The Liquidity Question: Why It Matters Earlier Than You Think

Liquidity is often an afterthought, until it isn’t. Businesses, investors, and even individuals frequently overlook its importance The Liquidity Question: Why It Matters Earlier Than You Think

Liquidity is the financial world's silent guardian, invisible when present, catastrophic when absent. While most businesses and individuals focus on growth, returns, and profitability, they often overlook the fundamental lifeline that determines survival: the ability to convert assets into cash quickly without significant loss. This oversight has toppled Fortune 500 companies, devastated investment portfolios, and left countless individuals financially stranded.

Understanding liquidity isn't just about financial prudence, it's about recognizing that cash flow, not profit margins, determines who survives economic storms. From corporate giants to individual households, those who master liquidity management thrive while others merely survive, if at all.

The Silent Assassin of Profitable Businesses

The business graveyard is littered with companies that were profitable on paper but failed due to liquidity crises. A comprehensive study by the U.S. Bank revealed that 82% of business failures stem from poor cash flow management, not inadequate profitability. This statistic exposes a fundamental misconception: that revenue equals resilience.

Case Study: The Toys "R" Us Tragedy

Toys "R" Us exemplifies this principle perfectly. In 2017, the retail giant, with $11.5 billion in annual revenue and a dominant market position, filed for bankruptcy. The culprit wasn't declining toy sales or e-commerce competition alone, but rather the company's inability to service its $5 billion debt load amid deteriorating liquidity. The company had tied up capital in inventory and real estate while carrying unsustainable debt obligations, leaving no cushion for operational flexibility.

The lesson is stark: profitability without liquidity is a house of cards. Revenue can mask underlying financial vulnerabilities until external pressures, economic downturns, supply chain disruptions, or unexpected expenses, expose the truth.

The Working Capital Trap

Many businesses fall into the working capital trap, where success breeds failure. Rapid growth often requires increased inventory, extended payment terms to customers, and upfront investments in infrastructure. Without careful liquidity management, growing companies can become victims of their own success, unable to fund operations despite impressive sales figures.

Personal Finance: The Emergency Fund Imperative

The liquidity crisis extends beyond corporate boardrooms to kitchen tables across America. Federal Reserve data reveals that 37% of Americans cannot cover a $400 emergency expense with cash, forcing them into high-interest debt cycles that compound financial instability.

The 3-6 Month Rule: Your Financial Lifeline

Financial advisors universally recommend maintaining 3-6 months of living expenses in liquid assets, cash, savings accounts, or short-term bonds. This buffer serves multiple purposes:

• Prevents forced asset liquidation: Avoids selling stocks, property, or other investments during market downturns

• Maintains credit health: Reduces reliance on credit cards or loans during emergencies

• Preserves opportunities: Enables strategic moves like career changes or investment opportunities

The Psychological Dividend

Beyond financial protection, liquidity provides psychological benefits. Research from the University of Pennsylvania shows that individuals with emergency funds report lower stress levels and greater life satisfaction, even when controlling for income levels. Liquidity isn't just about money, it's about peace of mind.

Market Liquidity: The Investor's Ultimate Insurance

Investment liquidity separates seasoned investors from amateurs. While illiquid assets like real estate and private equity can generate substantial returns, they can also trap capital when liquidity is most needed.

The 2008 Financial Crisis: A Masterclass in Liquidity

The 2008 financial crisis provided a brutal education in liquidity's importance. Investors holding "valuable" mortgage-backed securities discovered that paper wealth means nothing if nobody will buy your assets. Meanwhile, those with cash reserves capitalized on the chaos.

The Numbers Tell the Story:

• The S&P 500 plummeted 57% from peak to trough (2007-2009)

• Investors with liquidity who purchased undervalued stocks generated returns exceeding 300% during the recovery

• Real estate investors with cash bought distressed properties at 30-50% discounts

The Liquidity Premium

Warren Buffett's Berkshire Hathaway consistently maintains massive cash reserves, often criticized as "inefficient" by analysts. Yet this strategy enabled Berkshire to acquire quality companies at discounted prices during the 2008 crisis and the 2020 pandemic. The "liquidity premium”, the cost of holding cash versus investing, pales in comparison to the opportunities liquidity creates during market dislocations.

