FINCH CAPITAL Investment Thesis

Finch Capital portfolio companies focus on fintech companies in Europe and Southeast Asia (SEA). In SEA, Finch invests in Indonesia, which is the largest SEA market and highest contributor to the region digital economy growth followed by Singapore. Another reason to pick SEA is that since 2012, SEA has given rise to 10 unicorns, so the market has been very bullish. Additionally, about half of Indonesia population is unbanked, the MSME credit facilitation has been inefficient, which all contribute to the high adoption rates of Fintech in SEA. 

Finch picks fintech sector because the large annual spending in software technologies by financial institutions pave way for collaborative business model with Fintech, which resulting in accelerated penetration of fintech companies globally. Fintech also creates impactful contribution on financial inclusion efforts in rising markets such as SEA. Meanwhile, fintech will also have a profound impact in other segments of consumer spending categories such as entertainment, healthcare and education. Since 2016, fintech related themes have represent a large portion of total SEA tech investments. 

In traditional fintech, Finch invests in verticals such as payment, lending, insurance tech, personal finance and wealth management. In payment, the trend is from cash, ATM to mobile payment. Ayopop is a bill payment platform based in Indonesia. In lending vertical, Finch sees the trend is going from traditional financial institution to P2P lending. In this vertical, Finch invested in Pintek, Indonesia’s student and education SME lender. In insurance technology vertical, Finch predicts the insurances are going from off the shelf to on demand insurance. In this vertical, Finch invested in Digital Insurance Group, which is a digital insurance distribution platform based in Netherlands. As for personal finance vertical, Finch believes the trend is going from financial advisor to robo advisory, and the transformation from wealth manager to AI. In this vertical, Finch invested in TaxScouts, a UK based company combining automation and accountants to make tax filing simple.