The 10 best fintech investors by industry are composed of both early-stage venture capitalists and late-stage venture capital companies (VCs). But one very striking fact stands out: One Chicago-area startup was able to get funded by 5 of the best fintech investors in the world last year alone. That company is called Livable World. And the story begins when its founders decided to apply for seed financing from three of the biggest private equity firms in the country. And from there, the story rapidly went viral throughout the capital industry.
So what’s the story with Livable World? What did the private equity groups have to offer the startup? These are the typical questions that most prospective entrepreneurs want answers to before diving into an angel investment network such as Livable World. And the answer, as it turns out, is that these same investors had a lot to lose by putting their money in the business.
To get to the point where Livable World actually received investment from some of the biggest institutional investors in Asia Pacific, it helps to take a closer look at the business. Livable World is a mobile commerce and shopping platform powered by mobile-friendly web applications. In other words, the company wants to bring advanced e-commerce and internet technology to the consumer marketplace. This innovative approach would be difficult to identify in this day and age from an off-the-shelf e-commerce system. And because of that, many e-commerce business startups are foregoing using a standard brick and mortar system in favor of more affordable and accessible software solutions. In Asia Pacific, the startup had to face many difficulties including:
In November last year, the company’s lead investor Guang Wu brought up the idea during a presentation at Tech Valley Conference in San Francisco. According to a report in CCPro, Wu told the crowd that he is pursuing a strategy of soliciting support from existing fintech investors in order to fund the company. The strategy apparently worked as two Chinese venture capital firms reportedly agreed to put in additional funding into the company. Additionally, the Financial Times reported that Yang Ma, a former CFO for Citibank, is one of the major shareholders.
However, Livable World isn’t the only promising fintech business in the region. Startup Collective, for instance, has received backing from Pepperjam Network, a prominent Chinese venture capital firm. And in November, Carbon Copy Pro was in talks with Greenday, a New York hedge fund that specializes in early-stage investments in technologies and companies dealing with clean coal, nuclear energy, and carbon emissions. In fact, the Carbon Copy Pro site features interviews with former U.S. President Bill Clinton and Silicon Valley’s Larry Page.
But there are also more traditional forms of fintech investing. Companies like Intuit, who offer financial software based on QuickBooks, and Netki, who allow users to make high-resolution digital payments online, have both received funding and investor attention. Intuit is in talks with Citibank, while Netki is working with Yahoo. On the hardware front, there’s Lively Media, which makes and sells portable media players, and Lerer Systems, which produce touch-screen tablets for consumers.
In terms of new businesses, there are still plenty of opportunities in the realm of mobile commerce. Investors in this arena should focus on start-ups that create applications that enable e-commerce to happen right on the web. The platform would probably need to support secure credit card transactions and have a merchant payment gateway that allows for secure electronic transfers of money. It would also be important for investors to look at management solutions and the ways these companies are marketing to customers and lenders. Most start-ups focus on social networking and e-mails to generate customers and boost their sales. But the need to take another step beyond that initial focus arises when a company begins to accept cross-border payments from other countries.
The best sectors for investment opportunities in the technology sphere in the U.S. include education, health care, and business technologies. Education, specifically, has seen tremendous growth over the past decade and has become a primary focus of both students and employers alike. Venture capitalists have jumped on the education bandwagon as well, pouring money into schools that provide curriculum-based, Internet-based training to students. Venture capitalists also back industries ranging from food processing to interactive software development, providing a crucial training option for the American economy. The healthcare sector, meanwhile, has seen incredible growth, particularly in areas such as home health care, physical therapy, and physician assistant. Health insurance has also gained momentum, with consumers relying less on their employers for coverage and many staying within their network of family and friends.