Jonas Wenke, Principal, CommerzVentures
Today we're meeting Jonas Wenke, Principal at CommerzVentures, an early-stage fintech fund, backing startups from the Series A onwards with tickets of €5-20m across Europe, Israel and the US.
Over to you Jonas - my questions are in bold:
Who are you and what's your background?
After studying international business and finance across Switzerland, the Netherlands, China and Brazil I went into investment banking, joining a leveraged finance desk to originate and structure buyouts for private equity clients across Europe.
Three years in, however, the job became repetitive and the companies I worked with felt very “old world”. I wanted to spend my time with the “new world”, i.e. technology companies shaping the future. That’s when I joined CommerzVentures, where I could apply my skills in a much more exciting environment.
What is your job title and what are your general responsibilities?
I am a Principal at CommerzVentures, which means that I have various responsibilities. The most important one is sourcing great deal opportunities, managing them through due diligence and IC and working with the founders post-investment. On top of this, I am involved in developing new investment theses, representing the fund at conferences and in the media, and driving forward strategic firm building initiatives.
Can you give us an overview of the fund – what is the origin story?
CommerzVentures was launched in 2014 as a specialist early-stage fintech investor. We are partner-owned and returns-driven, and our strategy has not changed much since our launch. We focus on Series A and Series B stage investments across Europe, Israel and the US, where we invest between €5-20m. We are currently deploying from our third fund, a €300m vehicle.
Founders appreciate us for being down to earth and modest, all the while being experts in our field with deep expertise and a broad network within fintech and financial services. Our track record speaks for itself, having partnered with companies like Marqeta, eToro, Mambu, ManyPets, Volt, Onafriq, lemon.markets, ClimateX, etc.
What attracted you to the firm? How has your role evolved over the time you’ve been there?
I was attracted to the firm because of its mandate and team. I enjoy working in small and dynamic teams, and I loved that CommerzVentures had such a broad and international mandate. It makes for an interesting environment, where on a single day I might speak to founders in London, Stockholm, Tel Aviv and New York. Also, I get to travel to many of these places to build personal relationships with founders.
I joined the team eight years ago as an Associate. In that role, I learned a lot from the partners by supporting them in their deal-making. I was then promoted to Senior Associate and eventually to Principal. Now, I enjoy the autonomy I have in developing my own investor identity and pursuing the themes and deals that I believe in.
How has the FinTech investment landscape evolved during your years working in the sector?
When I became a fintech investor in 2016 people asked me why we would specialize in such a tiny vertical. Now I get asked whether we specialize in certain subsectors in fintech because the whole category has become so broad.
Another interesting development is how competitive and fast the industry has become. In 2016 there were very few fintech investors, and processes easily took six to eight weeks to term sheet because founders needed to do a lot of education. Now, processes take 2-3 weeks as fintech is better understood and more capital is available.
You’ve mentioned cross-border FinTechs as a key theme – what specific friction points or opportunities are you seeing in this space?
Reading the news these days one quickly gets the impression that the world is falling apart. A protectionist rhetoric is dominating politics, armed conflicts are breaking out or looming, climate change is challenging global supply chains. It seems like that fragmentation is replacing globalization.
However, that is just not true. The data shows that more people, goods, and money than ever are crossing borders every year. The world is – in fact – still growing closer together. Global trade is alive and well, but it is facing a lot more friction from the above-mentioned developments.
At CommerzVentures we understand that complexity and friction is always a good breeding ground for tech startups. And that smart founders will be able to turn the headwinds faced by the global economy into their own tailwinds. Their products can touch everything from cross-border payments, supply chain risk management, compliance operations, payroll and tax to treasury and even investments.
If you are building in cross-border, we would love to speak to you.
How do you view the relationship between incumbent banks and FinTech today? What’s your view on how things are evolving? Do you see it migrating from competition to collaboration, or is it still very much nuanced?
