Investment firm to use funds to build, invest in and grow its fintech ecosystem
Believes financial services sector ripe for disruption, last frontier for the Internet
INTERNET investment firm Nova Founders Capital said it has secured a US$50-million investment from Pacific Century Group (PCG), which will be used to build and develop financial technology businesses in high-growth markets.
Nova Founders was founded in Kuala Lumpur as a tech incubator by two former Rocket Internet global partners – Mads Faurholt-Jorgensen and Raphael Strauch – but now has its international headquarters in Hong Kong. It claims to have incubated about 30 technology companies, including the CompareAsia Group.
Its other ventures include digital marketing agency Lion&Lion and online eyewear marketplace GlassesGroupGlobal.
PCG, whose chairman is Richard Li, the youngest son of Hong Kong tycoon Li Ka-Shing, was established in 1993 and has interests in property, financial services and other investments in the Asia Pacific region.
In a statement, Nova Founders said the investment would enable it to further invest in existing companies, build new companies from scratch, and invest in and acquire additional companies for the firm’s portfolio.
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It will be focusing on the financial services sector, which the company described as being “ripe for disruption to deconstruct and re-design the way that financial services are delivered to consumers across the globe.”
“Fintech (financial services technology) is the largest remaining Internet frontier, presenting massive opportunities across Europe, Latin America and Asia in particular,” said Faurholt-Jorgensen (pic), also the co-chief executive officer (co-CEO).
“We have so far identified 20 US$2-billion opportunities in financial services Internet models worldwide. We have already begun work to build and invest in the first five of them. We firmly believe that the next tech superstars will come from the fintech industry,” he added.
Given that the team’s domain expertise is not in financial services, how did it spot these 20 opportunities?
“Raphael [Strauch] has spent many years in investment banking at Goldman Sachs, and Mads [Faurholt-Jorgensen] has worked on financial services projects at McKinsey, while other team members come from firms such as Morgan Stanley,” a spokeswoman told Digital News Asia (DNA) via email.
“We not only have a passion for financial services but also a solid understanding of the sector through this experience.
“We also made a huge effort to find the best local and global industry experts to run the business. We aim to give our managers meaningful ownership in the businesses they are running, to make sure they have full responsibility for driving the growth and direction of the business,” she added.
In terms of the first five companies it has identified, will Nova Founders be building them organically, or will it be making acquisitions in this space too?
“Right now we are looking at concrete acquisition targets in the space where we believe we can have a strong impact with our execution know-how, and the knowledge we have accrued from the last 30 companies we have built,” the spokeswoman told DNA, adding that these five companies are based in Asia and Europe.
Nova Founders said it will have a specific focus on emerging markets, and believes it would be a significant asset to portfolio companies looking to open doors in these geographies, which have typically been more difficult to access.
As part of the firm’s goal to provide support beyond capital, Nova Founders has opened a European headquarters in London, and will open in Silicon Valley next year.
The firm said it is also inking a deal to invest in Denmark as a gateway to the Nordic market and is exploring plans for Germany where it sees a strong entrepreneurial environment.
“Our objective is to make services and in particular financial services, faster, more affordable, and more accessible for consumers around the world,” said co-CEO Strauch (pic).
“With this investment, we will be able to bring disruptive financial services businesses to consumers in new markets.
“We will also provide investors and financial institutions with new opportunities to gain access to the fastest growing Internet markets in the world, and invest in parallel with our rich network of family offices, venture capital and private equity funds, high net-worth individuals and conglomerates,” he added.
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