Chipper Boulas and James Savage, co-founders of Demetr Ventures, are raising financing to launch a $100 million global fintech fund, with the aim to soft close by the end of the year.
Their goal is to identify startups that can reshape financial services, that are transformative, and can scale. To do so, they are putting together what they term a decentralized business model for venture capital.
“Fintech investment is not being done on a global basis,” Savage told DigFin. “But even if we built five or six GPs [general partners] worldwide, we wouldn’t have enough knowledge or depth” to source the entire world for the most suitable deals.
Therefore they are taking a page from Firestratr, a London-based venture group co-founded by Boulas in 2012, which relies on a European-wide distributed network of associated advisors.
Boulas said, “We will build a core of GPs with 30 to 50 advisor partners, senior people in business drawn from finance and I.T.”
These advisors help source deals in their geographies and areas of expertise, help with due diligence in companies relevant to their experience, and mentor portfolio companies’ managers.
In return, advisors get to invest in the fund on attractive commercial terms and possibly co-invest in deals they favor.
“We’re reinventing VC with a platform approach,” Boulas said, adding more than 10 advisors have signed on. Demetr is also looking to source one more general partner, as well as build a network of friendly CEOs who aren’t advisors but are given incentives to share contacts and provide feedback.
Boulas and Savage are trying to attract two or three anchor LPs (limited partners) to invest as keystones. The partners are courting financial institutions as investors, offering banks and insurers not just a financial return but a window on innovation among the fund’s portfolio companies.
While the partners wouldn’t give keystone LPs voting rights or other leverage over the running of the fund, they would provide a consulting-like service, Savage said. “We can tailor a strategic view for them, to help them identify startups that are opportunities or threats.”
The fund will also invest in digital tokens, as well as in equity, but they will have to write tokens into LP agreements, as not all investors will want such exposure. The two partners have been investing in tokens and private shares on a personal basis, in order to seed initial positions for the fund. The fund will have a five-and-five year structure, and focus on seed and Series A investments, while keeping capital in reserve for follow-on investments.
Boulas is based in New York. Originally a management consultant specializing in Asia and telecoms, he spent two years in the mid-2000s as vice president of corporate strategy at eBay, established a Paris-based venture company for consumer mobile companies, and in 2012 co-founded Firestartr, a London-based venture company focused on early-stage tech companies.
Savage is a fixture of the private-equity and venture scene in Hong Kong, where he is chairman of the Hong Kong Venture Capital Association. He has been a partner at Hendale Capital and at HSBC-backed Headland Capital Partners.