Banks are still difficult partners to work with. Their processes are slow, they are ultra risk averse, and most have not yet figured out how to effectively experiment with new technologies and startups. However, they are getting better at understanding that strong technology is the foundation for future success, and that their key skill is not software development. So, a willingness to partner with young startups is growing across the board.
What is your approach to sourcing good quality deal flow?
The highest quality deal flow comes through my personal network of other investors, fintech founders, operators and our venture partners. However, I also proactively reach out to startups that fall within my various investment theses (e.g. institutionalization of crypto, product-led fintech, cross-border fintech).
Beyond capital, what specific value does CommerzVentures offer to portfolio companies that differentiates you from other FinTech investors?
Every founding team has different needs, so we structure our support around these. Importantly, we don’t force teams into a structured platform program and expect them to attend all kinds of distracting activities.
We invest into companies as a team, and we are all-hands-on-deck with our individual networks and experience when supporting our founders. We have a 10+ year track record of investing purely into fintech and learned a lot of lessons along the way. We connect our 40+ portfolio companies on specific topics to facilitate knowledge exchange, and we bring in our various venture partners to support founder teams on specific strategic initiatives.
How important is the founder's background in financial services when you evaluate FinTech companies? Do you prefer founders with banking experience, technical backgrounds, or a specific mix?
We look for outstanding founders first, and industry experience second. We have partnered with 20-year-old college dropouts building capital markets infrastructure and also with 45-year-old payment veterans. What matters are the founder personalities and the team composition. Industry experience can be a plus, but not always.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
I would use that wand to declutter and simplify regulation in Europe and the US, so that fintech startups can pursue ambitious projects without having to spend several months and many millions in capital on licensing before testing their ideas on the market.
What is your message for the larger players in the Financial Services marketplace?
Larger players need to pay very close attention to GenAI and how it threatens their existing revenue pools. For the sake of their own competitiveness, they should also lean in and implement AI wherever they can to streamline operations.
Can you highlight some recent portfolio companies that we should be following?
Keep a close eye on lemon.markets, a modern securities brokerage and custody platform. Their infrastructure powers the trading and investing products at neobanks and wealth managers. The team, which is led by a 23-year-old outlier founder, recently signed a number of high-profile deals that we will be announcing soon!
Another recent investment of ours is Unique, the leading verticalized AI platform for financial services in Europe. AI is on everyone’s roadmap today, and Unique has managed to attract institutions like Pictet Group, Metzler Bank, or Julius Bär as clients. Look out for them becoming the go-to European platform for financial services AI.
For founders keen to talk with you about investment, what’s the best way of connecting with you and the team?
The best way to reach us is through LinkedIn or direct email outreach. Your chances of winning our attention is higher if you draft a personalized and engaging message!
Where do you get your Financial Services/FinTech industry news from?
- Finextra for sober news,
- Sifted for more hype-y ecosystem news
- The Block for crypto updates
- This Week in FinTech for comprehensive industry news
- FXC Intelligence for deep dives into cross-border topics, and
- Tom Tunguz for short but interesting generalist tech thoughts
Can you list 3 people you rate from the FinTech and/or Financial Services sector that we should be following on LinkedIn, and why?
- Simon Taylor is (still) the king of fintech content
- Rex Salisbury for some US-centric content
- Jason Mikula to keep tabs on the scene
What FinTech services (and/or apps) do you personally use?
I use a lot of them and sing up to new apps and services all the time. Just to mention a few, I use Revolut to keep track of the leading European neobank. I am also a fan of the UX of Trade Republic for investments. For crypto I use MetaMask, but also want to shout out Swissborg, a company run by a friend of mine whose journey is absolutely crazy.
What's the best new FinTech product or service you've seen recently?
I am quite impressed with Due Network, a London-based company building a cross-border payment network on stablecoin rails. Their product makes payments into and out of emerging markets 10x faster and cheaper than SWIFT-based alternatives. And that is the type of use case I love to see in crypto: an accessible product with real-world applications that is significantly better than fiat-based alternatives.
Thank you very much Jonas!
You can read more about Jonas on his LinkedIn Profile and find out more about his company at www.commerzventures.com.