FinTech Collective launches dedicated Digital Assets Strategy

By Edlyn Cardoza

FinTech Collective, a venture capital firm focused on creating the future of financial services by investing across traditional FinTech and emerging digital assets, recently announced fundraises for its existing early-stage strategy and for its new strategy focused on decentralized finance (DeFi). FinTech Collective raised a combined $250 million in capital across the two strategies, bringing the firm’s total assets under management (AUM) to over $500 million.

FinTech Collective backs entrepreneurs rewiring how money moves through the world and invests thematically and across capital markets, wealth and asset management, banking-lending-payments, and insurance.

The firm raised $200 million to focus on early-stage investments as well as $50 million focused on open-source, composable financial protocols and applications being built on smart-contracting platforms such as Ethereum. The DeFi strategy will invest across the breadth of opportunities emerging in the decentralized finance space – including both equity and liquid tokens.

In FinTech Collective’s current portfolios, 20% of the investments are blockchain and DeFi, including five FinTech unicorns, which are valued at more than a billion dollars. The firm’s “hit rate” (companies that are still active) currently stands at 96%, which is notable for the fact that two-thirds of those initial investments were into pre-revenue companies.

Brooks Gibbins, Managing Partners at FinTech, said, “FinTech Collective was among the first venture capital firms to recognize the FinTech opportunity resulting from the global financial crisis, which served as a catalyst to unlock a generation of innovation in financial services. We believe the next 30 years represent an unprecedented period when every facet of financial services will be deconstructed and reconstructed, and our deep global roots, particularly in the New York and European ecosystems, allows us to take advantage of this tremendous opportunity.”

“We partner with exceptional entrepreneurs by providing deep FinTech and operating expertise and capital to those who share our vision for reshaping the future of the markets,” Gareth Jones, Managing Partner at FinTech Collective said. “As one of the few truly global FinTech investors, we see massive opportunities taking shape over the next decade, including the continued development of the digital assets landscape, where a new monetary system, method of transaction, and digital store of value is being established. We anticipate the convergence of traditional finance and DeFi, which is a particularly exciting space for us right now.”

The COVID-19 pandemic has served as a catalyst for the acceleration of such market opportunities as major FinTech firms have almost doubled their market value in the past year alone. Just looking at consumer adoption, mobile-banking traffic has risen 85% and online-banking registrations climbed 200% over the last twelve months. Despite the phenomenal growth, there is still so much room to run with conventional banks still representing 72% of the global banking and payments industry’s total market value.

To take advantage of this accelerating, secular shift, FinTech Collective will focus on three key themes: the accelerating shift to digital in traditional finance, the rise of the next several billion consumers into a spending middle class in emerging markets, and the scaling of the digital assets ecosystem.