An Interview with VEF, Analyzing Future Innovation and Creating the Next Prosperous Fintech Fund
- Samuel Feldman
- Aug 16, 2021
- 4 min read
Updated: Aug 17, 2021
Unlike most fintech mutual funds, VEF strives to actively participate in the companies they invest in, to help them grow and succeed.
(Image credit: VEF)
An Interview with Dave Nangle, Managing Partner, and CEO of VEF.
What is VEF?
VEF is an emerging market and fintech investment vehicle listed as VEFAB on Sweden’s Nasdaq First North Growth Market. VEF strives at backing growth-stage private fintech companies across the emerging world and their teams, all the way through to exit, by taking minority stakes and serving as active investors with board representation in each of their portfolio holdings. VEF's purpose is to create long-term sustainable value for shareholders by investing in the future of finance across the emerging world.
What was the inspiration behind VEF?
The Inspiration behind VEF goes back some ways. By training, I am an emerging market financial analyst. I worked in Barings Bank in London for many years. I've lived in Russia working for Renaissance Captial. I essentially have been running around the emerging markets since the early 2000s, looking at banks, payment companies, and insurers from countries like Poland, Czech Republic, Brazil, and Eygpt.
As we moved toward 2005-2006, we started to see the evolution of digital financial services, specifically in Russia. There I was present during the creation of Tinkoff Bank, met the founder in one of the first early iteration digital banks, and help to pull off a successful exit.
This got me away from the world of traditional banks like Bank of America or Wells Fargo to start thinking about digital banking tools like Robinhood and Revolut. This was essentially my Fintech moment, and I realized I no longer wanted to work with, look at, and analyze the old world of finance. I wanted to be a part of the new world of finance. I wanted to use my skillset and understanding of the emerging markets, knowing the financial services of the old world, and the experience of the Tinkoff journey to create an investment vehicle. An investment fund focusing on the future of finance, and fintech in emerging markets, resulting in VEF in 2015.
Why is VEF focusing on the fintech market?
A big reason why we decided to focus on fintech was because of my history and skillset in emerging markets. Fintech is one of the hottest new economy in the world, and it was a very natural area of finance to look into. However, the fintech market is not one-dimensional, we are looking into financial payments, credit, and investments, but we are also looking at different mobility companies from a payments angle. We are looking at health and insurance companies, education with student loans, and other innovations in the field. We are broadening the definition of what pure fintech means.
What does being an active investor mean for VEF? What are some impacts VEF has had on private emerging fintech companies?
As an investment vehicle, we tend to take fewer but bigger bets on emerging fintech companies. On average, we tend to hold around a 10% stake in the business we invest in, and we are on the advisory boards. This means we don’t participate in passive investing, we actively put serious capital to work, and we are sitting on these boards to help these companies grow. Using our previous expertise and knowledge from other fintech startups in different regions: Brazil, India, Egypt, and Russia, for example, we can cross-pollinate ideas and knowledge to these new investments to help them evolve and grow. Companies we have invested capital into in the past that have a finished product and have gone through the whole journey with their IPO and beyond can help share their war stories and ideas to our newer startup investments. There is a lot of data involved, and we are able to obtain that data from 20+ years of work from emerging markets and financial services.
What are some goals for the future regarding VEF?
Generally, we are constantly looking for bigger, better, faster. It has been a long journey so far, going on six years, but we are in no rush. In fintech, among other fields, you have to build yourself gradually. You wake up one day, and you made it, but it is a function of incremental days, weeks, months, and years it took to get there. It doesn’t happen overnight, but we have been able to deliver 25 to 30% per year over the past six years. We have had a couple of very big exists, and we have invested across multiple emerging markets. Plenty of great success stories have come from Brazil, Mexico, India, and Russia, and we have got some great investors in our CAP table who have been supporting us for this journey. To look ahead we want to continue to extrapolate, pick winners, and get our capital to the right names and the right evaluations. We want to from our $500 million dollar company into a multibillion-dollar enterprise, while also educating ourselves as we go.
Dave Nangle is the Managing Partner and CEO of VEF. With over 20 years of experience in emerging markets and fintech, Dave has worked for ING Barings Bank in London and Renaissance Capital in Moscow before completely transitioning into investment where he now manages a fund focusing solely on fintech and finance innovation. Dave currently resides in Sweden where he continues to advise emerging fintech companies around the world.
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