Altari Ventures Thesis

I’ve made many new connections in the startup and investment community since announcing the close of Altari Ventures Fund I this summer. I thought it would be worthwhile to provide a little more color on Altari’s thesis and share specific opportunity segments that I’m most interested in investing in. These areas are directly informed by my experiences working on Wall Street and as a B2B SaaS VC, giving me what many of my LPs like to call great “GP-thesis fit.” 

As a reminder, I invest in enterprise fintech at the earliest stages. Financial services is one of the largest and most profitable sectors of the global economy with an estimated $12.5 trillion annual revenue pool, $2.3 trillion annual net profit pool and 18% average profit margin. Fintech’s share of the revenue is expected to grow more than sixfold to $1.5 trillion in 2030, representing value created by companies selling to incumbents to help them compete and companies building alternative solutions outside of existing financial services firms. Investing in startups aligned with this growth is a massive opportunity for investors.

My definition of enterprise fintech is broad and encompasses the following themes:

Data-driven enterprise intelligence

The amount of data businesses are collecting continues to grow at an increasing pace. While I do not separate AI into its own investment category for Altari, I view best-in-class AI tools as table stakes for extracting actionable insights that improve operations, compliance, risk management, customer experience, and more. Companies I invest in typically have sophisticated machine learning algorithms and AI at the heart of their product. Business problems solved by these products, however, range from those unique to financial services to those where the potential client list extends to many other industries.

Capital markets and asset management technology

This category connects to the core of my Wall Street skillset and network. I genuinely believe that there is a lot to do here, especially now that early stage valuations, which were historically disconnected from VC market norms, have come down. For financial firms, the explosion of data means potential for new revenue as much as it means more risk and need for upgraded infrastructure. Whether built for the buy side, the sell side, or both, I like front office tools for risk management, workflow optimization, data monitoring and compliance as well as solutions improving back and middle office processes. I am also excited about tech that enables and facilitates new financial products and asset classes, and businesses that live at the cross section of more than one fintech sub vertical (like real estate tech + investment management, asset management + insurance, etc). However, I am very focused on there being a real problem to solve and do not have interest in analytics tools that simply "help generate trading alpha."

CFO tech stack

The financial operations management toolkit continues to evolve as businesses strive for greater efficiency and cost control, especially in the current economic climate. The role of the CFO office is also expanding as those teams end up being responsible for making sense of the growing amount of internal data. I am very interested in startups offering upgraded software solutions for expense management, forecasting, accounts payable/accounts receivable/working capital management, tax, payments, funding and hedging.

Embedded finance

We have become accustomed to embedded finance solutions in our personal lives, but the B2B world is significantly lagging behind in adopting this trend. It is underway, however. Massive opportunities exist for vertical SaaS platforms serving traditional industries to offer their clients true end-to-end digital commerce experiences, from product discovery to customer service to seamless transaction processing. If you’ve ever downloaded a PDF brochure while considering a B2B purchase and had your digital experience end there, you understand why I may be excited about investing in a 21st century upgrade of that process. I am also interested in better tailored products banks can offer clients as a result of accessing data from their digital business systems (ERP, supply chain management platforms, accounting systems, etc) such as receivables or purchase order financing, accelerated payment options and other liquidity management and credit solutions.  

Decentralized/centralized infrastructure convergence

One of the core tenets of the Altari thesis is that the foreseeable future of finance isn’t exclusively centralized or decentralized. Rather, it is about the convergence of the two over multiple decades. But as both worlds presently exist, we are already living in a hybrid environment where DeFi and traditional finance coexist alongside one another and need to become interoperable. I am taking it slow with this theme but would like to see more companies that are exploring this opportunity space. For clarity, however, I do not invest in crypto.

These are just a few areas where I am spending a lot of my time right now, although it is by no means an exhaustive list of what could be interesting in enterprise fintech. Importantly, a number of companies I’ve invested in align with more than one of these themes which makes them even more exciting to have in the Altari portfolio.

If you’re a startup that is taking on one of the above challenges or a problem not mentioned but one I should learn about, I’d love to hear from you. Please share your startup here. (Note: Altari Ventures currently invests only in US and Canada-based companies)

If you are an LP following Altari Ventures, please DM me. I would love to build a relationship.

#fintech #startups #vc #venturecapital #emergingmanagers #technology