Like most everyone else in venture capital, Ben Savage of Clocktower Technology Ventures has restricted his travel in the past year due to the pandemic.
But that doesn’t mean he isn’t looking abroad.
The firm today announced that it has launched its first venture fund to back financial services companies in Latin America. Clocktower Technology Ventures – the venture arm of Santa Monica, California-based alternative investor Clocktower Group – has already held a first close for an undisclosed amount. The strategy has a target of $25 million to make seed and Series A investments.
Savage, a partner at the venture arm, tells Venture Capital Journal that the firm made its first investment in Latin America about a year ago. Savage notes that the pandemic has since accelerated digital financial services worldwide – and particularly in Latin America, where there are a high number of mobile users that a new crop of start-ups are targeting.
“As 2020 evolved, it became clear that there are more and more great companies throughout Latin America,” says Savage. He notes that the firm has invested remotely so far, leveraging the digital tools that exist to help in relationship building and conducting due diligence remotely.
“We’ll resume hitting the road and travel down there when it’s safe to do so,” he adds.
Despite remaining remote for the time being, Clocktower Technology Ventures has aspirations to be active in the region. Savage says the firm’s new LatAm fintech fund has already made four investments. He anticipates the fund making a deal every three weeks or so, and estimates that the new fund will make about 40 deals.
“There is no shortage of quality start-ups and entrepreneurs in Latin America,” Savage says. He notes that a number of new companies are being spun out of larger tech companies in the region: “This is great. We’re seeing a range of entrepreneurs and they have learned the playbook of how to start great companies.”
The fund comes at a time when enthusiasm for investing in Latin America has been building, in spite of the pandemic. Coming off of a record-setting 2019, Latin America flexed its VC muscle in 2020 as investors remained bullish on the region’s opportunities. VCs in the space told VCJ late last year that they were feeling optimistic about their portfolios and felt they had returned to investing normally quite quickly.
Full-year 2020 figures from the Latin American Private Equity and Venture Capital Association are not yet available.
LPs are also enthused, according to Savage. The LatAm fund was partially backed by current LPs as well as new investors. Key investors include such institutions as Hirtle Callaghan, an outsourced investment office for family offices and institutions. Backers include hedge fund executives, such as Alan Howard, Philippe Jabre, Glen Kacher and John Burbank’s Passport Foundation, according to the firm.
Since launching in 2015, Clocktower Technology Ventures has a wide aperture for investing across multiple sub-sectors of fintech, including insurtech, personal finance, banking, payments and real estate finance. In all, the firm has backed 96 fintech companies in North America, Europe and Latin America.
The firm’s second flagship fund of about $70 million was raised in 2018 to make multi-stage investments in fintech.