Diverse manager Fiat Ventures today announced it has raised $25 million for its debut venture fund to invest in early-stage fintech companies broadening financial access and inclusion.
The fund, which opened with a target of $15 million, was anchored by Invesco Private Capital and received commitments from a number of family offices and founders in the fintech industry including Bestow co-founder Jonathan Abelmann, Mulberry founder Chinedu Eleanya and Chime founding team member Kyle Daley, co-founder and general partner Alex Harris told Venture Capital Journal.
“We look at this as validation for what we built and our unique edge,” Harris said. “I’m grateful for the LPs that have joined us and the founders who’ve given us this opportunity. It’s a cool moment, a special moment.”
Founded in 2021 by Harris, general partner Drew Glover and managing partner Marcos Fernandez, Fiat Ventures is the venture investing offshoot of Fiat Growth, a fintech growth consulting and marketing firm co-founded by Harris and Glover in 2018.
Fiat Ventures has already completed 25 investments, of which it led five, including the $29 million Series A round in Copper Banking, a digital banking service designed for teens and a client of Fiat Growth.
With the addition of Fernandez, Fiat Ventures was able to distill the evaluation process from Fiat Growth into a venture investing model that gave the team “the ability to see around corners that a lot of early-stage venture funds aren’t able to because of all the in the trenches, on-the-ground work we get to do with the company prior to investment,” Glover said.
Growing up in Stockton and Oakland, California, respectively, Harris and Glover founded Fiat Ventures with the primary goal of serving the portion of the population who need the most help with financial literacy and education. That focus, the firm said, has allowed it to outpace the industry in diversity metrics, with 54 percent of its portfolio made up of underrepresented founders, 22 percent female founders and 32 percent minority founders.
Those numbers compare to the venture industry averages of 13.7 percent underrepresented founders, 10.7 percent female founders and 3 percent minority founders, according to a report from Diversity VC and RateMyInvestor.
“We’ve never had any type of requirement around how many minority-focused founders we invest in, but really through the organic focus that we have it’s just naturally happened that a large percentage of our portfolio is companies and founders that, in some cases, can go overlooked,” said Glover. “As we all know, networks breed networks, and so we’re constantly making sure that we stick true to understanding the socioeconomic spectrum and making sure that we give everyone the attention they deserve.”
The fund employs a standard 2 percent management fee and 20 percent carried interest. It is not as focused on check size as it is on ownership percentage, where it seeks a 2 to 2.5 percent ownership stake for its first check, Glover said.
While Fiat plans to make a few more investments from the fund, the majority of its capital will be reserved “to double down on the companies we believe the most in, the ones that we see as the outright winners on fund returns,” he added.