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The next stage: Investing in founders building the future of finance and insurance

October 6, 2022

The next stage: Investing in founders building the future of finance and insurance

Why are you raising an investment fund?

An investment fund is the logical next step in better serving our innovation ecosystem. Founders need two things to build and scale their ventures: Support and money. We already provide the former very successfully through our highly specialized ecosystem. Now, we want to be able to complement our offering towards our funders with financial resources.  

Additionally, the fund is a huge opportunity: We have some of the best fintech founders going through our programs in each of our hubs, such as Yokoy, Oper Credit, or Stableton. Investing in them allows us to sit in the same boat and benefit when they succeed.  

What sets this fund apart from others?

Long story short, the team and our unique ecosystem. Without our whole organization, the investment thesis of our fund would not make sense. Within every one of our global hubs, we have amazing people that organize programs, support our founders, connect them to our local ecosystem and manage our investments.  

This is a huge success factor: our global ecosystem and support organization tangibly adds value to founders. We support founders over several months throughout the incubation program and use our experience to give them the tools and connections to succeed. Our alumni point to the value of our global ecosystem. From access to network and business expertise, introductions to corporate partners, insights into the financial industry, world-class mentors the founders can learn from, and our investor network. Combined, these factors help companies perfect their product, master go-to-market strategy, and increase the chance of future success. With our Incubation fund, all companies joining an incubation program will receive a first investment upfront in the mid-5-digit segment. We will then invest a second tranche in the startup’s subsequent round. This is hard to get from other early-stage investors.

As a fund, what type of companies you are planning to invest in?

We invest in entrepreneurs building the future of finance and insurance from day one. We plan to be the first institutional investors the founders speak to. The F10 Incubation fund will invest in angel, pre-seed, and seed stages. We only invest in companies that emerge from the global F10 incubation programs as this is where we have the most leverage to add value. The ideal founder team is complementary and ambitious, with the drive and capability to build a large company in a huge market by creating a unique value proposition and scalable business.

From an LP perspective, what makes the fund unique?

Depending on the type of LP, we will deliver both Financial and Strategic ROI. The Incubation fund will have a supersized portfolio and broad market coverage of several hundred companies, covering all subsegments of fintech and insurtech.  

For corporate LPs from the financial or insurance industry, the F10 Incubation fund can hedge and complement later-stage vehicles like Corporate Venture Capital or even M&A. We provide our LPs exclusive insights, and anchor LPs direct investment, into selected companies. The F10 Incubation Fund gives Corporates LPs enough lead time to evaluate opportunities on their strategic value for the corporate. In addition, the return of the fund investment could cover the costs of innovation.  

To LPs focusing purely on financial ROI, we will provide an attractive return profile while managing the early-stage risk with a large portfolio. As markets came down recently we buy at attractive valuations. Now is the best time to invest in a long-term oriented fund. Adding to the risk-return profile, we believe that a large portfolio of opportunities is superior in early-stage towards few bets with large exposure per bet, as Power Law is very strong in VC. Beside, we offer our LPs to use the F10 Incubation fund as an early-stage lead pipeline for direct investments. We have validated our investment skills by successfully advising SIX Fintech Ventures, the CVC arm of SIX, and the F10 Investment AG, which invested in the Swiss incubation program.

What is the status of the fundraise?

We started fundraising mid of this year and already secured anchor commitments from three large financial industry partners that oversubscribed our first closing in December this year already. With this, we will start to support the first cohort of companies beginning of 2023. In parallel, we continue our fundraise with a roadshow in Switzerland and Singapore to get to the targeted 100m by end of 2023.

Who are your ideal investors (LPs) in the fund?

We are looking for a mix of corporates, family offices, and hand-picked business angels. For corporate investors, we provide a strategic direct investment pipeline of innovation opportunities. As our scope is very broad and internationally diversified, they receive great coverage and deal-flow opportunity besides the upside from the investment in the fund. LPs that want to work more actively with the startups selected for our programs can access a “Corporate Partnership”.  

On the business angel side, we hand-pick investors creating high impact and value add for the local ecosystem. Our minimum ticket for larger Corporate LPs requiring complex investor relationship management start at 2m, while we accept private Individuals and Family Offices from 200k. Our Anchor LP program starts from 10m upwards.