and enterprise productivity tools.
Three things a company should be able to offer an investor?
Companies need to be able to:
- Succinctly describe their competitive positioning and competitive advantage.
- Offer investors clear, strong data that proves commercial acumen
- Provide a clear growth plan as to what exactly the investment will be used for.
What is the cardinal sin when looking for investment?
Overselling and using “vanity-metrics” that aren’t correlated to the ultimate success of the business.
We understand that businesses want to sell themselves and make potential for growth look as good as possible, but demonstrating real facts and figures is far more attractive than exaggerated potential.
What continuing involvement do you like in an investment?
We are very active and work very closely with all the businesses we’ve helped to date. Our in-depth knowledge means many businesses we work with often use us as a soundboard – which we are more than happy to offer!
What has been your best performing investment to date?
All our successful investments have rewarded us in their own ways (Anton and Johnsson were previously partners at Amadeus Capital), so picking a ‘best’ is very difficult.
We have some deals that are more financially remunerative, but others open up new doors or add a different sector to our portfolio.