Corporate Liquidity Metrics: Reading the Warning Signs

Businesses measure liquidity through several key ratios that reveal financial health:

Current Ratio (Current Assets ÷ Current Liabilities)

• Ideal Range: 1.5-3.0

• Interpretation: Measures ability to cover short-term obligations

• Warning Signs: Ratios below 1.0 indicate potential liquidity stress

Quick Ratio (Quick Assets ÷ Current Liabilities)

• Ideal Range: 1.0 or higher

• Interpretation: Excludes inventory, focusing on most liquid assets

• Critical Insight: More conservative than current ratio, better for cyclical businesses

Apple's Liquidity Mastery

Apple provides a masterclass in liquidity management. Despite a current ratio of 0.94 (seemingly concerning), the company maintains over $166 billion in cash and marketable securities. This strategic liquidity enables Apple to:

• Fund massive R&D investments without external financing

• Acquire companies and technologies opportunistically

• Weather economic downturns without operational disruption

• Return capital to shareholders through dividends and buybacks

 The Liquidity Optimization Framework

For Businesses:

• Cash Reserve Strategy: Maintain 3-6 months of operating expenses in liquid assets. This provides operational flexibility and creditor confidence.

• Credit Line Management: Establish revolving credit facilities before needing them. Banks prefer lending to healthy companies, not distressed ones.

• Receivables Management: Implement aggressive collection policies and consider factoring for immediate cash flow.

• Inventory Optimization: Use just-in-time inventory systems to minimize working capital requirements.

 For Individuals:

• Emergency Fund Construction: Build systematically, start with $1,000, then progress to one month's expenses, eventually reaching 3-6 months.

• Asset Allocation Balance: Avoid overconcentration in illiquid assets. Even real estate investors should maintain liquid reserves.

• Liquid Investment Vehicles: Utilize money market funds, short-term CDs, and high-yield savings accounts for emergency funds.

• Debt Management: Minimize high-interest debt that can quickly erode liquidity during emergencies.

The Liquidity Mindset: Beyond Numbers

Liquidity management requires a fundamental shift in thinking, from maximizing returns to optimizing survival. This doesn't mean being overly conservative, but rather maintaining enough flexibility to navigate uncertainty.

The Opportunity Cost Fallacy

Critics often argue that holding cash is "inefficient" due to opportunity costs. However, this perspective ignores liquidity's option value, the ability to act decisively when opportunities arise. During market crashes, recessions, or personal emergencies, liquidity isn't just protective, it's transformative.

Building Financial Resilience

True financial success isn't measured solely by net worth growth but by the ability to maintain stability across various economic conditions. Liquidity provides the foundation for this resilience, enabling individuals and businesses to not just survive but thrive during challenging periods.

Final Thoughts 

Liquidity isn’t just a financial metric, it’s a survival tool. Whether you’re a business owner, investor, or individual, prioritizing liquidity early prevents desperation later.  

As Warren Buffett famously said:  

"Cash is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent."

Don’t wait until the oxygen runs out. 

How to Structure a Cap Table When Building with a Studio

In the fast-evolving world of startups, Venture Studios are becoming a powerful model for company building. Unlike accelerators or incubators, studios co-create startups from the ground up, offering resources, teams, and capital in exchange for equity. As more founders choose to build with studios, one question consistently emerges: how should the cap table be structured?

A well-balanced cap table (short for capitalization table) is not just about equity allocation, it’s a reflection of trust, clarity, and shared incentives between founders, studios, and future investors. In this article, we break down how to approach cap table structuring when launching a startup within a venture studio model.

