Finch Capital has closed on its third fintech venture fund, raising €150 million to acquire significant minority stakes in scale up companies with €2-5M in revenues.
Since its inception in 2013, the firm has made a total of 40 investments across Europe and Asia with a current portfolio that includes a range of companies spanning fintech, regtech and insurtech, and includes Trussle, Fourthline, Grab, Hiber, BUX, Twisto, and Zopa.
As with its previous funds, Finch plans to back 15-20 European startups, targeting liquidity 3-5 years post investment, over the fund’s three year initial investment lifespan. As active investors, Finch seeks 20-49% ownership in its portfolio companies.
Radboud Vlaar, MD Finch Capital, says: “We have always been bullish on investing in Financial Technology. Moving forward, we are doubling down on financial software, especially those companies that leverage AI to this end. We have seen the industry mature, giving rise now to a rich but fragmented landscape of robust businesses with €2-5 million in revenues. These are the companies we are focused on working with now. With the right support and management they have great risk/return outcomes and they are ready to build leading positions and consolidate the European market.”
In 2020 the firm launched Flowrence, a machine learning AI tool, to support its deal flow and sourcing. Vlaar says that over the last six months, 20% of the firm’s shortlisted deals were sourced by Flowrence, especially helpful during a period of limited travel and in person meet ups.
The company is also raising funding for a $50 million war chest dedicated to South East Asian markets, winning support from Arise (Part of MDI) and a leading South East Asian Bank.