Jun 19, 2020

Top 10 venture capital firms: Balderton Capital

Matt High
2 min
Venture Capital
Having featured in our Top 10 venture capital firms in the June issue of FinTech magazine, we take a closer look at Balderton Capital...

In an industry as innovative as financial services, venture capital (VC) firms play an essential role in helping startups, fintechs and challengers come to market.

They are, in essence, the engine room behind many of the most innovative new players in the sector.

In our June issue of FinTech magazine, we compiled a list of the 10 leading VC companies, ordering them in assets under management in USD from highest to lowest.

More than that, however, we looked at what makes these firms tick, understanding what lies behind their investment decisions and considering those fintechs or startups that they have already backed to date.

Here, we take a closer look at Balderton Capital, an organisation that was placed ninth on our list and that is a leading player in the European VC market.

Balderton Capital was founded in 2000 and is headquartered in London.

It is currently Europe’s leading early-stage investor and focuses exclusively on European founded technology companies at Series A.

According to Balderton, the next European giant will be a technology company.

It explains: “The continent’s long tradition of innovation and substantial engineering talent, along with 10 years of ecosystem development, have come together to create an environment where startups can scale to become large companies with global impact.”

Accordingly, Balderton works exclusive to nurture and realise the ambitions of Europe’s next generation of tech giants.

To do this, Balderton’s team consists of founders and operational leaders of multi-billion dollar global companies.

The company shares this knowledge, expertise and collective insight with those businesses it works with, ensuring the realisation of a startup’s journey from idea to a global and impactful business.

Balderton primarily invests at Series A and is the most active Series A investor in Europe.

In parallel, it runs a liquidity fund for later stage secondary investments in fast-growth, European-founded tech startups.

In the 20 years it has been active, Balderton has raised eight funds totalling over US$3bn - it has more than 90 companies in its active portfolio, founded in 15 countries across Europe.

Specifically in the financial services sector, Balderton has invested in Revolut and Clear among others.
 

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Jun 10, 2021

FIVE things fintechs must do to keep investors onboard

Fintech
Investment
venturecapital
AI
Brandon Rembe, CPO, Envestnet...
5 min
Fintech innovations drew in first-time investors who reshaped the markets. What new advancements will help them continue their rise?

New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.

Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?

The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.

Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.

Equal access to financial wellness education

Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.

The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.

More personalisation

Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.

For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.

Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.

The rise of AI-Powered Advice

Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?

Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs. 

Focus on financial mental health

New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.

It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.

Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.

Gamification for good

The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.

Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.

Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.

The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.

About the author: Brandon Rembe is CPO at Envestnet Yodlee. He has over 18 years of experience building high-growth technology, software, and information service companies, Brandon has worked across a broad spectrum of enterprises from early-stage ventures to global businesses.

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