Understanding the Studio-Startup Relationship

Venture studios usually initiate the idea, assemble the initial team, and contribute significant capital, operational support, and strategic guidance. As such, their role is much deeper than that of a passive investor. Their equity share often reflects this heavier involvement in the early stages.

Startups built with studios typically go through the following early stages:

1. Ideation & Validation – The studio identifies a market gap and develops a viable solution.

2. Team Formation – A founding team is recruited, often led by the studio.

3. MVP Development – Resources like engineering, legal, and marketing are provided.

4. Spinout & Fundraising – Once validated, the startup spins out and raises external capital.

Each of these stages affects the cap table, especially how equity is allocated between the studio, founders, and early team members.

Common Cap Table Structures in Studio Models

Although there’s no one-size-fits-all formula, most cap tables in studio-born startups follow a similar pattern during the spin-out phase:

1. Studio Equity (20%–60%)

Studios generally take a larger equity stake than a traditional investor due to their active role in the company’s creation. This stake typically ranges between 30% and 50%, depending on how much the studio contributed in terms of capital, resources, and risk.

Some models may go as high as 60% in early concept-phase startups, especially where the studio also provides the CEO or core leadership team. Over time, as the startup raises capital and scales, the studio’s ownership usually dilutes.

2. Founding Team Equity (20%–50%)

Founders joining a studio venture may receive 20% to 40% equity, depending on when they join and what responsibilities they take on. A technical co-founder joining post-MVP might receive less equity than one who joins at the ideation stage.

Founders often receive their equity through a vesting schedule, commonly over four years with a one-year cliff, aligning long-term commitment with ownership.

3. Employee Option Pool (10%–15%)

Like any startup, those born from studios need to attract and retain top talent. An option pool—typically 10% to 15% of the cap table, is reserved for employees, especially during the first fundraising round.

Early hires may receive larger chunks from this pool, particularly if they are taking on key operational or product roles in the earliest stages.

4. Investor Equity (5%–30%)

If the startup raises a pre-seed or seed round soon after spinning out of the studio, the new investors’ equity will also need to be accounted for. Early-stage VCs or angel investors may take 5% to 20% depending on the round size and valuation.

This dilutes all existing shareholders, including the studio and founders. Planning for this early ensures the cap table remains fair and balanced post-investment.

Best Practices for Cap Table Planning

● Model Scenarios Early

Before finalizing equity splits, it’s crucial to model various scenarios: What happens if you raise multiple rounds? What if key founders leave early? Having these projections gives clarity and avoids surprises.

● Align Equity with Value Added

The cap table should reflect the actual value contributed. A studio that provides engineers, designers, and growth experts deserves a larger stake than one offering only desk space and mentorship. Likewise, founders driving product and sales should be fairly compensated.

● Use Vesting and Cliff Periods

To ensure long-term commitment, both studios and founders often use vesting schedules. A typical 4-year vesting with a 1-year cliff protects the company from early departures and ensures equity is earned over time.

● Create Clear Operating Agreements

Equity is only one part of the relationship. Make sure legal documents (like operating agreements, term sheets, and founder agreements) clearly outline roles, responsibilities, and equity terms. Transparency builds trust.

How to Think About Studio Involvement Over Time

One unique aspect of cap tables in studio-led startups is the evolving role of the studio. In early stages, the studio is hands-on. But as the founding team grows, external funding is raised, and operations scale, the studio often steps back.

Some studios gradually reduce involvement or maintain board-level influence. This transition should be planned in advance and reflected in vesting or advisory agreements.

Conclusion

Structuring a cap table with a venture studio requires balancing contributions, expectations, and future growth potential. While studios may take a significant early stake, the cap table must remain attractive for future investors and fair to founders who take on operational leadership. By modeling scenarios, aligning value with equity, and using legal clarity, startups can ensure their cap table empowers, not hinders, their long-term success.

As venture studios continue reshaping how startups are born, a thoughtful approach to equity is essential. A well-structured cap table is not just a spreadsheet, it’s a roadmap for shared ownership, mutual accountability, and startup resilience.

