Monday 2 August 2021 3:42 pm

Michael Spencer-backed fund raises $130m for B2B fintech push

Fintech-focused venture capital firm Element Ventures has announced a $130m (£93.5m) fund to invest in b2b financial enterprise technology businesses.

Michael Spencer, City grandee and founder of interdealer broker Icap, was the fund’s cornerstone investor. It comes after Spencer contributed at least £25m to the fund upon launching last year, via his investment vehicle IPGL. 

Although Element has not disclosed the amount the former Conservative Party treasurer contributed to the new fund, his investment last year of at least £25m was one of the largest made since he sold his trading technology firm Nex to the Chicago Mercantile Exchange for £3.9bn in 2018.

He was joined over 30 other founders and financial leaders including Laurent Useldinger, founder of ULlink and Cris Conde, former CEO of SunGard, and and Anna Ewing, former Nasdaq CIO.

The fund will invest in a small number of Series A and Series B stage companies each year, until it builds a portfolio of around 15 companies in areas including banking-as-a-service, payments, insurtech, asset management and infrastructure.

This will allow it to employ a “high conviction investment strategy” that allows it to provide a “high level of support” to its portfolio companies, Element said.

Element will double down on financial technology companies that focus on b2b services, capitalising on the ongoing fintech boom that has seen European fintech companies already raise $12.3bn so far this year, according to Dealroom data.

Steve Gibson and Michael McFadgen, two of Element Ventures’ three partners, previously ran Nex’s venture capital division. Former HSBC vice chairman of global banking and markets Spencer Lake is the fund’s third partner.

So far, Element has backed b2b fintech firms across the UK and Europe including UK-based cryptocurrency startup Coincover, which has so far raised $11.6m; embedded insurance platform Hepster; and b2b payment network Billhop.

While its investments have been focused on the UK and Europe, Element said it has a “global mandate”.

“B2b fintech is one of the most exciting opportunities in the tech industry, with incumbents facing huge challenges to digitise and talented entrepreneurs ready to compete,” said Michael McFadgen, Partner at Element Ventures.

“We understand the journey these companies need to navigate to be successful. There is so much potential for change in this industry and we’re excited to be a part of it,” said Spencer Lake, Partner at Element Ventures.

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