In today’s episode of Equity Podcast, Mary Ann Azevedo talked to Flourish Ventures co-founders Tilman Ehrbeck, Emmalyn Shaw and Arjuna Costa about a variety of topics, including how their investment themes have evolved in the past five years and what trends they’re most excited about. We also got their opinion on M&A deals in fintech, AI and founder wellness, among other things.
The trio founded Flourish Ventures in 2019 and now the firm has $850 million under management, last raising a $350 million fund in October 2023. Flourish invests all over the world, backing fintech startups in the U.S., and across Africa, Asia and Latin America. Notable investments include digital bank Chime , Brazilian neobank Neon , which was last priced at $1.6 billion; embedded finance startup Unit and African payments infrastructure company Flutterwave.
As investors in emerging markets, the firm has noticed an interesting phenomenon: repeat founders.
“One thing we’re seeing that’s really heartening is we’re backing entrepreneurs for the second time within our own portfolio,” Costa said. “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.”
One thing the team is not doing is jumping on the AI bandwagon. They are approaching 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.”
She added: “In fact, the more it’s relying on AI, the more you’d have to ask yourself, what is your defensibility then?”
On the M&A front, Shaw acknowledged that activity has been picking up.
“The expectation is that as this activity continues, we’re going to start to see a lot more M&A activity in conjunction with what we hope to be IPO window opening for fintech as well,” she said.
Listen to the full podcast for more valuable insights.
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