How Regulation Will Shape Fintech Innovation in Europe by 2030

As Europe continues to evolve as a global fintech powerhouse, regulation is poised to play a decisive role in shaping the pace, direction, and nature of innovation across the sector. From PSD3 and open finance frameworks to digital identity rules and crypto asset regulation, the future of European fintech will be inextricably linked to how policymakers approach oversight and enablement. By 2030, the relationship between regulators, startups, and financial incumbents may define which markets thrive and which stagnate.

The European Regulatory Landscape in Motion

The European Union has historically taken a proactive stance toward digital financial services. Initiatives like PSD2 (the Second Payment Services Directive) enabled the rise of open banking, paving the way for an ecosystem where banks must share customer data with licensed third-party providers. The upcoming PSD3 and Open Finance Regulation are expected to expand this even further, standardizing access to broader financial data and services beyond payments.

Regulatory harmonization across EU member states is creating a fertile ground for pan-European fintech models. However, the patchwork nature of national implementations still poses a challenge for startups seeking to scale. By 2030, alignment efforts—such as the Digital Finance Package and cross-border regulatory sandboxes, could dramatically lower barriers to entry and expansion.

Compliance as a Competitive Advantage

Historically, regulation has often been viewed by startups as a constraint. But modern fintech players increasingly see compliance as a strategic differentiator. RegTech solutions (regulatory technology) are helping firms automate KYC/AML, transaction monitoring, and reporting obligations, making it easier for even early-stage ventures to navigate complex compliance requirements.

Venture studios and accelerators are also embedding compliance frameworks into their support models, ensuring that new fintechs are ‘compliant by design.’ In a world where trust and security are paramount, especially with increased scrutiny around data privacy and cybersecurity, building with regulation in mind from day one could unlock greater user adoption and investor confidence.

Key Areas of Regulatory Influence by 2030

1. Open Finance and Data Portability

By 2030, open finance regulations are expected to empower consumers to share data across a wide range of financial services, including mortgages, pensions, insurance, and investments. This could drive the emergence of hyper-personalized fintech platforms, enabling tailored financial advice and products based on a 360-degree view of a user’s financial life.

2. Digital Identity and eIDAS 2.0

The revised eIDAS regulation aims to create a unified framework for digital identity across Europe. A trusted digital ID system would streamline onboarding, payments, and verification processes, making it significantly easier for fintech startups to scale across borders and compete with incumbents.

3. Crypto, Tokenization, and MiCA

The Markets in Crypto-Assets (MiCA) regulation, which provides a legal framework for crypto-assets across the EU, is expected to unlock significant growth in the token economy. From asset-backed tokens to decentralized finance (DeFi), MiCA could reduce risk and increase institutional participation in crypto innovation.

4. Green Finance and ESG Standards

The EU’s Sustainable Finance Disclosure Regulation (SFDR) and taxonomy frameworks are already influencing investment and product design. Fintechs offering green lending, carbon tracking, or impact investing services will benefit from more clarity around ESG reporting and alignment.

5. AI and Algorithmic Accountability

As AI becomes more prevalent in underwriting, credit scoring, and financial advice, regulators are proposing oversight mechanisms to ensure transparency and prevent discrimination. By 2030, successful fintechs will need to demonstrate ethical and explainable AI practices as part of their product offering.

The Role of Supervisory Technology (SupTech)

It’s not just fintechs using technology, regulators are embracing it too. SupTech refers to the use of technology by supervisory agencies to improve oversight and efficiency. From real-time transaction monitoring to AI-driven anomaly detection, these tools will make it easier for regulators to keep up with the speed of innovation without stifling it.

For fintech founders, this means greater clarity and faster feedback loops, especially when engaging with innovation hubs or regulatory sandboxes. It could also open the door to more dynamic, data-driven policy making.

