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October, 2018 Volume 20

XPLR Development/Capital Deployment

We have refined our algorithms for sourcing FinTech companies and are now getting five or more startups monthly to investigate. We will be announcing our first investment discovered by XPLR soon!

Thanks to the hard work of Frazer Anderson, our associate, and Farrah Nekui, our summer PhD candidate intern, we have deeper insights from our Cogo Labs data on consumer activity on the web. In addition to finding companies, we are monitoring in real-time how consumers are becoming educated and businesses are working to solve the financial needs of individuals and other enterprises. We are making real progress deploying capital into our portfolio companies. We have now called 40% of the fund. Word appears to have gotten out, and we have enjoyed an increase in the number of referrals we are receiving from other name-brand VCs to join them in their investments, or take on an early-stage company to nurture to its A round. These are high-quality deals with serial, successful entrepreneurs at the helm. Our reputation in data science and our operating experience is resonating with the startup community. Ian Sheridan and Mike Nugent continue their excellent work digging into these opportunities. —Mark & Dave
 

Envision Interview with Ian Sheridan

Customer value chain insights from Managing Director Ian Sheridan

A FinTech View for the Value Chain

We are often asked what will allow an incumbent to succeed in these fast-paced times. We need look no further than the value chain. What distinguishes your company from any other in financial services?

Certainly you have an advantage with your brand and company culture, assuming it is well thought of by consumers and employees. This is not enough now that the consumer is demanding better value and a better experience especially with technology. She has learned that life can be easy when buying a book from Amazon or getting a ride from Lyft. Why aren’t financial services the same? This is where many of our portfolio companies come into play in the value chain. They can bring two key attributes to incumbents: lower costs and improved customer experience. They do this with creative engineering that leverages advancements in AI, Big Data, IoT and blockchain technologies. They bring scale oddly enough by being focused and heavy users of automated, multi-tenant solutions. We believe these two attributes are key to changing the customer value chain in our industry.  We are finding and funding those startups that can make this new chain a reality. —Ian & Mike

FRST Joins Our Focus on Infrastructure For Crypto Assets

We are pleased to welcome FRST (and their puppy! designed by Simon Oxley whose portfolio includes logos for Twitter and GitHub) to Fund 1. Vestigo was co-lead on a $3.5 million seed round with CMT Digital. FRST is an enterprise-grade, trading floor-ready technology suite that enables professional traders to perceive, categorize and act upon transactions involving digital assets. The company’s technology rapidly identifies digital currency token trades before they are moved from a wallet to an external party or exchange, providing important insights for firms trading cryptocurrencies.

The infrastructure necessary to ensure access to trusted, transparent and actionable information is the void in the crypto market that FRST is successfully bridging. They have a clear customer focus starting with high performance trading floors. They are in a beta rollout with the goal of coming to market in a few months. Founded by Patrick Gorrell and Jonas Frost who are both serial entrepreneurs, they brought on Karl Muth as CEO. Karl founded Haystack and has extensive experience in financial services from American Family Insurance, Starwood and Corus Bankshares.
Karl is also a University of Chicago JD and MBA as well a PhD from the London School of Economics. Gorrell’s technology experience includes development roles at eekoh, Wildlife and Speakr. Frost co-founded Playahead AB which was the first viral social-media platform in Scandinavia. We believe the tools needed to successfully trade these new asset types will be in demand as the market normalizes over the next several years.  Recent announcements by Fidelity and Goldman Sachs demonstrate the ever growing need for infrastructure.

Portfolio Updates

Student Loan Genius is Now Vault

New look, same genius! We are pleased to share the story of Vault’s successful rebranding and are confident that the team will continue to aid their customers in tackling the suffocating problem of student loan debt.

Corporate Actions

Vestmark recently announced the acquisition of Adhesion Wealth Advisor Solutions. Adhesion is a complementary portfolio and practice management SaaS for RIAs. The acquisition will only broaden Vestmark’s robust portfolio of customer solutions.

Netcapital Raises the Stakes

Netcapital has recently expanded its addressable market with the landmark offering of Braidy Industries. Netcapital has historically focused on empowering early-stage entrepreneurs. With Braidy looking to build a $1.6B aluminum rolling mill in Kentucky, the team at Netcapital has demonstrated that they can delight large-scale enterprises as well.

LifeYield Partners with Russell

We are delighted by the news the LifeYield is partnering with yet another major asset manager in Russell Investments.

Interesting News

Games Will Be the Catalyst for Blockchain Mass Adoption

Here at Vestigo, we are closely monitoring the horizon for the killer-app that will catalyze the mass adoption of blockchain technologies.

Live a Little

Some people think VCs sit around making big decisions all day. At Vestigo, we prefer to spend our time culling our data for signal and insights, but do occasionally indulge a FinTech fantasy or two…

Value Chain as Competitive Advantage

In this month’s interview, Vestigo Principal Ian Sheridan articulated how we think about the customer value chain as investors. One of Vestigo’s cornerstones is approaching high level concepts from as many perspectives as possible. This often involves putting on our well-worn corporate strategy “hats.”

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