The Rise of WealthTech: a $68 trillion opportunity

Can you tell us a little about your background and how you got to where you are today?

My journey in start-up started 13 years ago when I developed a website allowing anyone to publish their novels, some sort of Wattpad, that was the early beginning of the fanfiction trend. It was a great experience & gave me the kick to continue in that direction.  A few years later, I met my cofounder Remy at university and we launched a fashion marketplace that reached 10,000 users.

I then worked for an insurance company and Rémy ended up working for a company that was servicing, among others, venture capital firms. We learnt a lot about the industry and talked to many fund managers & investors.

 Again and again, we heard the same story: launching a fund/SPV is a pain because of all the legal, accounting & compliance issues you have to deal with that prevent you from focusing on your main job: raising & investing capital. That's how we came up with this idea of an end-to-end platform to pool & deploy capital online. 

Can you tell me more about Vauban.io?

Sure, our mission is to democratise private investing. Angel investing is difficult to access because of the high minimum investment and the quality of deal flow which varies greatly depending on personal networks. We solve that problem by enabling people to invest together in private companies. 

To give you an example, let's say you decide to invest in a startup and ask for a 200k allocation. You personally take 10k and then decide to invite your friends and people in your network to syndicate the remaining 190k allocation. You share the deal with your investors and you can decide to charge a carry as well. Then, your capital and your co-investors’ capital is pooled into a 200k SPV which invests in the startup.

From your perspective, you get more leverage. For your co-investors, they get access to high quality vetted deal flow and post investment governance.

The magic happens in the background where we provide all the legal and financial infrastructure needed to pool and deploy the capital. 

So far we have structured 300 deals and $500m have been invested through our platform. 

How do you explain this surge for VC/angel investments? 

The rush is real for sure! For example, the average family office investment allocation into VC was 10% in 2020, and this year, that has increased to 24%.

The most obvious reason is for the returns of course, especially in the current climate, where lack of yield has made traditional assets less attractive than ever.

But I think it’s more than returns. People want to have an impact. When you help a start-up to succeed, you feel part of the adventure. It's very rewarding from an emotional and ... monetary point of view for the lucky ones. It’s a very different feeling than buying a ETF!

How do you see the angel investment space going? 

Angel investing in Europe has grown significantly from just a handful of investor networks on the continent in the late 90s to a market that today sees more than 450,000 angels.

What is interesting is that we are seeing the emergence of "super angels" who build on their past successes to gather communities of angel investors to back their future investments.

These syndicates provide access to quality deal flow as well as great learning opportunities and critical network connections for new angel investors. 

What is unique about building a fintech?

The challenge of fintech is that you’ve got to combine tech with a lot of complex regulatory, financial, accounting, compliance, taxes & legal requirements to create a meaningful product. 

It's an additional technical challenge unique to fintech, that's for sure, but it also means that you have many more levers to play with to differentiate yourself from the fintech competition. 

It is not necessarily the one with the most features that will win, but the one with the best infrastructure and operational efficiency in delivering those features. 

What’s exciting in the fintech space right now? 

I’d say that Fintech is at 1% of its journey.  It used to be only about payments but we are now realising the true potential of fintech.  The way neo-banks have challenged the establishment has opened the door for new fintechs to enter uncharted territory. Start-ups are now tackling financial services from every possible angle: democratising stock investing, investment in real estate, yield investing, wealth management, access to opportunities traditionally reserved to large institutions. 

Financial advisors estimate that as much as $68 trillion will move between generations within 25 years. And the new generation won’t invest in the same things as the previous ones. The opportunity is huge: trillions of dollars are still managed the old fashioned way and incumbents charge huge fees for such a poor user experience. WealthTech start-ups have a unique opportunity to unlock this capital.