Element Ventures raises $130m fund for B2B fintechs

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The European VC firm wants to invest in a portfolio of 15 companies in areas such as banking as a service, payments and insurtech.

Element Ventures has announced the close of its inaugural $130m fund for founders of fintech start-ups.

The fund aims to invest in around 15 portfolio companies that work in areas such as banking as a service, payments, insurtech, asset management and infrastructure.

Michael Spencer, the British businessperson who founded the NEX Group, was one of the key investors in the fund. Backing also came from Ullink founder Laurent Useldinger, former SunGard CEO Cris Conde, Fenergo founder Marc Murphy and R3 founder David Rutter, among others.

Isomer Capital, a European VC that invests in other VC funds, also invested in Element’s offering and will join its limited partnership advisory board.

With head offices in London, Element is a European VC firm that focuses on B2B fintechs. It was founded by Steve Gibson and Michael McFadgen in 2019, who were later joined by former HSBC vice-chair of global banking and markets Spencer Lake.

Since its inception, Element has backed European B2B fintechs including insurance platform Hepster, B2B payment network Billhop, cryptocurrency recovery service Coincover and subscription management platform Minna.

“When we created Element Ventures, we believed that a sector-focused, founder-focused venture platform was what Europe’s B2B fintech entrepreneurs needed,” Gibson said.

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“This has been validated by both founders and [limited partners]. We’ve been able to build a platform for fintech founders, backed by fintech founders, that will help to scale transformative businesses in the industry.”

Open banking a ‘game changer’

2021 has so far been a good year for fintechs in Europe. According to data from Dealroom, European fintechs raised €10.4bn in the first half of the year, which is more than the €9.3bn raised in the whole of 2019.

It also marks a strong recovery from the pandemic-induced slump in 2020 that saw investments in European fintech stand at €8.4bn.

“B2B fintech is one of the most exciting opportunities in the tech industry, with incumbents facing huge challenges to digitise and talented entrepreneurs ready to compete,” McFadgen said.

“We’ve already backed some incredible businesses and we’re looking forward to discovering the next-generation entrepreneurs that are rising to this challenge.”

Joakim Sjöblom, CEO and co-founder at Minna Technologies, said that open banking has been a “game changer” for financial services in Europe and has empowered fintechs such as Minna to create “products that consumers are crying out for”.

“Connecting to banks and building relationships can be extremely difficult, which is why we were delighted to bring Element on as an investor for our Series B due to their substantial knowledge and deep connections right across the industry.”

Minna is a subscription management platform that enables customers to get an overview of, cancel and improve their subscriptions. It has partnerships with Lloyds Banking Group, Swedbank and ING, and was one of 10 global fintechs selected for the first cohort of the NadiFin global fintech accelerator in Dublin and Luxembourg in 2019.