Inside the minds of VCs and the FCA at the inaugural Fin-k Tank Dragon’s Den

Looking to fundraise or test your start-up idea? We’ve just had a fascinating glimpse of what four leading VCs are looking for in their next investment, as well as a bit of inside info on what the FCA Innovation department is hoping to test in their global sandbox (https://www.fca.org.uk/firms/regulatory-sandbox/global-sandbox).

Four start-up fintechs went head-to-head at our inaugural Fin-k Tank conference, judged by a panel of experienced VC investors:

• Will Gibbs, Investment Manager, Octopus Investments

• Dharmash Mistry, General Partner at Lakestar VC, Angel Investor and NED

• Rob Moffat, Partner, Balderton Capital

There were four demos:

• Richard Crook, Head of Emerging Technology, RBS. He spoke on the next generation of fund creation on block chain (https://www.rbs.com/rbs/sustainability/customer-focused/technology-innovation-and-disruption.html).

• Sebastian Comment, MD and Samuel Scheidegger, Member of Executive Board at Clever Circles (https://clevercircles.ch/). Clever Circles is an open asset management platform that allows you to harness the wisdom of your chosen crowd when making investment decisions.

• David Vanek, CEO and Founder, Anorak (https://www.anorak.life/). Anorak is a new player in InsureTech – you can get a simple life insurance checkup online, impartial advice about your cover and then 3 best-matched policies to cover you. They scan all the major insurers.

• Vinay Samuel, Founder and CEO, Zetaris (https://zetaris.com/). Zetaris is an Australian-born data platform, the world’s only true data fabric. It lets organisations connect to every possible data point that helps define an organisation’s decisions.

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Dharmash said: “The thing we see most is great solutions that don’t really have problems. There needs to be a very clear problem the business is solving. We invest in companies which offer solutions that are 50-100% better…winners make investments in customer experience. It causes a self-fulfilling word of mouth loop.”

Zetaris intrigued him. “We see lots of companies with data living everywhere and in a mess. Zetaris seems to push on this significant problem.”

“The public is wooed by cost and pricing structures when it comes to switching,” said Rob Moffat. Pricing was a key theme of the day – Dharmash called out commission-free trading platform Robin Hood (https://robinhood.com/) as a genuinely exciting entrant. “It’s hard to see how their pricing model won’t be very disruptive.”

Will Gibbs said there was “a lot of excitement about building value on top of existing incumbents. If you get the customer proposition and experience right, the size of the prize is huge.” Though he also called out the knowledge gap as a real barrier to mass-market adoption. “We’re underwhelmed by financial education – the gap is still there, and it creates a ceiling on innovative mass-market products.” Will, we couldn’t agree more.

The popular vote went to Anorak, a life insurance and income protection provider, which aims to ease the journey of finding and buying the right life insurance. David Vanek, CEO and Founder, said: “There are 9m without life insurance in the UK, and another 35m in the US. We want to make life insurance as accessible as possible.” It secured 51% of the overall votes.

Starting the presentation with a slide saying two words, DYING SUCKS, may have helped.

Anna Wallace, Innovate Head of Department at the Financial Conduct Authority (FCA), explained that although it’s tempting at times, it’s not the regulator’s role to tell start-ups how to innovate. When new ideas come along, however, they can help start-ups test them with real users in safe environments. The Global Sandbox is designed to do just that.

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“Fintech business models are too untested to regulate well, so we set up a sandbox to test the safely with real users before they go to market,” Anna said. So, what would they like to see more of, just quietly?

“Helping the most vulnerable in society hasn’t been an attracting force for innovators. Low cost credit ideas, for example. We’d love to see more of that in the sandbox.”

You heard it here first.