Hussein Kanji, one of Hoxton’s founding partners, told Fortune that the larger fund was necessary because the valuations of European tech companies has been rising, meaning that the venture firm needs more capital to acquire meaningful stakes in the startups it backs and to prevent these stakes being diluted down to nothing in subsequent funding rounds for those companies.

“The cost of running an early stage fund has gotten more expensive and the bar has gotten much higher,” Kanji said.

But, he also said, that the fund size was a function of investor demand: Hoxton, he says, initially set out to raise just $150 million for the new fund, but found that so many investors wanted in that it had to increase that cap, first to $200 million, and then, with approval from those investors already committed, to $215 million.

Hoxton’s outsized new seed stage fund is just the latest symptom of growing interest of venture investors globally in European tech startups. This is especially true for American venture capital firms and asset managers. Once dismissive of the notion that Europe could ever create fast-growing tech companies that could rival those birthed in Silicon Valley, the recent success of a number of European technology businesses, from Spotify to fintech like Klarna and Revolut to enterprise software businesses like UiPath, have changed that view. In the past year, a number of prominent Silicon Valley venture firms have opened offices in the U.K., including Sequoia and Andreesen Horowitz, while a number of others such as Lightspeed Ventures, General Catalyst, and Bessemer Ventures have all hired at least one European partner or relocated a partner from the U.S. to Europe to hunt for deals.

Investors in Hoxton’s new fund are predominantly institutions, including American pension funds and university endowments, and a number of large European asset managers, including a European private bank, a European pension fund manager, and the endowment of a prominent wealthy European family. Kanji declined to identify the investors specifically, citing confidentiality agreements with them. The government-funded British Business Bank is an investor in Hoxton’s funds, according to the website of British Patient Capital (BPC), the £2.5 billion ($3.3 billion) investment pool that the bank that has allocated to fund to U.K.-based venture capital firms.

Kanji says that there are more European institutions participating in the new fund than in any of Hoxton’s earlier funds and that there is also less government money—coming from the British Business Bank—than in the firm’s earlier investment pools.

Hoxton also announced that Charles Seely, a veteran Silicon Valley venture capitalist, is joining Hoxton as its fourth partner and is relocating to London.

Kanji said that Hoxton’s returns from its existing funds have been among the best in Europe, with the firm’s return on Deliveroo alone providing a 100% return on the entire value of Hoxton’s first fund. The firm has already distributed those profits to its investors, but it continues to hold a substantial position in Darktrace, so that first fund’s total returns have not yet been determined. “A terrible scenario would be a 5x fund and great scenario would be 10x to 15x fund,” Kanji said. He noted that at one point Darktrace’s stock was doing so well, the number was close to 15x, but that its shares have since halved in value.

Hoxton has made 63 investments to date, with 19 from the new fund. Four investments are currently worth over a billion dollars, according to the firm.

Kanji said Hoxton’s general approach was to invest in companies at seed stage, when they are often still trying to work out their business models and how their product will fit into a marketplace. This is often before the startups have any revenue. Hoxton is often the first outside money aside from angel funding that these startups receive.

The firm aims to investment between $500,000 and $5 million to acquire between 10% and 15% stakes in the startup. It wants to build a portfolio of 20 to 25 companies for each of its funds. That translates to a maximum of $100 million committed to these seed rounds. The remaining $100 million in Hoxton’s new fund will be used for “follow-on” investing—subsequent funding rounds in which the firm must increase the amount of money it is putting in in order to prevent its ownership percentage from dwindling too significantly, he said.

Hoxton invests in many different technology areas, Kanji said. It also looks at startups coming from anywhere in Europe, with a third of its current portfolio having been founded in Eastern Europe. But in each case, Kanji said, Hoxton is looking for businesses that want to take on the American market.

“Our goal is to be the first and best partner for European founders who have the ambition to scale into America,” Hoxton’s new partner Seely said in a statement. “I spent most of my life building and investing in companies at a seed stage, and look forward to using my connections in the U.S. to help our portfolio expand outside of the European market.”