The FinTech wave… all about timing.

I already said in a previous post – here – that the main reason for me to move on from my beloved Innotribe was – basically – my failure in trying to move thinks towards a more self-funded, independent, proactive and financially relevant setting and as many things in life you have to acknowledge when time is right and when is not.

I think we can proudly say that the Innotribe Startup challenge was the first global FINTECH startup Eco-system (I promise, I’ll stop using this word but you can put it on my poor English).

Think of it :
Transferwise, reported to raise now 50M USD on a close to a Billion valuation,
– TrueAxis, sold to Mastercard for some 85M USD (could be 65 but can t bother to check now, it does not really matter for this discussion),
Guardtime,
– Azimo, recently funded with a good 10M USD series A round,
– MatchMove, recently announcing their 10 M series A round,
– Digital Shadows, also raising recently series A.
The list – believe me – goes on and on.
Many of these guys are already in series B/C and I reckon have a good chance to exit (for us now, the game is to find the ones with the same appeal but at an early enough stage to make the investment compelling).

SWIFT turnover is, today, roughly 700M EUR.

If you take the Fintech Startup Bootcamp model, startups give up 8% of their equity to participate in a 4 months accelerator program, culminating with Demoday (that took place last week  in London, kudos to the team and to the 10 startups,or was really a cool event). They give 8% TODAY and the market is way more tougher and mature than 5 years ago.
They do it not for the (little) money Bootcamp is giving them, but more importantly for the mentoring, the coaching, the connection, and the strategic help they are getting.

Innotribe and SWIFT could have put on the top of all this the best possible financial institutions sales network that a Fintech startup could have dreamt of. And – believe me I was there – many finalists of the startup challenge, including some of the ones I mentioned earlier, were exactly at the same stage of the Bootcamp ones, especially in the early stage category.

What am I trying to say ?
Very simple : roughly a third (conservative) of today SWIFT annual turnover is the potential value of what Innotribe could have been worth if the opportunity to create a community investment vehicle would have been set.
Then, the “Innotribe Venture Fund” could have take either some single digit with no cash or even some warrants to be exercised, these are details for the sake of the discussion. The rest is math.
But that was then.
Back then, the opportunity to use the SWIFT leverage to foster start-ups growth was a unique opportunity for a financial return (and the objective of developing Innotribe at industry scale).

Today would be too late for the “mentoring versus equity” thing. Because the market is too crowded already. At least the one for generic Fintech startups.

How do I see it evolving ?
There is still room for series A/B round Fintech funds and for Fintech vertical opportunities, my favourite one being Financial Inclusion.

Conclusion…
It’s all about timing and we are at the beginning of the second Fintech wave.
The one Billion dollar question is : how many waves we will see?

 

Stay Tuned

Matteo

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