Fintech
5 lessons from Super Venture
The main conference of Super Return and Super Venture takes place every year in Berlin.
Getty Images
Last week I attended Super Venture in Berlin, one of the world’s leading venture capital fundraising conferences. The event provided a unique opportunity to gauge the pulse of the venture capital (VC) fundraising market and, by extension, the future health of the startup landscape at large and, for readers of this column, the ecosystem fintech in particular. The event brings together limited partners (LPs), providers of capital to venture capitalists, and investors to discuss the latest industry trends and challenges.
Here are five key takeaways from the conference that are poised to shape the venture capital and fintech landscape.
1. Optimism is (slowly) coming back
If 2023 was a year of stasis, 2024 appears to be a year of renewed optimism. While the excitement surrounding AI is palpable, many speakers at the event highlighted broader changes and a marked resurgence of enthusiasm.
Recent analysis by Kauffman Fellows indicated that VCs expect uptake to expand this year (56% of Silicon Valley managers and 52% globally), a sentiment echoed by LPs who also expect increased activity. This optimism signals a positive change for the sector, encouraging a more dynamic investment environment.
Many of the speakers during the event noted this show but positive market trend.
2. This optimism is spreading beyond traditional venture capital centers
Commenting on the European ecosystem, in a panel Jessica Schultz of Northzone highlighted how the European ecosystem has evolved. Previously concentrated in cities such as Stockholm and London, the landscape now includes a much wider range of hubs.
This phenomenon is obviously not limited to Europe.
In 2013, only four cities had produced unicorns; today, over 150 cities boast these high-value startups, many of which have succeeded multiple times. Fintech exemplifies this trend, with epicenters spanning New York, London, Toronto, Sao Paulo, Singapore and Tel Aviv, creating both global contenders and local champions.
Jason Gray, co-founder of Pioneer Fund, based partly in Canada, explained it to me: “The discussions at SuperReturns made it clear that the geography of innovation is expanding, allowing more cities to become key players in the venture landscape capital”.
In the audience were LPs from every corner of the planet, including many looking to invest in local champions.
3. However, not all businesses are the same
Both LPs and VCs highlighted some preferences.
The strongest preference was for the fundamentals of the underlying companies in the portfolio. The excesses of 2021 have led to painful corrections, prompting a shift towards more measured strategies.
The consensus now favors startups that embody the “Camel” model.—companies based on solid unit economics, managed consumption rates and a long-term perspective. This focus on sustainable growth and prudent financial management is expected to define the next wave of successful startups.
But other preferences were more specific to the LP. The conference sessions delved into topics ranging from trendy ones: artificial intelligence, defense or climate change, to specific ones, such as geographies, corporate venture capital, etc.
GPs who meet these specifics may be in a better position to approach the market. Michael Ströck, founding partner of Allocator One, told me: “First-time GPs need to carve out their own niche. It’s hard to make money by simply rehashing old playbooks used by established brands in venture capital. We’re excited to see there are lots of new GPs with really fresh and authentic allocation strategies at the moment.”
4. Where venture capital is going: specialized and experienced
Jonathan Biggs of Top Tier highlighted in a panel the importance of specialization in raising capital in this market and moving forward in an increasingly competitive landscape.
For example, fintech and trade enablement are large markets with significant specialist investors. Many of the top players are industry specialists. For example, the investor in second place on this year’s Midas List (an industry publication about leading venture capitalists) is a fintech investor.
While new fund formation has exploded in the past, many LPs have emphasized the need for experience as a key element of their investment decisions. Two types of experience were particularly valued: a long-term track record at a larger venture capital firm and operational experience, particularly with a focus on value creation. By contrast, “access” managers – those built to co-invest alongside top local funds – have seen their value decline as capital has become scarcer.
Frederic Court of Felix Capital discussed the need for VCs to think of their funds not just as investment strategies, but as unique products for LPs that stand out in a crowded market. Generic fund strategies are expected to be much more difficult to raise given the competition in the market. Jason Gray amplified this sentiment: “SuperReturns highlighted the importance of VCs distinguishing their funds in a crowded market. To remain competitive, unique value propositions have become essential.
5. Tips for successfully raising capital
The advice to GPs has consistently been to continue fundraising. Many primary care physicians have described hundreds and sometimes thousands of first encounters with LPs. This capital raising season is particularly challenging.
Perhaps nowhere has this been felt more than by emerging managers. The emerging manager market has fallen 97% from 2021 highs.
Yet many LPs described continued dedication to the space and the unique benefits that can be gained from partnering with new firms (beyond investment performance proper). Mohadeseh Abdullahi of Molten Ventures shared insights into the first-party data the firm collects through its fund of funds program, suggesting that strategic approaches can still uncover valuable opportunities.
Ultimately, perhaps the only driver of future VC fundraising will be DPI – or realized returns. Without liquidity returning to LPs, fundraising will continue to be slow (as they will be shortchanged on allocation). One solution covered in multiple panels was the use of secondary instruments, i.e. selling existing investments to realize returns and provide liquidity. This strategy allows companies to get money off the table without necessarily offloading their best assets. The importance of DPI, or realized return, was highlighted as a key metric for raising follow-on funds.
—-
In conclusion, the Super Venture conference highlighted a cautious but optimistic outlook for venture capital and fintech ecosystems. The industry is adapting to new realities by focusing on specialization, capital efficiency and strategic differentiation. As LPs and VCs navigate this changing landscape, these insights will be crucial to shaping their strategies and ensuring long-term success.