Europe’s biggest fintech investor Index Ventures would not rule out putting cash into an initial coin offering (ICO) as the method of raising funds for startups continues growing in popularity.
“We haven't invested in one,” said Jan Hammer, general partner at the venture firm in London, who boasts UK fintech stars Transferwise, Funding Circle and Revolut, as well as Adyen and Robinhood in Europe and the US respectively, among his portfolio.
“We’re looking at it from the perspective of what is our business,” he told City A.M.. “Our business is to find great entrepreneurs and great businesses. So if there were a theoretical case if there was some great business we had to participate in…. that’s more a fundamental question rather than a question of principle.”
ICOs have attracted huge amounts of attention and investment, having raised several billions to date, but have also caught the eye of regulators. The US Securities and Exchange Commission (SEC) last week was forced to warn celebrities about endorsing what are also called token sales.
Index is the most active in the fintech sector in Europe, and third globally according to CB Insights, in a year when UK Investment is on track to hit a record amount.
And Hammer said it was “business as usual” when it comes to investing in the UK with Brexit.
“We look wherever good entrepreneurs live and wherever good businesses are, without any sort of prejudice. Having said that, if there were any regulatory impacts, of course it’s something we would look at and consider, but that’s on a case by case basis,” he said, adding that it was like any due diligence.
“It’s a factor to consider, not one to build around,” said Hammer. “We’ve never tried to second guess what regulators will do and so we’re not going to try and second guess what politicians will do as a basis for an investment case.”
And Hammer said he also believes that some startups among the new cohort of fintech startups will push their way towards financial services companies when it comes to valuations within the next decade.
“We believe not only will we see more billion dollar companies in this space, but $10bn companies” he said.