Specific: VC firm OXX is looking to invest in four B2B SaaS companies in 2023, according to its co-founder.
London based VC Invests in software companies at Series A stage in the UK, Europe and Israel, investing between £5m and £20m in funding rounds of up to £20m.
Its co-founder Richard Anton says the VC firm is actively deploying now that the market is “very healthy.”
“The VC market is much more discerning,” he tells WebMD. growth business, “It went through 2020 being overly exuberant and losing discipline in terms of valuations and the way companies were growing.
“It was growth at all costs rather than capital efficient growth. It was very difficult for us in those difficult times because there was no discipline. There was a lack of reality in those times.
Anton has been in the venture industry since the mid-nineties and worked in the venture arm of private equity firm Apax Partners investing in software at Series A stage.
“I see extreme volatility with early stage software investments,” he said. “Early stage software companies go through the process of finding a suitable product market for their technology – it is a very uncertain process in terms of chances of success, how long it will take and cost.
“Going through that period of the dot-com boom and bust, I came to the conclusion that it was much more attractive to invest at a stage where software companies had already found their product-market fit and were relatively early in their scaling journey ”
In 2006, Anton met Mikael Johnsson, co-founder of OXX, when their respective companies were co-investing.
“We had the same philosophy on how to work with entrepreneurs, which is to act as a partner to them, understanding their business sector with a high degree of emotional intelligence and not acting like a radical sharp-elbow financier. The opposite has to happen.
“At Oxx, entrepreneurs say we understand SaaS and act as partners for them. This is a distinction about us.
After then working together at Amadeus, a deeptech investor specializing in B2B SaaS, they founded Oxx in 2017 with the aim of becoming Europe’s go-to investor for B2B SaaS companies in their early development phase.
“The most attractive funds have historically been the Nordics, the UK and Israel because they are very internationally oriented with similar ways of building SaaS businesses and how they entered the US,” he says.
“Companies face very similar challenges and we help them grow their skills in those spaces.”
Companies he has invested in include Good GodA residential rental SaaS start-up that digitizes the reference and contract process, and codalityWhich assesses the skills of software developers for recruitment and professional development.
“There is a lot of gloom and gloom at present, but it is not all gloom,” he reassures. “It’s a great time to be building a business. Talent is available now, last year there was a war for talent and it was hard to find.
“It is also a good time to invest in product development as there will be an uptick. And in the meantime, you have this juggernaut of digitization of the global economy. It is not stopping for recession or interest rate problems, it continues.
“This is why we love SaaS – because software is growing as different sectors digitize. There is also Drive to the Cloud within the software. There are a lot of opportunities in SaaS even in this environment.
What OXX looks for in founders:
You really understand the problem you’re solving: “You understand the customer’s needs so well, you are an insider to the problem your company is solving.”
You have a vision: “A vision on how to build a potentially category-defining company. You have to have a larger purpose for the company, something that is going to make the world a better place in some way. If you have that, it’s a good idea to have a company.” It’s a good rallying cry and something we can get behind. If you have a sense of purpose you can build a good business.”
Based and realistic on how to grow: “You, like us, are grounded in reality.”
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