Fintech
14Peaks raises $30 million to support fintech and the future of work
Edoardo Ermotti, founder of 14Peaks Capital
14Peaks
“I was always much more interested in funds where I was one of 15 partners, rather than one of 100,” says Edoardo Ermotti, founder of the Swiss venture capital firm Capital of the 14 peaks, about his approach to investing as a former business angel and family office executive. “This gave you the ability to have more say in how the fund was managed and to support the portfolio companies.”
It’s an approach that Ermotti is now offering to investors in 14Peaks’ inaugural fund, which will announce today that it has closed on $30 million raised from a combination of family offices and high-net-worth individuals. In his role as general partner of the fund, Ermotti has deliberately sought to recruit a relatively small circle of limited partners – a select group with experience and contacts relevant to the portfolio companies and capital to offer.
“Each of the investors backing 14Peaks is globally successful in their own right, giving our portfolio founders access, through us, to this curated hub of vast experience and networks,” he explains.
Although the fund only formally closed this month, Ermotti has been raising money since 2022, when 14Peaks launched, and has already added 11 companies to the portfolio. The fund’s focus is on business-to-business software providers in two verticals: financial technology (fintech) and the future of work.
“We are interested in fintech because financial services is a very large sector with enormous potential for disruption by technology,” says Ermotti. “The future of work could be anything that changes how people in a company interact with each other or how two companies interact; it could be collaboration or data analytics, but it could also be HR platforms.
Early investments include a stake in Rain, the US fintech that works with employers to offer employees pay advances for hours already worked, and Threatfabric, a Dutch cybersecurity specialist. Both companies credit Ermotti’s team with offering more than just financial support.
“Since we met them, the team has rolled up their sleeves and been very active and proactive in transforming us into an organization that can truly scale into an emerging market,” says Han Sahin, co-founder of Threatfabric. Rain founder Alex Bradford adds, “14Peaks has placed us in high-value investor networks and enhanced our go-to-market plans by sitting down and helping us craft business development strategies.”
It’s an approach that Ermotti believes is best served by leveraging the strengths of 14Peaks’ limited pool of investors with relevant expertise. “It’s about giving our founders access to this pool,” he says. “It’s a benefit that we think attracts founders to us.”
In fact, Ermotti argues that many start-ups are now as focused on this type of investor support as they are on the size of the investment involved. Despite its relatively small scale, 14Peaks has led or co-led three of the 11 investments made to date.
With 30% of the fund reserved for potential follow-on investments, Ermotti expects to invest about $750,000 on average across 25 portfolio companies. Business opportunities will arise from 14Peaks’ existing network of contacts, founder referrals and, increasingly, outbound business.
Future plans include expansion into the United States. The fund has a mandate to invest on both sides of the Atlantic and the portfolio already includes several American companies, but Ermotti believes 14Peaks now needs a team on the ground in the US to support these companies. “This will also help us support our European portfolio companies, many of which are looking to expand into the United States,” he adds.