The Fintech Innovation Lab New York recently sat down with Stu Ellman, Founder & General Partner at RRE Ventures on the value of the FinTech Innovation Lab
As a VC participating in the FinTech Innovation Lab, how do you work with the companies that participate in the program? How do you see your role as different from the financial services companies?
At RRE, we see our role as mentoring companies in the program as they think about capital-raising strategies. Unlike a financial services company, we are not focused on experimenting with products or navigating a proof of concept. As a venture capital firm, we are focused on providing guidance around venture capital fundraising. We provide advice to participating start-ups on how to pitch their company, how to improve their fundraising deck, how much money to raise, and who might be the best venture capital partners for their circumstances.
As a VC, why do you participate in the Lab? What value does it generate for you?
The Lab is an extremely rare example of convening leading financial and insurance institutions in a meaningful way. Convincing the right corporate partners to collaborate is a difficult proposition at the offset. That said, the Lab not only ensures that the leading financial and insurance institutions are at the table, but also facilitates their engagement with the selected companies, such that they receive critical feedback to refine their products—we wanted to be involved from the start. From our perspective, we get great value from the Lab by seeing deals we might not otherwise have, seeing enterprises’ reactions to specific companies, and learning about market trends from the enterprises themselves.
From the start of the Lab to Demo Day, do you see a change in the fintechs? Their level of sophistication? The way they market themselves?
Absolutely. Through working with the Lab’s financial and insurance institution partners, the fintechs realize collaboration with their potential clients is necessary to solve specific problems. This relationship steers their focus to the user—rather than just the technology—and developing a return on investment model that will enable them to succeed.
How does a fintech’s participation in the Lab alter the way you evaluate them?
We appreciate when a company has gone through the Lab because we can remove an extra layer of diligence that is usually necessary. It is also great validation that the company has had the opportunity to collaborate with a corporate partner on cutting-edge technology and can successfully do so in the future. The team at the FinTech Innovation Lab also does a great job in selecting companies and founders who are open to mentorship and feedback.
Tell us about exciting financial services companies in which RRE has recently made investments. Is there anything you would like fintechs to know?
Right now, we are specifically interested in meeting companies in the fintech and insurance space that support technology for large institutions and companies focused on financial services for aging populations.
We have recently backed a number of fintech companies we’re very excited about. Net Abstraction, which went through the Lab and has successfully grown since, obscures network pathways to protect enterprises from cyberattacks. Novo Bank is a challenger to traditional banks targeting startup banking. Bread offers white-label financing for online merchants. Spring Labs is building a decentralized network to underpin transparent, secure, and efficient financial services.
We are always looking for more great companies!