A Deliveroo rider near Victoria station on March 31, 2021 in London, England.
Dan Kitwood | Getty Images
European venture capital firm Hoxton Ventures, a backer of some of the U.K.’s best-known tech unicorns, is set to lose one of its founding partners.
Rob Kniaz, who co-founded Hoxton in 2013 with Hussein Kanji, is in talks with institutional investment firms about establishing a new venture capital fund focusing on deep tech investing, sources familiar with the matter told CNBC.
Kniaz’s departure is not imminent and he will continue managing the $215 million fund the firm raised last year as well as its previous two funds as he prepares to eventually exit to focus on his new VC fund, according to the two sources, who preferred to remain anonymous as the information has not yet been made public.
The timeline on Kniaz’s departure remains unclear at this stage, the sources added.
Hoxton on Wednesday confirmed Kniaz’s plans to leave the firm and set up his own specialist fund. In a statement, Hoxton said: “The European market has developed rapidly over the last few years, particularly in deep tech and Hoxton has been considering how to respond to these changes beyond its current fund.”
“Rob sees an opportunity to run a more specialized vehicle with a different structure, whereas Hussein wants to double down on the success of Hoxton’s non-thematic approach. Rob is therefore planning on launching a new fund, outside of Hoxton.”
Hoxton added: “Rob will continue to maintain his board seats and be fully involved in the existing Hoxton funds throughout their existence.”
Kanji and Kniaz, two Americans who moved to the U.K. to invest in European startups, have backed some of the country’s most notable unicorns. They include Amazon-backed food delivery app Deliveroo and cybersecurity firm Darktrace.
News of Kniaz’s plan to exit the firm arrives at a tumultuous time for the tech industry. Last year was a tough one for growth-stage startups, whose valuations declined in response to rising interest rates and softer consumer spending. Layoffs have also plagued the industry.
Some of Hoxton’s portfolio companies have seen their public market values sink as investors re-examined their exposure to tech.
Deliveroo has fallen 68% since it debuted in April 2021. Darktrace, which floated shortly after Deliveroo, is down 21% below its IPO price and is the subject of a short-seller attack over alleged flaws in its accounting. Telehealth firm Babylon Health has lost 95% of its market value since going public via combination with a special purpose acquisition company.
Nonetheless, Hoxton generated a hundredfold return on its early bets on Deliveroo and grew the value of its Darktrace position nearly fiftyfold since first investing in the company, according to one of the sources.
It did however lose money on its Babylon Health deal, the source added.
The move raises questions about the firm’s future success. Hoxton has backed a total of 68 companies to date, according to Dealroom data. Its investments are managed by three partners, including Kanji, Kniaz, and Charles Seely. Rob Ludwig serves as its chief operating officer.
However, according to one source, Hoxton isn’t closing the door on expansion — the firm plans to appoint some new partners this year.
Image and article originally from www.cnbc.com. Read the original article here.