“The Good Guys Will Make it Happen” is the slogan of Life.SREDA VC and it means that people are the most important element in the startup/venture world. Igor Pesin is the Partner and Investment Director at Life.SREDA VC and InspirAsia, a global FinTech-focused VC fund and accelerator respectively. A serial investor with several successful investment exits, Igor is a firm believer of building a boundaryless FinTech ecosystem and financial inclusion, and he will share more in this interview.
Tell me a little bit about yourself.
I am responsible for the investments made by my company throughout their entire life cycle, and has executed more than 20 FinTech investment deals across the world – in the US, Europe, CIS and Asia (Simple, Moven, Fidor, SumUp, Anthemis, Lenddo, Ayannah to name a few). Among those investments, Life.SREDA has executed 7 exits through M&As and secondary deals.
I am also a Board/Advisory Board Member at SumUp (Germany), Allset (US), Fastacash (Singapore), SoftPay (Vietnam), Scorista (Russia), Lenddo (US), Ayannah (Philippines), Mobikon (Singapore), Yolopay (Singapore).
From June 2016, I also serves as an interim CEO for Life.SREDA’s strategic project in Asia – BAASIS (www.baas.is), headquartered in Singapore, which aims to become the first Pan-Asian open-API bank-as-a-service platform and designed to address main challenges of FinTech in Asia and create infrastructure for the whole industry.
What is your business venture about?
Life.SREDA acts as a VC investor and ecosystem builder in the FinTech space, currently with major focus on South-East Asian market. We provide VC funding for seed, series A and B FinTech startups in Asia, as well as to companies from Europe and the US, which want to expand their business operations to Asia.
For large clients (banks, enterprises, government bodies etc) we are providing not only VC fund management services, but also consulting and advisory. Besides funding, Life.SREDA provides the whole spectrum of support for young companies: mentoring, coaching, strategic advises, legal support, shared space in our Fintech co-working (free of charge).
Beyond direct work with startups and our investors, we are trying to build ecosystem and provide social impact through hosting events, workshops, lectures, inviting global FinTech stars to Singapore etc. We also share our 5-year old experience and knowledge in FinTech industry through our analytical articles and materials, own blog FintechRanking.com and famous semi-annual FinTech research “Money of the Future”.
What is your mission at the outset?
Our mission is to build FinTech ecosystem, where all parts are well-connected and support each other’s growth and development in a form of effective partnership: between entrepreneurs, startups, mentors, investors, banks, enterprises, regulators and government bodies;
We also believe that financial inclusion is the major mission for all players in FinTech industry in Asia, and this is one of the key reasons why we relocated to Asia in 2015. Unbanked markets provide the highest opportunities for FinTech players worldwide;
Another goal for our company is to establish digital bridges between different parts of the worlds, based on our experience and network in the West and the East. FinTech is a part of a digital world, which should not have any regional boundaries.
How did you get your idea or concept for the business?
We started almost 5 years ago as a digital arm of large financial institution in Russia with aim to incubate and accelerate innovations “in-house”. As soon as we realised that innovations can’t be effectively grown within big organization, we made a decision to spin-off Life.SREDA as a stand-alone independent venture capital business.
Non-corporate VCs have several important advantages such as agile “startup” culture and atmosphere, effectiveness of processes and operations, business motivation of the team, and it provided us opportunity to develop much faster and more successful.
Due to this flexibility and speed, we realized it in the right moment that the most potential for FinTech industry will be here, in Asia, thus, relocated to Singapore in 2015, to explore these opportunities. Without this “agility”, still being a part of corporate world, we would never be able to make this right movement so fast and effective.
What is unique about your business?
From the beginning we tried to maintain in our company very friendly and agile culture and atmosphere. All our team members are quite independent and self-motivated, which provides us ability to avoid bureaucracy, slowness, closeness and all other attributes of corporate routine. Historical slogan of our company is “The Good Guys Will Make it Happen” which I believe reflects our uniqueness, because in the startup/venture world the most important is people, not processes, operations and other things, which are mainly important in corporate world.
Who do you sell to and how do you get customers?
We have 2 types of “customers”:
– existing and potential LPs (investors) and partners, which are mainly financial institutions and corporates (banks, funds, financial holdings, telecoms etc) which are looking for strategic value in FinTech for their core business, as well as financial return on investments. Our role here is not only to be effective VC fund managers for them, but also to advice and consult on digital strategy and transformation.
