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Below is our recent interview with Mikael Johnsson, Co-Founder and Partner at Growth Capital firm Oxx:
Q: Why did you launch Oxx?
A: My cofounder Richard Anton and I have been investing in Software-as-a-Service (SaaS) companies from the U.K., Nordics and Israel for almost two decades. Over that time, we’ve gathered a lot of experience in growing SaaS companies. We often say that we help companies in danger of getting stuck in ‘the valley of death’ – we’ve seen so many exciting companies who reach a modest size but fail to internationalise and thus never reach their full potential. We wanted to launch a dedicated growth capital firm that applies our years of learnings and helps these promising SaaS companies find not only capital, but also the necessary network and deep sector expertise required to scale up.
Q: What is your approach to working with entrepreneurs?
A: At Oxx we are really entrepreneur-led and hands-on – working with passionate entrepreneurs is one of the best parts of what we do. We like to think of ourselves as taking the role of producer in the production of a movie: we’re not the star and we’re not the director, but take responsibility for the show becoming a success. We do this by supporting entrepreneurs, bringing board members and advisors into play and acting as a sounding board and coach to management, particularly on how to enter and succeed in major markets like the US.
A member of our investment team will almost always sit on the company’s board and provide ongoing advice to ensure that the business scales in the way it plans to. This close relationship is at the very heart of the service that Oxx provides for its portfolio companies.
Q: What should entrepreneurs think about when scaling up?
A: Scaling your business can be a daunting task, but preparation, experience and support is really important in helping you succeed. Make sure you cover your bases: have you checked out your competitors in depth? Have you hired the very best team you can afford? Are you measuring your progress with metrics relevant to you?
An important early priority is determining how you will generate the right sales leads. Get your demand generation strategy in place with your CMO and one or two business development-focused salespeople who are on the ground before you hire a large, traditional sales team. For Oxx’s companies, internationalising is a major focus and we use our relationships, sector-specific knowledge and networks to support our entrepreneurs to build and execute a scaling strategy.
Q: What are your target markets and why?
A: At Oxx, we focus exclusively on scaling B2B SaaS companies originating in Europe and Israel and building out in the US. We are primarily focused on companies originating in the Nordics, UK and Israel because of our particularly strong networks and experience here. Our goal is to take our portfolio companies from local heroes to global players. We’re strict about exclusively working with B2B software companies because we think it’s really important to provide entrepreneurs with exceptional support. That means investing in companies we understand really well and have real experience scaling. In terms of finance, we typically invest in companies with traction, who have a proven business model and revenues of $5m – $20m.
Q: Where do you see Oxx in the next 2-3 years?
A: In a few years we believe Oxx will be the leading fund and go-to partner for ambitious B2B software companies. We will continue adding exciting companies to our portfolio, expand our team further and deliver great returns to our investors. In recent months we have recruited talented associates to accelerate our growth, and we also hope to shortly complete the fundraising in Oxx I, our first fund.