Final Thought

By 2030, regulation will not simply be a set of constraints that fintechs must work around, it will be a key enabler of innovation, trust, and cross-border scale. As Europe pursues harmonized frameworks around open finance, crypto, ESG, AI, and digital identity, the fintechs that align themselves early with these regulatory shifts will be better positioned to lead. Investors, founders, and studios alike must view regulation not as a hurdle, but as an essential design layer for building the financial services of the future.

AI Startups in PE/VC: Overhyped or Underestimated?

The question of whether AI startups are overhyped or underestimated reveals the fundamental misunderstanding permeating today's investment landscape. Rather than a monolithic sector deserving uniform skepticism or enthusiasm, artificial intelligence represents a complex ecosystem where speculative excess coexists with profound undervaluation. The answer depends entirely on which corner of this vast landscape you examine, and whether you possess the analytical sophistication to distinguish between genuine innovation and cleverly marketed incrementalism.

The Theater of Hype: Where Valuations Defy Gravity

The most visible AI investments often represent the sector's most theatrical performances, where billion-dollar valuations rest on foundations of promise rather than profit. Foundation model companies have captured public imagination and investor capital in equal measure, creating a feeding frenzy that bears an uncomfortable resemblance to previous technology bubbles. These companies command valuations that would make even the most optimistic dot-com investor blush, justified by narratives of artificial general intelligence and revolutionary transformation that remain tantalizingly out of reach.

The application layer presents an even more concerning spectacle of speculation. Countless startups have discovered that adding "AI-powered" to their pitch decks can multiply valuations overnight, regardless of underlying differentiation or sustainable competitive advantages. This phenomenon, dubbed "AI washing" by skeptics, has created a parallel universe where traditional business fundamentals seem quaint and outdated. Consumer-facing AI applications, in particular, have attracted enormous attention despite demonstrating unit economics that would terrify any rational investor operating under normal market conditions.

The Hidden Gems: Where Value Hides in Plain Sight

While headlines fixate on ChatGPT valuations and artificial general intelligence timelines, the most compelling AI investments often operate in the shadows of public attention. Infrastructure companies building the foundational layers of AI deployment represent a dramatically different investment proposition, one characterized by rational valuations, sustainable business models, and defensive competitive positions. These businesses provide the essential plumbing that enables AI deployment at scale, creating platform effects that become more valuable as adoption accelerates.

The vertical AI revolution represents perhaps the most underestimated opportunity in the entire technology landscape. Healthcare AI companies developing FDA-approved diagnostics, financial services firms solving compliance challenges, and manufacturing solutions delivering measurable productivity improvements demonstrate the transformative power of artificial intelligence applied to specific domain problems. European and Asian markets present particularly compelling arbitrage opportunities, where comparable companies trade at significant discounts to American counterparts despite similar growth trajectories and market positions. 

The Sophistication Gap: Why Traditional Frameworks Fail

The challenge facing AI investors extends far beyond simple valuation metrics to encompass fundamental questions about how technological revolutions should be evaluated and financed. Traditional venture capital frameworks, optimized for software businesses with predictable scaling characteristics, struggle to accommodate AI companies' unique cost structures, competitive dynamics, and value creation mechanisms. The result is systematic mispricing that creates both dangerous bubbles and extraordinary opportunities.

Revenue quality emerges as the critical differentiator in this landscape, where two companies with identical top-line growth can justify vastly different valuations based on underlying business model sustainability. Companies achieving platform effects through network externalities, regulatory moats, or proprietary data advantages deserve premium valuations regardless of sector sentiment. Conversely, businesses relying on commodity APIs or consumer adoption without clear monetization paths face inevitable margin compression as market dynamics normalize.

Sector Dynamics: The Tale of Three Markets

Healthcare AI presents the strongest case for systematic underestimation, where regulatory approval processes create natural monopolies and clear value propositions for end customers. The sector's focus on patient outcomes rather than engagement metrics provides sustainable differentiation that pure software companies cannot replicate. FDA breakthrough device designations create competitive advantages measured in years rather than months, while clinical trial data establishes barriers to entry that algorithmic improvements alone cannot overcome.

