Payton Dobbs has plenty of experience helping tech businesses scale, but doing so in a venture context is new to him. In April, he joined Hoxton Ventures as its newest partner after advising the London firm since last August.
Dobbs spent the past 15 years at Google helping three separate business units build their product portfolios and expand into new markets. He has been friends with Hoxton co-founder and partner Hussein Kanji since meeting him at London Business School, where he earned an MBA in 2007.
Dobbs had planned to stay in London after graduating from LBS but was lured back to the San Francisco Bay area in 2007 by the opportunity to work at Google. After a stint at AdSense, he moved to AdWords to work in Sheryl Sandberg’s online sales and operations group. Three years later, he was leading large customer sales as head of industry for financial services. Shortly after Google acquired Nest Labs from Apple in 2014, Dobbs was selected to build Nest’s global sales operation to scale its product and global expansion. He returned to London in 2017 to lead Nest’s sales business for Europe, the Middle East and Africa.
The attraction to joining 10-year-old Hoxton was the chance to have a bigger impact in the European market than Nest afforded him. Hoxton invests in early-stage tech start-ups in Europe and introduces them to investors in Silicon Valley when they’re ready to raise larger rounds.
Dobbs joins Hoxton as Robert Kniaz, who co-founded the firm with Kanji in 2013, is reportedly planning to leave to launch another firm focused on deep tech investing. CNBC reported in February: “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.”
Venture Capital Journal asked Kanji if Dobbs was recruited at least in part because of Kniaz’s planned transition. He replied via email, “We are no longer a scrappy, new venture fund. Rather, Hoxton turns 10 in November. We are consciously building out the firm and growing out the partnership with experience.”
Whereas at Google Dobbs focused across the core digital ads products and hardware portfolio, at Hoxton “I can have a breadth of impact and exposure across everything from deep tech and tech bio to consumer internet, and enterprise SaaS,” he told VCJ.
Dobbs is quick to point out that while it may seem that his experience has been mostly at mature, later-stage companies, he joined Google and Nest when each was fairly early in its development. While both were far from seed-stage, they provided practical lessons about how to operationalize growth that are applicable to nascent companies, he said.
Both AdSense, which caters to content publishers, and AdWords, now known as Google Ads, “became models for the broader monetization of early consumer internet companies,” he noted. “We’re looking to bring some of that expertise to bear here to [Hoxton’s] portfolio companies.” He wants to assist those companies in developing their hiring practices, work design, budget management and business oversight to “help them set themselves up for success as they scale.”
Kanji told VCJ that Dobbs “brings a depth of experience in building organizations and best practices from Google.”
Putting Fund III to work
Hoxton is investing out of its largest fund to date. It closed on $215 million – more than twice the size of its sophomore fund – for its third fund last spring. The fund is partially deployed and is following the same trajectory as Hoxton’s first and second funds, which closed on $40 million and $100 million, respectively. Fund III expects to back 35 start-ups with an average check size of $3 million and hold some capital in reserve for follow-ons. Hoxton has maintained a consistent mix of limited partners that includes fund of funds British Patient Capital, institutions and some family offices across Europe and the US. Hoxton aims to expand its LP base and has begun forging relationships with endowments and other institutions.
Hoxton’s exits include food delivery service Deliveroo (LSE: ROO), which raised £1.5 billion in its March 2021 IPO; cybersecurity AI provider Darktrace (LSE: DARK), whose April 2021 IPO was valued at £1.7 billion; and health tech company Babylon Health (NYSE: BBLN), which went public in late 2021 via a SPAC reverse merger with Alkuri Global Acquisition Corp that raised $275 million. Each of the companies has had a rocky trading history since going public, with Babylon set to be taken private again through a restructuring deal with credit fund AlbaCore.
Another Hoxton investment, SuperAwesome, whose software protects kids’ identities during online gaming, was acquired for an undisclosed amount by Fortnite creator Epic Games in September 2020.
Diamonds in the rough
Dobbs is right at home at Hoxton, where the partners are all transplants from the US, having worked in Silicon Valley at one time or another and maintained relationships with later-stage VCs there.
“We use that as a differentiator in the market,” said Dobbs. “We incubate here [in the UK] and we export to the addressable market in the US and then do follow on rounds with American VCs.” US VCs that have worked with Hoxton include Khosla Ventures, Lux Capital and Founders Fund.
Close friends of Dobbs who have also transitioned to venture have expressed interest in dealflow from European start-ups looking to expand into their particular markets in the US. One works at “a sector-agnostic early-stage firm that believes Europe is an underserved market that can help facilitate growth within the US after initial market validation,” Dobbs said. Another, who’s from Europe and focused on enterprise SaaS, “sees the academic and research-based talent coming out of Europe as a strength,” while others are keen to find “the proverbial diamond in the rough and want to make sure they are casting a wide net [looking] to us as a guide” because they lack teams on the ground, he added.
One lesson Dobbs credits Nest co-founder and former CEO Tony Fadell and his team with teaching him is the need “to care about the customer deeply and understand their needs, gaps, solutions. And once you figure that out, stay close to them.”
Fadell once explained the difference between Google and Apple as a technological versus a market-driven approach to innovation. Neither is better or worse, and both have built strong, successful businesses. “But when you look at Nest, which took much more of that Apple market-driven approach, it was about going very deep on a very specific user pain point or consumer problem and then solving for that problem,” Dobbs said.
Understanding their product and market and what’s right for each business is what Dobbs is trying to bring to Hoxton’s portfolio companies.
Dobbs is also looking forward to applying what he learned from Google melding its hardware, software and services businesses into one to some of Hoxton’s investments. One example is portfolio company Giraffe360, a camera-based hardware maker that enables realtors and others in the real estate industry to take interior photos of a property for sale, and model those in 3D virtual software to create 3D virtual tours of homes. Hoxton participated in Giraffe360’s Series A round, led by Founders Fund, which raised $16 million in venture funding and $6 million in venture debt in November.
Giraffe360 “is a great example of blending hardware, software and services into one,” said Dobbs. “It’s no easy task, and they’re doing it really well and that’s part of what I’d love to help others do as well.”
This is part of a series of occasional profiles about new partners at venture firms. You can suggest profile candidates to David Bogoslaw here.
The third and ninth paragraphs have been updated to reflect a corrected date and descriptions of various business units at Google.
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