Finch Capital, formerly known as Orange Grove Capital, is one of the only venture capital firms in the world focussing on fintech in Europe and South East Asia. The firm’s partner COO and head of investor relations, Annette Wilson, speaks to GrowthBusiness on what makes the firm unique, and growth plans as it rebrands.
From its offices in Amsterdam, London and Singapore, Finch Capital invests in innovative technology companies that are driving the transformation of the financial services industry. Its portfolio companies are solving problems associated with legacy financial services systems and innovating to increase revenue, reduce costs and improving customer interactions.
“Very often people think fintech is narrow, but it’s a huge sector. Financial services makes up 30 per cent of the GDP in Europe. Highly sophisticated businesses operate in it. Businesses are innovating useful technologies that either enhance the offerings of banks or insurance companies, or disrupt these institutions with totally new approach. We invest in both sides of that coin,” Wilson says.
Most recently, the fintech venture capital firm announced that it has led the Series A investments for two companies: an investment in Ayopop, an Indonesian mobile bill payment platform and a €2 million investment in Ikbenfrits, a digital mortgage broker based in the Netherlands. Finch Capital will join both companies’ boards.
Finch Capital is specifically interested in Indonesia as it is predicted to be the world’s 4th largest economy by 2050.
Finch Capital’s key differentiating factor is its focus on early-stage investing in fintech and South East Asia. “In that part of the world, we usually find country-focussed investors. As an international group, we bring unique insight,” Wilson adds. “In Europe, we work in a very well established financial services sector. Financial services groups are keen to access innovation. In South East Asia, we see a large underserved population who may not have relationships with banks. New providers are accessing this population through digital and mobile solutions.”
This is where Wilson sees significant growth. “We look at various verticals, and its easy to put a grid together within fintech, from marketplaces to payment platforms and interbank markets. We’re very collaborative with big groups, because our current portfolio will eventually sell to these companies as they grow. It’s huge opportunity for fintechs, but also for existing incumbents (big banks et cetera) that are really keen to access that innovation, with proactive strategic innovation teams always on the lookout for solutions.”
Finch Capital has 18 businesses in its portfolio to date, with seven in 2017.
According to Wilson, there are three main things the firm looks for when backing fintech companies.
1. The innovation (product or service). “Does it solve a problem? Everyone has bright ideas, but are they actually addressing a problem?”
2. Quality of the team. “We spend a lot of time looking at teams at the head of these companies, and whether they can grow the business to a valuation of $100 million.”
3. The founder. “Does the founder have the vision and understand the challenges ahead of them?”
“These are basic things we look at, but they are very important,” Wilson says. “We work very closely with our portfolio companies. We don’t just provide capital. We typically go on their boards, help them go to market, often open doors for them, help them build their team at each stage of growth, and we absolutely like to follow on with further investment. We even help them further funding and making those connections.”
Finch Capital’s recent investments include: UK digital mortgage broker, Trussle; Dutch insurance platform, Digital Insurance Group; Switzerland-based customer insight software company, Squirro; Spanish security policy automation company, Intelliment; and Indonesian digital financial services provider, Cermati.