Vesey Ventures closes on $78M debut fund to support early-stage fintech startups

Image credit: Vesey Ventures / Founding Partners Lindsay Fitzgerald, Dana Eli-Lorch and Julia Huang

After working together for nearly a decade, three former CEOs of Amex Ventures branched off in early 2022 to form their own fintech-focused venture firm, Vesey Ventures. The trio had made early stage investments in more than 50 fintech companies, including the likes of Stripe, Plaid, Melio and Trulioo. During that time, they also helped develop over 100 partnerships between startups and financial institutions.

Their goal was to take the 10 years of experience investing through the venture capital arm of one of the world’s largest credit card companies and apply it first-hand to new early-stage investments – but with a twist. The firm says the intention is to move beyond term sheets to issuing tailored “Strategy Sheets,” which outline how Vesey Ventures aims to leverage its network “to act as a company’s first business development team.” In other words, they want to invest in early-stage fintech and enabling technology companies “where opportunities for early partnerships with financial established players exist”.

And today, the firm — formed by founders and friends Dana Eli-Lorch, Lindsay Fitzgerald and Julia Huang, who all left AMEX Ventures at the same time in late 2021 — announced the closing of its $78 million debut fund. They named the firm Vesey Ventures after the street where American Express is headquartered in New York. (They declined to say whether Amex is a limited partner in the new fund.)

The feat is especially impressive considering that, according to PitchBook data recently cited by The information, “Women-led venture firms in the US have raised just $74 million this year.” This means that at the close of her debut fund, Vesey has effectively raised more than all women-led venture firms in the US combined and more than doubled the amount raised by women-led VC firms so far in 2023.

Vesey’s self-described mission is to support companies that are “transforming financial services” from seed to Series B stages. It plans to invest $1.5 to $3 million as initial checks, and larger amounts for follow-ups. Based in the US and Israel, the fund has so far supported five startups, including Coast, Cyrus, Grain, Equi and Proper.

Vesey defines fintech in its broadest sense – meaning they invest outside of traditional financial services categories like consumer and B2B, Eli-Lorch said in an exclusive interview with TechCrunch. It also looks at vertical software, embedded fintech, the future of commerce and the infrastructure layer – basically cyber security, risk and compliance, or, as Eli-Lorch describes it, “all the back office operations of financial services”.

“Another lens we take is basically any type of technology software innovation that sells into financial services, so either financial institutions or fintechs,” she said.

Bridging a gap

The founding partners all agreed on one thing when they started the new firm: that it was clear that startups with better business development strategies performed better.

“And that is ultimately the insight we built a thesis on, says Fitzgerald. “In this industry, this development is not a ‘nice to have’, it is a ‘need to have.'”

“The traditional VC model can be limiting, so we saw an opportunity,” she added. “We took the best of what was clearly working – business development, our team, our network – including other VCs and angels, and expanded it … to bridge the gap between companies that need new technology and startups that are building the new technologies .”

Today, the partners recognize that an interesting phenomenon is taking place – senior executives in what they describe as “gen one” fintech startups. And despite the recent volatility the fintech space has seen over the past couple of years (funding was down significantly in 2022 compared to its heyday in 2021), Vesey is naturally “long-term bullish” on fintech.

“You only have to look at the last quarter of volatility and upheaval in the financial industry to really reference that there are many, many issues that still need to be resolved,” Huang told TechCrunch. “Having said that, things are cyclical … it’s like when the tide goes out, you see who’s kind of naked right? And for us, that’s the infrastructure layer … that we’re always helping our companies build and reinforce so that they can become reliable financial institutions in the long term. It has become a very important pillar and now it is back in fashion.”

Huang also acknowledges that in 2021 the trio pulled back from investing “because it got way too frothy.”

“Each company was kind of a ‘me too company,'” she recalls. “So we decided to take a step back and think about our value proposition and what has legs and what doesn’t.”

Vesey intentionally chose to be on the ground in Israel (Eli-Lorch is based there), a market the partners see as home to one of the world’s fastest growing technology hubs, with many companies focused on fintech, enterprise software, cyber security and data. The goal is to help startups collaborate, expand and commercialize in the United States

The new firm remains mum about its LPs, saying they only include seven “very prominent financial institutions,” as well as founders and executives from incumbent financial firms, family offices and institutional investors.

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