- Flourish Ventures co-founders Tilman Ehrbeck, Emmalyn Shaw, and Arjuna Costa discuss their evolving investment strategies and trends.
- The firm is seeing an increase in repeat entrepreneurs within its portfolio, particularly in emerging markets like Indonesia, India, Brazil, and Mexico.
- Flourish Ventures is cautious about investing in standalone AI fintech companies, preferring AI as an integrated component rather than a primary focus.
- There is a noticeable uptick in M&A activity, with expectations for more mergers and acquisitions and an impending IPO window for fintech companies.
- A recent $350 million fundraise in October 2023 brought the total assets under management to $850 million.
- Critical investments include digital bank Chime, Brazilian neobank Neon, embedded finance startup Unit, and African payments firm Flutterwave.
Main AI News:
In one of the recent editions of Equity, TechCrunch’s podcast, host Mary Ann Azevedo converses with Tilman Ehrbeck, Emmalyn Shaw, and Arjuna Costa, the visionary founders of Flourish Ventures. They delve into various subjects, such as how their investment strategies have transformed over the last five years and which emerging trends excite them the most. The conversation also touches upon mergers and acquisitions in fintech, the role of artificial intelligence, and the importance of founder wellbeing. Established in 2019, Flourish Ventures now oversees $850 million in assets, with a notable $350 million fund raised in October 2023. The firm’s global investment footprint targets fintech innovations in the U.S., Africa, Asia, and Latin America. Their portfolio includes digital bank Chime, the $1.6 billion-valued Brazilian neobank Neon, the embedded finance startup Unit, and the African payments infrastructure leader Flutterwave. An intriguing observation from their investments is the rise of repeat founders within emerging markets.
“One thing we’re seeing that’s really heartening is we’re backing entrepreneurs for the second time within our own portfolio,” Costa mentioned. “That maturity of founders and the level of thought diligence they bring to the second time around journey is really impressive to see. We’ve expected that in Silicon Valley and New York for a long time but to start to see that happen in markets like Indonesia, India, Brazil and Mexico is, is very heartening.”
Instead of jumping on the AI bandwagon, the team approaches the space thoughtfully.
“I would be surprised if we would bet and pick and seek a company that’s specifically AI fintech on its own accord as a standalone opportunity,” Shaw said. “It would have to be something they’d embed in as a core part of their offering to help streamline certain processes.”
Conclusion:
Flourish Ventures’ focus on repeat entrepreneurs in emerging markets highlights a maturation in global fintech ecosystems beyond traditional hubs like Silicon Valley and New York. Their cautious approach to AI investments underscores a strategic preference for integrated solutions that offer clear defensibility. The increasing M&A activity, coupled with anticipation of an IPO window, suggests a robust and evolving fintech landscape with significant opportunities for growth and consolidation. This strategic positioning by Flourish Ventures reflects a nuanced understanding of market dynamics and future potential within the fintech sector.
