Finch Capital closes £132M fintech fund to invest in Series A and B

Today, London and Amsterdam based early-stage fintech VC Finch Capital announced the first close of its €150M (nearly £132M) fund, Europe III, which will invest in European technology companies shaping the future of finance by using technology such as artificial intelligence (AI).

With the new larger European fund, Finch Capital will invest EUR 2-10M at Series A and B stages, acquiring significant minority stakes in scale up companies with EUR 2-5M in revenues: a segment currently underserved by the European VC and Growth market that is facing a funding gap. 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.

Radboud Vlaar, MD Finch Capital, said: “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 EUR 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.”

Europe III saw a near 90% follow on investment from previous funds. Since its inception in 2013, the firm has made a total of 40 investments across Europe and Asia and its assets now total $400M (nearly £290.5M).

Finch’s Fund II invested in both SE Asian and European startups. Both Fund I (EUR40M (nearly £35M), 2014 Vintage) and Fund II (EUR110M (nearly £97M), 2017 Vintage) are generating top quartile returns. The current portfolio includes a range of successful companies spanning Fintech, Regtech and Insurtech, and includes Trussle, Fourthline, Goodlord (which acquired Vouch), Grab, Hiber, BUX, Twisto, and Zopa; exits include Salviol and Cermati, with two exits in process.

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