Flourish Ventures, a “fintech venture fund with a purpose,” secures $350 million in new capital

Image credits: Thriving Businesses

Thriving Businessesan early-stage venture capital firm that invests exclusively in financial technology companies in the United States and emerging markets, has secured $350 million in new 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 outfits, to bloom is an evergreen business, meaning its investment is open-ended or has no fixed end date. He has only one LP in the philanthropic investment company Omidyar Network (led by eBay founder Pierre Omidyar) — from which it originated in 2019. Flourish’s investment thesis is to support not only companies that have the potential to provide commercial return, but also those that it believes can “create systemic change” and help “build a fairer financial system”. system.”

“Since our capital is permanent, we are more flexible and are not subject to the same pressures as other funds which must deploy or exit within a certain time frame,” said Tilman Ehrbeck, Global Managing Partner and co-founder. “We think that gives us a comparative advantage.”

The company also aims to support companies that “demonstrate that new or better ways of doing business are feasible and, via this successful demonstration, influence for the better the performance of the entire (financial) industry… We are therefore a fintech venture capital fund with a purpose,” Ehrbeck said.

Flourish, based in Redwood City, California, has supported 71 startups on five continents since its founding, with approximately half of the the capital of the fund having been deployed in the United States Notable investments include digital banking Carillon, which was valued at $25 billion in its last funding round; Brazilian neobank Neon, whose last price was $1.6 billion; Integrated finance startup unit, which was last valued at $1.2 billion; and African payments infrastructure company Flutterwave, which was last valued at over $3 billion.

“In all of these deals, we were either the seed investor or the Series A investor,” said the managing partner and co-founder. Arjuna Costa.

The company’s notable exits include Grab Financial’s IPO via SPAC, Ruma’s sale to GoJek, SeedFi’s sale to Intuit, and United Income’s sale 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), the Financial Health Network (FHN), and Consumer Reports.

Flourish’s managing and founding partners (and their target regions) include Ehrbeck (India and Southeast Asia), Emmalyn Shaw (US) and Costa (emerging markets like Latin America and Africa).

Some of the company’s new capital will be reserved for further investments, Shaw said. On average, Flourish’s first checks into a company range from $2 million to $7 million, and the company makes about six to 10 new investments per year.

“We can scale down or be more flexible,” she told TechCrunch. “We try to lead or co-lead investments where appropriate and play an active role on the board. »

Looking ahead, Shaw said Flourish continues to play a leadership role in infrastructure and seeks to support “next generation” companies in B2B payments and vertical SaaS spaces that “integrate finance more deeply into the battery “.

“We also continue to look very carefully at transforming existing infrastructure that is in poor condition,” she said. “We know this is a very difficult and deep-rooted problem, but we really think it will require massive system-level change.”

The company is also exploring data analytics in banking, insurance payments and lender identity.

Flourish also claims to tout a “diverse” team that is predominantly female and non-white.

“We try to be just as thoughtful on the investment side,” Ehrbeck said, while acknowledging that it’s difficult to define diversity when talking about startups from different parts of the world, because what might be considered as diverse in one country not in another.

“In the United States there is a certain set of considerations, whereas in India it has much more to do with caste and origin, for example,” he added.

However, as a data point, Shaw points out that in the company’s last four new deals, all have been female co-founders.

In the context of a broader investment landscape, the capital increase is undoubtedly good news for fintech startups, which have raised significantly less capital in recent quarters compared to the good years of 2020 and 2021.

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