After working together for nearly a decade, three former Amex Ventures executives left in early 2022 to create their own fintech-focused venture, Vesey Ventures. The trio had made early investments in more than 50 fintech companies, including Stripe, Plaid, Melio and Trulioo. During that time, they have also helped establish more than 100 partnerships between startups and financial services companies.
Their goal was to apply those 10 years of investing experience through the venture capital arm of one of the world’s largest credit card companies firsthand to early-stage new investments — but with a twist. The company says it plans to move beyond term sheets and release bespoke “Strategy Sheets” that outline how Vesey Ventures plans to leverage its network “to act as a company’s first business development team” . In other words, it wants to invest in early-stage fintech and enabling technology companies “where there are opportunities for early partnerships with established financial institutions.”
And today, the company — founded by founders and friends Dana Eli-Lorch, Lindsay Fitzgerald, and Julia Huang, who all left AMEX Ventures at the same time in late 2021 — announced the closing of its $78 million debut fund. They named the company Vesey Ventures after the street where American Express’ headquarters is located in New York. (They declined to say whether Amex is a limited partner in the new fund.)
The performance is especially impressive considering that, according to PitchBook data recently cited by The information, “Women-led venture companies in the US have raised just $74 million this year.” This means that at the close of its debut fund, Vesey has actually raised more than all women-led venture capital firms in the US combined and more than double the amount raised by women-led venture capital firms to date by 2023.
Vesey’s self-described mission is to support companies in “transforming financial services” from inception through the Series B phase. It plans to invest $1.5 million to $3 million as initial checks, and larger amounts for follow-ups. Based in the United States and Israel, the fund has backed five startups to date, including Coast, Cyrus, Grain, Equi And Correct.
Vesey defines fintech in its broadest sense, meaning investing outside of traditional categories of financial services such as consumer and B2B, Eli-Lorch said in an exclusive interview with businessupdates.org. It also looks at vertical software, embedded fintech, the future of commerce, and the infrastructure layer — basically cybersecurity, risk, and compliance, or, as Eli-Lorch describes it, “all that financial services back-office business.”
“Another lens we take is basically any kind of technological software innovation that is sold to financial services, both financial institutions and fintechs,” she said.
Table of Contents
Bridging a gap
The founding partners all agreed on one thing when starting the new company: that it was clear that startups with better business development strategies achieved better results.
“And that’s ultimately the insight we built a thesis on,” Fitzgerald said. “In this sector, this development is not a ‘nice to have’, but a ‘need to have’. ”
“However, the traditional corporate VC model can be restrictive, so we saw an opportunity,” she added. “We took the best of what clearly worked – business development, our team, our network – including other VCs and angels, and expanded it… to bridge the gap between companies that need new technologies and the startups that need those new build technologies.”
Today, the partners recognize that an interesting phenomenon is taking place: senior executives of what they describe as “gen one” fintech startups. And despite the recent volatility the fintech space has seen in recent years (funding was down significantly in 2022 compared to its 2021 heyday), Vesey is of course “long-term bullish” on fintech.
“You only have to look at the past quarter of financial services volatility and turmoil to really see that there are still a lot of issues that need to be resolved,” Huang told businessupdates.org. “Having said that, things are cyclical… it’s like when the tide goes out, you see who’s kind of naked, right? And for us, that’s the layer of infrastructure…that we’re always helping to build and strengthen our businesses so they can become reliable financial institutions for the long term. That has become a very important pillar, and now it is completely fashionable again.”
Huang also acknowledges that the trio took a step back from investing in 2021 “because it got way too frothy”.
“Each company was a kind of ‘me too company’, she recalls. “So we decided to step back and think about our value proposition and what has legs and what doesn’t.”
Vesey consciously chose to be on the ground in Israel (Eli-Lorch is located there), a market the partners say is home to one of the world’s fastest growing tech hubs, with many companies focused on fintech, enterprise software, cybersecurity and data. It aims to help startups there collaborate, expand and commercialize in the US
The new company remains silent on its LPs, saying it only includes seven “highly prominent financial institutions,” as well as founders and executives of established financial institutions, family offices and institutional investors.
Want more fintech news in your inbox? To register here.
Do you have a news tip or insider information about a topic we covered? We’d love to hear from you. You can reach me at [email protected]. Or you can send us a message at [email protected]. Please respect anonymity requests.