Index Ventures to Invest $2 Billion in FinTech Firms Focused on “Fundamental Transformation”

Ever since President Obama uttered the words “fundamentally transform” as relating to America, the phrase has still some steam left in it. This time, FinTech firm specialized in investments, Index Ventures, managed to gather an impressive sum of $2 billion to make fundamental transformation a reality.

FinTech Startups Seemingly Unaffected by Chaos

It turns out, the fears of halted funding for FinTech startups during the economic downturn caused by the extreme societal response to COVID-19 pandemic are unfounded. Index Ventures will divvy up the $2 billion into two funding groups, presumably for the purpose of easier asset management.

•   $800 million goes to Index Ventures 10
•   $1.2 billion goes to Index Growth 5

Both funding groups will allocate their funds to a wide range of organizations, from pre-launch tech startups to businesses that show potential for growth, with an emphasis on firms that seek to expand their operations to international markets.

If you are a fan of the Revolut neobank, it may surprise you that they owe their existence to Index Ventures, alongside funding popular stock trading app Robinhood, and the advanced Dutch payment platform Adyen. That is indeed a commendable track record for successful investments made by Index Ventures. No doubt, many startups in the UK will be relieved that the Coronavirus crisis will not shatter their dreams of similar successes.

Vagueness Is a Path to Greater Oversight

The overall criteria under which prioritization will take place is not entirely clear at this time. Index Ventures simply stated they are willing to invest in those firms that engage in the following behavior:

“Fundamentally transforming the way we live and work.”

Jan Hammer, partner at Index Ventures, says despite a turbulent time, they’ll look at ambitious entrepreneurs who remain focusing on building value, for the long-term: 

“Innovation is often born out of adversity. The path to building a great company is not a straight line, with many obstacles and forks along the way. We take the long view and remain committed to investing in ambitious entrepreneurs at this unprecedented time.”

It is safe to say that detailed and feasible business plans, aimed at long term expansion, will be pushed at the front of the line. However, crypto enthusiasts have dreamed of a fundamental transformation for over a decade. It is now apparent that primary obstacles to financial decentralization and peer-to-peer systems lie in the form of governments and banks. They could either have to be overcome, which is least likely, or these institutions would have to integrate solutions coming out of FinTech startups. Therefore, slow-paced evolution would be a more apt phrase to fundamental transformation.

What kind of novel financial services and ideas would you like to have funded? We want to know what you think in the comments section below.

Image courtesy of the New York Times.