What is the attitude of VCs towards fintech today and how is it possible for a startup to attract the attention of top investors? We asked Paolo Gesess, Co-Founder and Managing Partner at United Ventures who has given a mentorship session with the startups of our community on this very topic.

Fundraising for fintech: what are the specificities of this sector?

I wouldn’t say that fundraising for fintech has specific sector-related peculiarities. The differences are mostly related to the business model: in the case of a B2C model, the company will need to be funded for several years, with a considerable capital injection, as the cost of customer acquisition is high and the process is slow. On the other side a B2B model, such as an enterprise software, is streamlined, faster and easier to invest in. Marketing costs are much lower, and so are the funding needs.

Fundraising in Italy: has the situation improved in recent years compared to other countries?

The situation has certainly improved in recent years: new operators have appeared and, more generally, several measures have developed the venture capital market in Italy, and consequently facilitated the fundraising activity of startups. What I recommend to the target companies, in any case, is not to stop at Italian investors, but to open up to investors from other European countries. United Ventures is an European focused VC with a global portfolio, and partnering with many international VCs we can tell that the European tech investing community is getting more and more interested in the Italian startup scenario.

What is the actual attitude of VCs towards fintech?

The fintech sector has exploded in the last few years, but it remains very attractive to investors. The disruption of financial services is ongoing and this process will continue for many more years. In this regard, it is important to remember that the time horizon for venture capital is around 10 years: experience has taught us that disruption takes time. With regard to our portfolio, Moneyfarm is a great example of a long-term investment, able to create enduring, transformative value along the years. We first backed the company in 2012, when the concept of fintech was not as widely popular as today, and a few days ago we celebrated its agreement with Poste Italiane, launching the largest API-based digital wealth management partnership in Europe.

Do’s and Don’ts for a young reality to attract the attention of the VCs?

First of all, to draw the attention of a VC, you need to be very focused on the problem you want to solve and very clear on the solution that you propose. Do (well) one thing and not one hundred. Another crucial point is the coherence between the financial requirements and the stage of development. Founders need to have clear ideas about their financing needs and long-term growth plans. Finally, they must have a perfect understanding of the competitive landscape at European level and, in a regulated landscape such as that of financial services, of the relevant European legislation.

From your point of view, can a structure like Fintech District have a positive impact on the growth of fintech companies?

Certainly, the Fintech District can contribute to the growth of fintech in Italy. As a facilitator of relations between the various subjects of the ecosystem, it can play a role in helping founders and their teams to build a valuable network of professionals with which to deal on different issues. Education and training are extremely important: very often for fintech companies is difficult to recruit profiles that combine the knowledge of financial issues with specific technical and IT skills. The mentorship program itself – of which I am very happy to be part – is an important tile of this knowledge sharing process. Talent and capital go together: they are both crucial for a company to grow internationally and make a meaningful impact.

Discover our mentorship program. If you join our community, you can participate for free!

At the end of September we hosted BlackFin Tech who met some startups from our community at our headquarter in via Sassetti. In the interview, Julien Creuzé and Michele Foradori (BlackFin Capital Partners), talk about what struck them and why the Italian fintech ecosystem is interesting.

What is BlackFin Tech and what does it do?

BlackFin Tech is the fintech-insurtech VC fund of BlackFin Capital Partners, an independent investment firm, established in 2009 and run by 5 partners: Laurent Bouyoux, Eric May, Bruno Rostain, Paul Mizrahi and Sabine Mathis. The core mission of BlackFin Tech is to support bold entrepreneurs aiming at shaping the new financial ecosystem. With a commitment from its LPs of over €180M, BlackFin targets European best-in-class ventures supporting their growth with a sound expertise in the financial and insurance sectors as well as a wide-ranging network across all major European Financial Institutions.

What motivated you to become a partner of the Fintech District and what do you expect from this agreement?

Blackfin’s DNA is that of a European fund and, among all the countries, Italy is one of those we want to follow in the front line. An initiative like that of the Fintech District is a sort of lens on the Italian fintech ecosystem that allows funds such as ours to create quick connections with the national business fabric. What do we expect from the Fintech District? We would like to be able to consider it as the key partner for making ourselves known in the market and at the same time a catalyst that supports us in creating a solid network with the main Italian investors, be they VC or business angels.

What are the most interesting markets for you today?

So far, we have focused mainly on France, Germany, Benelux and Holland. Our goal is to open up to all European markets. Specifically Italy, Spain, Portugal, Switzerland, UK and Scandinavia

Why is the Italian fintech market particularly interesting for you?

Having not yet reached a level of maturity ‘like other European countries, the Italian market has, in our opinion, excellent potential for development and growth. Some Italian fintechs have already had great resonance at European level, attracting the attention of numerous investors and proving to be players who can compete at a European level. Also, for this reason, we are convinced that Italy is an absolutely relevant market for our purposes. Not only that, but the fact that Italy is still “barely beaten” by international investors makes it even more of an opportunity for BlackFin. It is therefore essential for us to position ourselves, both as a trusted partner of Italian fintech / insurtech and as a partner for their internationalization in Europe.

In the meetings held on September 26th at the Fintech District, what idea did you make of the Italian fintech ecosystem? What impressed you?

The meetings with some startups of your community at the District in recent weeks have confirmed what we already thought of the Italian market. It is not very mature but has great potential for growth. Talents and ideas are not lacking, but both the creation of an ecosystem and the arrival of capital are necessary. The positioning of BlackFin on the Italian market wants to be a stimulus and a signal for Italian fintech entrepreneurs.

Having said that, however, what will happen in Italy in the coming years remains decisive: the direction in which the country will go will tell us if a fintech ecosystem can really take off in Italy or not. At the moment it is still difficult to foresee this accurately and give an answer. On the day of the meetings held at Fintech District we were pleasantly impressed by the number of Fintech companies it succeeded in attracting, actually becoming the reference point for the Italian Fintech system. Of all the initiatives we interacted with, we were struck by the desire to create high value-added products / services which improve the end consumer experience, be it a person or a company.

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