Flourish Ventures, an early-stage venture firm that invests exclusively in fintech companies in the US and emerging markets, has raised $350 million in fresh capital, TechCrunch is the first to report.
The new increase brings the four-year-old company’s total assets under management to $850 million.
Unlike traditional risk teams, To flourish It is an evergreen company, meaning your investment is indefinite or has no fixed end date. He has a single LP in the philanthropic investment firm Omidyar Network (run by eBay founder Pierre Omidyar), from which it separated in 2019. Flourish’s investment thesis is to not only back companies that have the potential to provide a commercial return, but also those it believes can “create systemic change” and help to “build a fairer financial system.” system.”
“Since our capital is permanent, we are more flexible and we are not subject to the same pressures of other funds that have to be deployed or exited in a certain period of time,” he said Tilman Ehrbeck, Global Managing Partner and co-founder. “We think that gives us a comparative advantage.”
The firm also aims to back companies that “demonstrate that new or better ways of doing business are viable and, through that successful demonstration, influence for the better the performance of the entire (financial) sector… So we are a fund of fintech risk with a purpose,” Ehrbeck said.
Flourish, headquartered in Redwood City, California, has backed 71 startups across five continents since its inception, with about half of them The fund’s capital has been deployed in the US. Notable investments include the digital bank Chime, valued at $25 billion in its latest financing round; Brazilian neobank Neon, whose last price was $1.6 billion; the Integrated Finance Commissioning Unit, which was last valued at $1.2 billion; and African payments infrastructure company Flutterwave, last valued at more than $3 billion.
“In all of these deals we were the initial or Series A investor,” said the managing partner and co-founder. Arjuna Costa.
The company’s notable exits include the IPO of Grab Financial via SPAC, the sale of Ruma to GoJek, the sale of SeedFi to Intuit, and the sale of United Income to Capital One.
Strategy
As part of its mission to create systemic change, Flourish partners with policymakers, regulators, industry leaders and ecosystem players such as the Alliance for Innovative Regulation (AIR), Financial Health Network (FHN) and Consumer Reports.
Flourish’s managing and founding partners (and their focus regions) include Ehrbeck (India and Southeast Asia), Emmalyn Shaw (USA) and Costa (emerging markets such as Latin America and Africa).
A portion of the company’s new capital will be reserved for later investments, Shaw said. On average, Flourish’s first revenue to a company ranges from $2 million to $7 million, and it makes six to 10 new investments per year.
“We can downsize or flex,” he told TechCrunch. “We try to lead or co-lead investments where appropriate and take active roles on the board of directors.”
Looking ahead, Shaw said Flourish continues to lead the infrastructure and looks to support “next-generation” companies in the B2B payments and SaaS vertical spaces that are “integrating finance deeper into the stack.”
“We also continue to look very deeply at transforming poor legacy infrastructure,” he said. “We know it’s a really difficult and deep-rooted problem, but we really believe it involves massive system-level change.”
The firm is also looking at data analytics in banking, insurance payments and loan identity.
Flourish also claims to promote a “diverse” team that is majority female and non-white.
“We’re trying to be equally deliberate on the investment side,” Ehrbeck said, although he acknowledged that it’s difficult to define diversity when talking about startups from different parts of the world, because what might be considered diverse in one country would not be in other.
“In the United States there is a certain set of considerations, whereas in India it has much more to do with caste and origins, for example,” he added.
However, as a fact, Shaw points out that in the company’s last four new agreements, all have female co-founders.
In the context of the broader investment landscape, the capital raising is certainly good news for fintech startups, which have raised much less capital in recent quarters compared to the peak of 2020 and 2021.
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