1Mby1M Virtual Accelerator Investor Forum: With Giuseppe Donvito, Partner at P101 Ventures (Part 3)

Giuseppe Donvito: When we analyze a company, we always apply our proprietary framework. We are obsessed with the quality of the founding and management team. This is the main point for us. We thought the management team could be the right people for this kind of deal.

At the same time, given our knowledge of the FinTech sector, we thought that the company had significant improvement for growth. They’re one of the largest in Europe in embedded finance. They were always able to navigate the ups and downs. It can’t always be positive. The founding team built a resilient top management team. Even in difficult times, they were able to find the solution. They proved to be resilient.

As you can imagine, we are expecting big things from them. We also helped the company in terms of introduction of new customers and supporting the management. We sometimes help in business development, hiring, and M&A.

Sramana Mitra: This is from southern Italy?

Giuseppe Donvito: This is from Milan.

Sramana Mitra: What do they do specifically in FinTech?

Giuseppe Donvito: They started as a matchmaking lending for SMEs. They raise money from private, retail, and institutional firms. They developed an algorithm. There is some software running behind using big data and artificial intelligence that helped the matching between lenders and borrowers. Then they raised some credit funds.

What we realized after a certain point was that the real value of the company was the tech. They slowly repositioned to Lending-as-a-Service or Platform-as-a-Service providing the tech stack for financial institutions. It is what we are doing right now. It’s a Lending-as-a-Service that helps financial institutions to lend using big data or advanced credit scoring.

We are complementing the banking system into segments that banks either can’t or don’t want to do for profitability reasons. We are filling this gap. We are now entering new sectors of the embedded finance system. The company is generating in excess of 40 million euros at the moment.

Sramana Mitra: The company is catering to all of Europe?

Giuseppe Donvito: It’s just Italy, but we are now considering an expansion.

Sramana Mitra: It’s generating 40 million euros a year just in Italy. That’s fantastic!

Giuseppe Donvito: With EBITDA positive.

Sramana Mitra: You mentioned exit. Tell me about what is happening in Italy in the tech sector vis-a-vis exits.

Giuseppe Donvito: I’ll mention two things. One is unicorns, even though I don’t like the concept. Then exit. We like exit. First of all, it’s tangible.

Sramana Mitra: Exits are real; unicorns can be a myth.

Giuseppe Donvito: Exactly. You have liquid unicorn and illiquid unicorn.

Sramana Mitra: There are real unicorns and fake unicorns.

Giuseppe Donvito: In Italy, you see the same progression you see in more advanced ecosystem. We are finally generating unicorns. There are a couple of cases with the one billion plus valuation. In the last five years, P101 has been one of the key players. We generated exits. We gave back money to our investors. On the other side, we are proving that you don’t need 20 years to realize.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Giuseppe Donvito, Partner at P101 Ventures
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