– portfolio companies, which we’ve already invested in, as well as other FinTech startups that we could consider for investments in future, who are seeking from us funding and strategic support for their business growth
Currently we get our “customers” mainly from the network – word of mouth is our main tool of “acquiring customers”. References from our previous partners, friends, entrepreneurs allow us to reach more and more new people and companies, like a snow ball. Other ways are participating in conferences, analytical articles in media, our FinTech research “Money of the Future” etc.
Why will customers stay or do repeat business with you?
As I mentioned previously, venture business is mainly about people, like a marriage. It’s a very long-term, strategic play and you have to always very carefully choose with whom you would like to jump into this journey. It requires a lot of mutual assessments, both “technical” – operational, financial, commercial and legal, as well as “emotional” – do you have common chemistry, values, goals and hopes.
And as soon as you made this decision, you stay with these people for many years. Of course “marriages” can be unsuccessful, but in most cases we are able to build sustainable and successful long-term relationship with our partners. Certainly you have always prove that you are running the business in a right direction by showing concrete results.
Large corporates evaluate us by number of successful strategic investments and exits with high financial return. Startups evaluate us by real impact that we bring to their businesses. If you are a “good guy” and you show real business performance, your customers will definitely support you and stay with you.
What have been the biggest obstacles?
We have certainly faced dozens or hundreds of small and big obstacles during our way. I would name just 3 of them, which came first to my mind.
At the beginning nobody believed in the future of FinTech industry –it was only a small portion of VC investments and almost nobody was fully-focused on it like we were, that is why it was really hard to convince our first investors to believe in FinTech itself and its enormous potential.
Second major challenge was to start investing outside Russia and get an access to “star” investment deals on the FinTech market, which was really limited with only few good companies. It’s not a secret that Russia doesn’t have the greatest reputation in the world due to political and economical reasons, and even successful VC funds with Russian-origin like DST (which has already invested into Facebook, Alibaba, AirBnB, Lending Club and dozens of other unicorns) initially faced same problems outside Russia like we faced. We spent a lot of energy and efforts to convince people that we are not just a “wallet with money”, but investors who bring value, expertise, knowledge and just a good partners for startups.
Third major obstacle was to move all our operations and HQ to Asia – market here is totally different, with different people, clients, start-ups, technologies, rules and overall culture. Last 2 years we spent half of our time just for traveling across Asia to meet people and build our network here, explaining who we are, what we do and what our plans.
I would say that building sustainable VC business is same difficult as to build a successful startup – it’s a journey with many-many obstacles, uncertainties and fears, which can be overcame only by strong team with common values and vision.
If you had one piece of advice to someone just starting out, what would it be?
In our office we have a drawn quote of Master Yoda: “Do or do not, There is no try”. In venture business you have to strongly believe in what you do, should not be afraid of uncertainties and be positive whatever happens around. Like with Life.SREDA example, we came to Fintech industry which basically didn’t exist at that time, with almost zero experience in FinTech venture space, but with absolute belief in what we want to do, why and for whom. That helped us to overcome many problems and challenges on this unpredictable journey.
Who is your biggest inspiration or drive to do what you are doing?
The beauty of being in tech venture industry is that you are always surrounded by great people, great minds, great companies. 4-5 years back we just read inspiring stories about raising stars in developed world (like Square, Simple or Lending Club) and emerging markers (M-PESA, Alipay or Lenddo) and then we got a chance to know them in person and even participate in their business. All start-ups are inspiring us everyday – they think differently, look at the world and business differently, and their energy and ambitions are the most inspiring part of VC business, from my point of view.
What’s next for you and forLife.SREDA?
Venture world by definition is unpredictable, so you can’t plan for many years ahead and forecast what will really happen. We just have goals, vision and most importantly – beliefs.
To be more specific about Life.SREDA, we plan to continue our expansion across Asia, increasing our footprint at major markets, expanding our network, customer base, capital and portfolio under management, and certainly preparing good exits with high financial return. This year we’re planning to significantly increase our presence in Malaysia and South Korea, while further developing our operations in Singapore.
We are starting to explore new market niches such as blockchain, insurtech and open banking. Besides investments, we are stepping into operational role, when we feel that it’s really necessary, for example currently I oversee as an interim CEO our incubated company BAASIS, which should become a strategic infrastructure platform for our portfolio companies as well as for other FinTech startups in SEA region.
Many really exciting things are happening at the same time and that is why venture business is so unique and attracts the most ambitious and visionary people across the world.
Hock Lai has 18 years of experience in the financial industry, having performed roles in both business and technology. He graduated from the National University of Singapore (Real Estate), Nanyang Technological University (Infocomm Technology) and Nanyang Polytechnic (Fund Management & Administration).
He is also a Fellow of the Singapore University of Social Science, advisor to FinTech Startups and mentor to student FinTech projects.
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