Fiat Ventures, with $25M for first fund, provides ‘insider’ approach to investing in early-stage fintechs • TechCrunch

Fiat Ventures general partners Drew Glover and Alex Harris, along with managing partner Marcos Fernandez, seek and invest in the next generation of fintech startups, and are leveraging their unconventional backgrounds to find equally unconventional founders.

The early-stage venture capital firm that started in 2021 is now armed with $25 million in capital commitments to close its first fund; The partners target financial services and fintech start-ups for the 90% of Americans who don’t already have enough savings or don’t know how to start managing what they do have.

And they don’t just want to invest capital. The firm has taken a unique approach to the way it works with its companies, initially as a marketing and strategic partnership. This happened when the partners founded Fiat. They didn’t have capital to invest right away, so they asked the founders for advisory shares and the right to eventually invest, Glover said.

As such, Fiat focuses on percentage ownership, taking around 2% to 2.5% in companies the company invests in, Glover told TechCrunch. That might look like a $100,000 to $500,000 check with funds available to double and triple some of your most successful companies.

That initial focus became half of a business with partnerships, like affiliates, strategic, and influencers, and the other half is all about performance and growth.

“Think of us basically as a turnkey fractional CMO where we can come in and help with strategy and execution,” Glover added. “Don’t hire a $400,000 a year CMO, but let us come in with our team of former VPs and CMOs and work with you to build your ecosystem for growth.”

Fernández told TechCrunch that he believes this approach is one of Fiat’s “biggest strengths and advantages,” and something typical VC firms hire an operational team to do when they hit their third, fourth, or fifth fund, not the first fund as Fiat has done. been able to do.

Partners have formed this type of relationship with over 100 companies to date, working with them for a minimum of three months. In 2021, when they established a more formal venture business, they say it gave them a unique view of the companies — the good, the bad and the ugly — helping them identify where to best deploy capital, Harris said.

“Two of the three of our investments have been from these relationships,” added Fernández. “It has given us additional due diligence to see if they have a product that is right for the market and to see the dynamics of the founders, for example, if they can raise funds, hire and know where their gaps are. You can’t get that when receiving calls or data rooms.”

Investors in the new fund include Invesco Private Capital, which anchored the fund, DAHG Capital Partners, Joint Effects LLC, Full Spectrum Capital, Temerity Capital Partners, Now Investments, Mountaineer Capital, Permit Ventures and a host of fintech founders, including Jonathan Abelmann of Bestow. , Chime’s Kyle Daley and Mulberry’s Chinedu Eleanya.

Some notable investments among the 22 companies in Fiat’s portfolio so far include teen banking app Copper, which raised $29 million in April; the insurance company Breeze, which got $10 million last year; and Sleek, a one-click payment company that raised $1.7 million earlier this year.

Furthermore, Fiat’s own team comes from diverse backgrounds, and the partners said it was equally important to show that in the companies they invest in as well. Sixty-seven percent of the investments are in underrepresented founders, 30% are female founders, and 40% are minority-led.

“It really comes down to our background and that’s what we appreciate the most,” Glover said. “Marcos is Hispanic American, I am African American and Alex is 100% our people and also Jewish.”

He went on to describe how he grew up in East Oakland exposed to all forms of socioeconomic class and with parents who were deeply entrenched in civic action. Meanwhile, Marcus grew up in Texas and in a similar environment, while Alex grew up in Stockton.

“We all grew up with this mindset of investing in the best ideas that have the biggest impact,” added Glover. “The networks we grew up in spawned other networks and give us access to see some of the best underrepresented founders and ideas that are making the biggest impact.”

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