VAR Capital organised a webinar on The Future of Technology: AI, Innovation & Emerging Opportunities. Hussein Kanji, Founding Partner of Hoxton Ventures was our guest speaker where he talked about the next wave of innovation, including AI drug discovery, robotics, physical AI, alternative materials, datacenter development and compute, quantum technologies, and more.
https://vimeo.com/1206795475?share=copy&fl=sv&fe=ci
- Speaker & Background
Hussein Kanji is the Founder and Partner at Hoxton Ventures, a London-based early-stage VC firm focused on European technology companies. He graduated from Stanford University with an undergraduate degree in Symbolic Systems and an MBA from London Business School. During his early career, Hussein had spent time in the Silicon Valley startup ecosystem, including senior roles at Microsoft.
Hoxton Ventures is regarded as one of Europe’s most influential tech investors – most notably with early-stage investments in Deliveroo, Darktrace, Peptone and CuspAI. A decade ago, Hoxton Ventures realised that European technology firms were massively underfunded – thus representing a funding opportunity. The firm’s approach is to identify ambitious European founders early, then help them build companies with global commercial reach.
He is an active contributor to UK government technology and innovation policy. Hoxton Ventures is best known as a foundational seed investor in unicorns including Deliveroo, Darktrace and Cusp AI.
Deliveroo
Hoxton Ventures was the first institutional investor in the food delivery platform, providing seed funding that ultimately generated a >100x return for the VC firm. Deliveroo’s highly publicised initial IPO in London set the stage for subsequent tech floats in the UK.
Darktrace
Similarly, Hoxton was a seed investor in the Cambridge-based cybersecurity and AI firm Darktrace. Their early investment in the cyber company provided approximately a 40x return. Darktrace later listed on the London Stock Exchange.
Webinar Focus
- How investors can take advantage of AI technological trends
- Where investors can identify durable value across AI and frontier technology
- How technology is reshaping society and industries
- AI Beyond Consumer Technology
Q: AI is often associated with consumer technology like ChatGPT and Claude. What are some forms of AI beyond these applications?
Hussein argues that the next phase of AI value creation is likely to venture deeper into real-world applications:
- Life sciences and biology – AI has the potential the address previously untreatable diseases and plug gaps between traditional drug discovery methods
- Robotics – AI is increasingly embedded into physical objects (eg. humanoid robots), with vast implications for productivity and quality of life
- Capturing investor value in the AI economy
Q: Where can investors capture deepest value in today’s AI economy?
Hussein suggested that the deepest investor value is likely to sit in foundational model providers, relative to the thin application-layer businesses. Beyond this, he highlighted that firms solving the hard scientific and real-world problems are likely to emerge as gamechangers.
However, he also warned that many foundational models eventually become open source and commoditised as they are trained on publicly available data. Therefore, smaller models can easily replicate past editions and reap cost savings, thereby mitigating potential first-mover advantage.
Hoxton’s current investments
5.1. Peptone
Focus Area | Disordered proteins – proteins that do not have a fixed or stable structure, making them historically difficult to understand and target with traditional drugs. |
Real-world Application | Prostate cancer treatment is one such application. Peptone is attempting to target disordered protein structures linked to prostate cancer. |
Competitive Advantage | Peptone trains its AI models on proprietary biological data generated through specialised experimental processes, creating a data advantage that is hard to replicate. |
5.2 Universal Quantum
Focus Area | Building large-scale, fault-tolerant quantum computers using trapped-ion technology. One of the most mature approaches to quantum computing. |
Real-world Application | Working with Rolls Royce on a quantum computer to model more fuel-efficient aviation turbines, with broader ambitions across drug discovery, materials science, and logistics. |
Competitive Advantage | Universal Quantum’s machines execute quantum gates by applying voltages to a microchip, using electric field links between modules that are faster and more accurate than the laser-based systems used by competitors. A proprietary architecture backed by deep academic IP from the co-founders, who published the first-ever blueprint for a million-qubit trapped-ion computer in 2017. |
5.3 XYZ Reality
Focus Area | Data Centre Construction. Eliminating construction errors through engineering-grade augmented reality, overlaying millimetre-precise 3D models onto live construction sites via a purpose-built AR hard hat. |
Real-world Application | Hyperscale data centre construction, where speed and precision are critical. XYZ Reality has been deployed on more than 2.5GW of data centre projects, helping one global developer avoid 408 days of delays across seven builds and unlocking $135M in commercial impact. |
Competitive Advantage | Purpose-built hardware and proprietary software create strong switching costs once embedded in a contractor’s workflow. The real-world construction data accumulated across projects would take competitors years to replicate. |
5.4 Milvus Advanced
Focus Area | A deeptech nanoalloy producer engineering high-performance nanomaterials from earth-abundant metals to replace scarce platinum-group and other critical minerals. |
Real-world Application | Industrial and clean-tech supply chains, including catalyst coatings for hydrogen electrolysis (AEM systems), transparent conductive materials for displays and optoelectronics, and conductive materials for electronics and industrial coatings. |
Competitive Advantage | Founded by Assia Kasdi, a former Oxford University materials science researcher and European Space Agency consultant, the company pairs deep expertise in chemistry, nanomaterials, and industrial scale-up with a commercial focus on near-term deployment. Its nanoalloys are designed as drop-in substitutes requiring no system redesign, eliminating reliance on geopolitically concentrated and volatile metal supply chains. |
- Private Market AI Valuations
Q: How frothy are private market AI valuations?
Hussein acknowledged that private market AI valuations are elevated but argued that not all high valuations are unjustified. The key distinction is whether valuation is supported by real revenue growth and strong fundamentals.
- Companies with strong revenue momentum may justify premium valuations despite appearing expensive on headline metrics.
- By contrast, companies with only $1-10m of revenue but valuations of $1-5bn may be harder to justify fundamentally.
- However, an important caveat is: if AI models become increasingly open-source or commoditised, investors should apply a higher discount rate to long-term cash-flow assumptions and terminal values.
- Can Europe compete in AI and Technology?
A common perspective is that countries without their own foundational models will be structurally disadvantaged in the technology race. However, Hussein offered a contrarian point of view – as AI models eventually become open-source, the origins of the model may become less important than the potential to build valuable products around it.
- Societal Impact of AI
While Hussein was optimistic about AI’s ability to solve difficult scientific problems, he was more cautious about the broader social and labour market implications. He highlighted that AI automation is likely to impact “knowledge work” disproportionately – this includes professional services, finance, legal work and creative industries.
- Bull Scenario: Innovation, productivity gains and improved quality of life
- Bear Scenario: Lower demand for knowledge roles, weaker employment outcomes, weaker tax revenue base, thus mounting pressure on how governments will manage this labour market transition.
- Final Advice: Skills to stay relevant
Q: What skills should the kids of today and young professionals focus on to ensure that they remain employable and don’t get left behind as AI progresses?
- Build strong foundations in maths and science to formulate a basic understanding of AI systems
- Learning by doing: Use AI tools actively rather than simply reading about them
- Develop a self-starting mindset: experiment, fail, iterate and build intuition through hands-on use
About VAR Capital:
VAR Capital is an independent financial services firm offering asset management, lending and family office services. It was founded by individuals with extensive experience from Banking, Asset Management and Family Offices. Based in Mayfair, London, VAR Capital Ltd is authorised and regulated by the Financial Conduct Authority (FCA).
Source: VAR Capital
Media Contact: Vikash Gupta, [email protected]
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