The Rise of Venture Capital Investment in FinTech

The Rise of Venture Capital Investment in FinTech

05-Oct-2018 by Triin Linamagi

Over the last two years we’ve seen the largest jump in FinTech funding in Europe, with growth in excess of 120%. This includes a sharp upturn in corporate investment in later-stage FinTechs (nearly 50% of total deals) alongside increased  interest by VC Funds in the FinTech space. Since launching SBC Colab we’ve worked closely with our investor community and corporates to help identify mature FinTechs capable of solving real business problems at scale.

We’ve spoken with Alix Brunet from Finch Capital, an early stage venture fund specialising in Fintech, with investments across Europe and South East Asia, and Conor Scanlan from Frog Capital, a growth venture fund investing in scaleups across Europe, delving into their thoughts on FinTech trends, which business models pique their interest and how SBC Colab can provide them with a better deal flow.

What are your thoughts on SBC Colab model?

Conor Scanlan, Frog Capital:

FinTech is a notoriously difficult sector to succeed in, particularly for startups. Colab has put together a great programme that unites many of the key actors in the ecosystem that otherwise may not have met. By focusing each cohort on a specific sub-sector in FinTech, it allows both the startups and investors to interact with experts in their fields.

Alix Brunet, Finch Capital:

We find SBC Colab’s innovation programme extremely valuable for startups, investors and financial institutions and corporations. SBC Colab’s concept is unique by its FinTech focus, collaborative approach and positioning in the ecosystem. As both FinTech entrepreneurs and senior managers are having difficulties identifying and engaging with the right partners, SBC Colab leverages its industry experience and network to connect and support decision makers.

What benefit have you found through collaborating with SBC Colab?

Conor Scanlan, Frog Capital:

Colab gives Frog a chance to meet with some of the most impressive FinTech companies in Europe. It also enables us to interact with experts and large scale financial institutions that we wouldn’t have otherwise.

Alix Brunet, Finch Capital: 

Our collaboration with Colab through meetings and events with entrepreneurs, industry leaders and partners, is invaluable as it gives us access to the latest industry trends and brings together sector experts. Colab allows us to engage with selected start-ups and financial institutions on relevant topics and provides a platform promoting collaboration between Fintech ecosystem players. Through the programme we’ve identified entrepreneurs who we are interested in working with.

You’ve met some Colab companies now, what are your thoughts on the level of the FinTech companies you have met? And what’s the value for you in meeting our corporate partners?

Conor Scanlan, Frog Capital:

The level of companies we have met through Colab has generally been very strong. There has been a mix of very early stage businesses with their first PoC’s to more developed businesses generating millions in revenue. Meeting with Tier 1 banks is invaluable for us. It gives us an insight into the strategic direction that they’re looking and enables us to make better informed investment decisions.

Alix Brunet, Finch Capital:

I met Colab entrepreneurs and was impressed by the quality of the start-ups participating in the partnership programme. While representing different FinTech verticals, businesses are at the forefront of their field and are selected based on corporate partners’ needs. Interacting with financial institutions and corporate partners is interesting as it allows us to exchange industry views and assess key issues and challenges, on which we base our investment focus. We believe that collaboration between Fintech entrepreneurs and incumbents is essential to the development of the financial services industry, and we engage with initiatives such as Colab to accelerate innovation.

Where is FinTech funding heading, what are the key trends you are looking into?

Conor Scanlan, Frog Capital:

The majority of FinTech funding will likely continue to flow into the challenger banks in the near future as they seek to establish or maintain market leadership. In Fintech, we’re looking for businesses that are able to leverage data in unique and exciting ways – and at the same time, combine that with a scalable and sustainable business model… not the easiest of asks!

Alix Brunet, Finch Capital:

2018 is a year of continued growth for businesses in the Fintech vertical. We expect the UK and Europe to continue leading transactions in the sector, driven by the continued development of specialised hubs focused on specific segments. In South East Asia, we are observing the diversification of Fintech offerings, supported by favourable regulators. In terms of sector trends, we identify key themes for each geography and are particularly interested in B2B2C business models, which promote scalability, and AI-driven software solutions targeting SMEs and enterprise clients. We anticipate further automation and increased data analytics in insurance, disintermediation in the property sector, and see a strong appetite for solutions simplifying and securing financial services infrastructure.

If you want to know more about SBC Colab contact us on colabfintech@startupbootcamp.org and find out more on our website

If you want to find out more about Frog Capital visit their website and to find out more about Finch Capital visit their website