Financial services AI benefits from regulatory tailwinds as compliance requirements favor established players with deep domain expertise. These companies operate in environments where switching costs are measured in years and relationship-driven sales cycles create additional defensive characteristics. The sector's high-stakes nature means that marginal improvements in fraud detection, risk management, or compliance efficiency can justify substantial technology investments, creating sustainable demand for proven solutions.

Investment Philosophy: Threading the Needle

The AI investment landscape demands portfolio construction that captures legitimate opportunities while avoiding speculative excess. This requires moving beyond binary thinking about sector-wide overvaluation or undervaluation toward company-specific analysis of competitive positioning, market dynamics, and business model sustainability. The most successful investors will be those who can identify genuine innovation amid the noise of marketing hyperbole and venture capital momentum.

Risk management becomes paramount in an environment characterized by extreme volatility and regulatory uncertainty. Scenario planning must incorporate potential AI winter scenarios where speculative investments face significant corrections, while defensive positions in infrastructure and vertical applications provide portfolio stability. Geographic diversification across America, European, and Asian markets helps capture regional arbitrage opportunities while reducing concentration risk in any single regulatory environment.

The temporal dimension adds another layer of complexity, as AI capabilities continue advancing at unprecedented rates while market valuations gyrate wildly based on sentiment and speculation. Patient capital willing to invest through multiple hype cycles will likely be rewarded, while those seeking quick exits may find themselves trapped in valuation bubbles that burst without warning.

Final Thoughts 

The AI investment landscape defies simple categorization as either overhyped or underestimated because it encompasses multiple distinct markets with fundamentally different characteristics and risk profiles. Consumer applications and foundation models trading at extreme multiples clearly exhibit speculative characteristics, while infrastructure companies and vertical AI solutions demonstrate rational valuations based on sustainable business models. The sector's complexity requires sophisticated analysis that moves beyond aggregate funding metrics toward nuanced evaluation of competitive advantages and market positioning. 

Why Corporates Are Launching Their Own Venture Studios

In today’s fast-paced innovation landscape, large corporations are realizing that traditional R&D methods are no longer sufficient to keep up with disruptive startups. As a result, many are turning to venture studios, a powerful model that combines capital, strategic support, and entrepreneurial talent to build new businesses from scratch. But why exactly are corporates launching their own venture studios, and what outcomes are they expecting?

Let’s explore how this shift is reshaping corporate innovation across Europe and beyond. 

What Is a Corporate Venture Studio?

A corporate venture studio (CVS) is an in-house or partnered entity that helps corporates build and launch startups aligned with their long-term strategic goals. Unlike accelerators or incubators that support external founders, a CVS usually creates startups internally, recruits entrepreneurs, and co-owns the ventures.

By leveraging internal resources (capital, data, customer base, infrastructure) and combining them with startup speed and culture, venture studios give corporates a faster, more agile way to explore new markets, technologies, and business models.

Why the Shift to Venture Studios?

Here are five key reasons why corporates are launching venture studios:

1. Faster Innovation Cycles

Corporates typically suffer from bureaucracy and slow decision-making. Venture studios allow them to test and launch ideas in months, not years. Studios build multiple MVPs (minimum viable products), iterate quickly, and kill bad ideas early, much like startups.

This agile experimentation drastically reduces time-to-market and enables corporates to stay ahead of disruptors.

2. Strategic Diversification

Many industries, from insurance and banking to manufacturing and healthcare, are undergoing digital disruption. Corporates can’t afford to stand still. Launching a studio lets them diversify their business models and experiment with innovations outside of their core business, all while maintaining ownership and oversight.

3. Access to Entrepreneurial Talent

Attracting and retaining top entrepreneurial talent within a corporation is notoriously difficult. But a venture studio structure is appealing to founders who want to build, scale, and exit without starting completely from scratch. Corporates are using studios to recruit founders-in-residence, giving them equity, autonomy, and a clear runway to build new ventures.

