Tell us about Vostok Emerging Finance (VEF)
At Vostok Emerging Finance
(VEF), we invest in some of the most exciting fintech companies across emerging and frontier markets. We are structured as a publicly quoted investment company, listed in Sweden, and our investors are mostly classic fund management houses from around the world. We take minority stakes in EM companies and also sit on their boards and generally look to stay with the founding team through to (ideally successful) exits. As of today we have investments across Russia, Brazil, Pakistan and Africa to name a few geographies. While from a segment perspective, we are in payments, credit, marketplaces and mobile money
What’s your role in VEF?
I am CEO of VEF and the main hunter/gatherer of assets for our portfolio. I/we also sit on the boards of our portfolio companies, numbering 8 today and in general we work hard with and for the success of our holdings. I spend most of my time with our team on the road across numerous emerging and frontier markets researching markets, meeting new and existing opportunities.
Tell us something about VEF we might not know
While I am sure you probably knew little or nothing about VEF before this but...Vostok is taken from Russian, basically referring to "the Far East". The Vostok group of companies has been operating since the late 90's, from a Swedish base with an initial focus on private Russian energy assets. Over the years, the Vostok group has continued to evolve with the times and the investment trends and many derivatives of the group have been formed, inclusive of the latest one that I run, Vostok Emerging Finance.
What’s next for VEF?
VEF was created only 18 months ago so we are very much in our infancy. We run about $150mn of cash and assets, which now count holdings in 8 different fintech companies. Our pipeline remains healthy so we would expect to continue to make new investments as well as follow on supportive deals in our current portfolio companies. There is potential to raise more money should EM fintech trends continue in their strong vein.
What do you foresee in the future of Fintech?
Fintech is the future. The future of finance that is. Whether that is being driven by young (or not so young) companies backed by venture and private equity as ours, or being done out of incumbent financial institutions, the future of finance is digital, online, cashless, frictionless etc. To add, much of the core financial offerings have been disrupted by fintech companies in some shape or form and especially in the core finance functions of payments and credit, but when you look at how far China is ahead of most of the world in mobile/digital financial services, there remains a lot still to be done at a global level.
How do you think we can position Ireland as global Fintech hub?
Despite being Irish and basing myself here, the Irish fintech scene is not my field despite slowly getting up to speed on it. I have been impressed at how we have drilled down into specialist areas like payments and FX (and one could stretch that to gaming) and really been able to carve out global innovators and champions in these spaces. The boys behind Stripe clearly have done the country proud, while Fexco and Currency Fair are other notable names out there. I do see a lot of Irish people involved in fintech globally even if they are not founders themselves. I also have been impressed by how much the state has done to support the start up scene here, with funding and other measures. State support is never perfect and you hear as many criticisms s you do supportive comments, but given other markets I have seen, we generally have a supportive environment for start up success, fintech or otherwise.
What advice would you give to emerging Fintech companies?
So much advice out there, but given I see hundreds of companies a year, the question is always what am I looking for to make me want to deploy capital?. For us, it's all about the people and then the people around (above and below) the people. I also hate hearing about valuation until the appropriate time, I just want to hear how you are trying to build a leading company in the field in which you are operating, valuation can wait. Finally as much as we focus on strategy and vision, most of the successful companies that we have invested in are just Germanic on operational execution, The day on day detail of grinding it out.
Finally, what’s your favourite thing about working in Dublin?
I just moved back, after nearly 20 years away and I am loving it. I am fairly unique in that I have absolutely nothing to do with this place, from a work perspective that is. All my capital and investments are out there, in the world. Hence I just get to be here and enjoy it and don't need to ask it for much. Getting the right office space at Glandore was always going to be key to that and I am loving being near the canal and town, and never far from anywhere given the size of the city. My last 2 cities, London and Moscow were beasts in comparison.
Vostok Emerging Finance (VEF) invests in early and growth stage fintech companies across emerging and frontier markets. VEF take minority stakes and board representation where appropriate. VEF is structured as a publicly traded investment company, trading under the ticker VEMF SDB and listed on Nasdaq First North in Stockholm. You can visit vostokemergingfinance.com for more information or contact David here.