4. De-risked Corporate Innovation

Studios are designed to fail fast and cheap. Instead of risking millions on a single product that may not fit the market, corporates can spread risk across multiple experiments. When one venture succeeds, it can produce significant ROI. If others fail, they offer learning at a much lower cost than failed internal projects.

This portfolio approach is much more efficient than traditional R&D or M&A strategies.

5. IP Ownership and Strategic Alignment

Unlike investing in external startups or using accelerators, a corporate venture studio allows the parent company to retain full or partial ownership of IP, build ventures that complement their core operations, and align innovation with long-term strategy. This gives them better control over growth areas and exit options.

Real-World Examples of Corporate Venture Studios

Across Europe and globally, several corporates have launched successful venture studios:

• Allianz X (Germany) – A venture arm of Allianz, focused on building and investing in startups in insurtech and beyond.

• Engie Factory (France) – The venture studio of energy giant Engie, which co-creates cleantech startups.

• BCG Digital Ventures (Global) – Although not a corporate itself, BCGDV partners with corporates to co-found and scale ventures that fit their strategic needs.

• Bosch Startup Harbour (Germany) – Focuses on IoT and connected products that can extend Bosch’s innovation capabilities.

• Telefonica Alpha (Spain) – Launched by telecom firm Telefonica to build moonshot tech companies.

These studios often have dedicated teams of product managers, engineers, marketers, and venture architects who operate semi-independently but are strategically aligned with the parent company’s goals.

How Corporate Venture Studios Work

The typical CVS model includes the following steps:

1. Opportunity Identification: Studios analyze trends, gaps, and strategic goals to define promising venture ideas.

2. Venture Design: Teams prototype business models, develop MVPs, and test market traction.

3. Recruitment of Founders: Studios bring in experienced operators or domain experts to lead the startup.

4. Funding & Incubation: The corporate funds the startup’s early stages and provides access to distribution channels, customers, and infrastructure.

5. Spin-Out or Integration: If successful, the startup can either become a standalone company (with shared equity) or be integrated back into the corporate entity.

Common Challenges

Despite the potential, corporate venture studios face some pitfalls:

• Cultural Clashes: Corporate risk-aversion can conflict with the startup mentality.

• Decision-Making Bottlenecks: Too much red tape can slow progress.

• Talent Drain: Retaining entrepreneurial talent after a spin-out can be tough.

• Unclear Exit Plans: Without a clear commercialization or M&A strategy, studios risk building “zombie” startups that don’t scale.

That’s why successful studios build strong governance, KPIs, and incentives from the beginning.

Final Thought

As markets continue to evolve and competition intensifies, corporates can no longer rely solely on internal R&D or passive venture investments. Launching a venture studio offers a powerful way to own the innovation process, unlock new revenue streams, and drive cultural transformation.

For corporates serious about long-term growth, building a venture studio is no longer a luxury, it’s a strategic necessity.

What Makes a Fintech VC Fund Stand Out in a Saturated Market?

The global fintech boom has led to a surge in venture capital (VC) funds targeting financial technology startups. From digital wallets and neo-banks to embedded finance and crypto infrastructure, the competition among VC firms has never been fiercer. With thousands of funds now chasing the next fintech unicorn, differentiation is no longer a nice-to-have; it's an existential imperative. So, what truly makes a fintech VC fund stand out in today’s saturated market?

Deep Domain Expertise

Generalist VC funds often struggle to keep up with the fast-evolving fintech landscape. The most successful fintech VC firms distinguish themselves through deep domain expertise. They don’t just invest in fintech; they understand its regulatory frameworks, technological underpinnings, and historical cycles. These firms hire partners and advisors with backgrounds in financial services, economics, and emerging technologies. Their teams include former bankers, regulators, and tech entrepreneurs who have built and scaled financial products.

This level of specialization allows fintech-focused VCs to provide strategic value beyond capital. Whether it’s navigating a complex licensing process, introducing a startup to banking partners, or validating go-to-market strategies, deep expertise builds trust with founders and increases the likelihood of portfolio success.

Proprietary Deal Flow

In a crowded environment, access to the best deals is a key differentiator. Top-tier fintech VC funds cultivate proprietary deal flow through long-standing relationships, accelerator partnerships, and founder networks. Some even launch their own venture studios to incubate startups from the ground up.

Proprietary deal flow not only gives these funds early access to promising startups but also allows them to avoid overpriced rounds or me-too investments. It also enables greater influence over initial company formation, terms, and strategic direction. Funds with exclusive access to category-defining founders stand apart from those relying on inbound pitches or demo days.

Value-Added Capital

Gone are the days when writing a check was enough. Fintech founders expect more from their investors: real operational support, product feedback, hiring assistance, and access to potential customers. Leading fintech VCs offer hands-on value that impacts core business outcomes.

Some funds, for instance, have in-house legal teams to help with regulatory filings, or talent partners who assist with hiring top-tier engineers and compliance officers. Others offer custom playbooks for entering new markets or frameworks for B2B fintech sales. These tailored resources build stronger relationships with portfolio companies and increase retention rates in future funding rounds.

Brand and Thought Leadership

Strong brand equity enables fintech VC funds to attract both capital and talent. Funds that consistently publish deep-dive reports, sector analyses, and founder interviews become known for their insights and credibility. Thought leadership can also influence public perception, drive inbound interest from top-tier startups, and strengthen a fund’s negotiating position.

This brand building often extends to event hosting, webinars, podcasts, and active social media engagement. A fund with a strong public presence is often seen as more founder-friendly, more connected, and more influential within the broader ecosystem.

Strategic LP Base

The composition of a VC fund’s limited partners (LPs) can also be a differentiator. Fintech funds that attract strategic LPs,such as banks, insurers, or payment processors, can offer portfolio companies more than just capital. These LPs often become early customers, design partners, or acquirers.

Furthermore, LPs with strong distribution channels can help portfolio companies achieve scale faster. For example, a health-focused fintech backed by an insurance giant may gain early traction by integrating directly into an existing claims or benefits system.

Global and Regulatory Insight

As fintech increasingly becomes a global endeavor, VC firms with international reach gain an advantage. Funds that understand regulatory nuances across different jurisdictions can help startups expand internationally and avoid common pitfalls. Some funds even employ policy experts or maintain relationships with regulators to stay ahead of legislative changes.

Cross-border knowledge also enables fintech VCs to spot arbitrage opportunities, for example, funding a remittance company targeting corridors overlooked by U.S. or EU competitors, or supporting embedded finance models in underbanked markets.

Emphasis on Responsible Innovation

With increased scrutiny from regulators and consumers, fintech VCs that promote responsible innovation have a long-term edge. This includes emphasizing data privacy, ethical lending practices, financial inclusion, and ESG alignment. Funds that guide their portfolio companies toward sustainable practices are better prepared for regulatory changes and reputational risks.

Final Thought

In a saturated market, standing out as a fintech VC fund requires more than just capital and buzzwords. The most differentiated funds are those that combine deep domain expertise, exclusive access to high-quality startups, hands-on support, strategic partnerships, and a forward-looking approach to regulation and ethics. As fintech continues to evolve and mature, funds that offer authentic, strategic value, not just capital, will lead the next generation of innovation and enterprise growth.

3 Reasons Why LPs Should Look at Studio Models in 2025

The venture capital landscape is experiencing a seismic shift. With traditional VC funds struggling to deliver consistent returns and Limited Partners (LPs) facing unprecedented challenges in deploying capital effectively, a new model is emerging as a compelling alternative: venture studios. As we navigate through 2025, the data tells a clear story, venture studios are not just outperforming traditional investment models, they're redefining what institutional investors should expect from their venture allocations.

1. Superior Returns and Risk-Adjusted Performance

The numbers don't lie: venture studios are delivering exceptional results that should make every LP take notice. Venture studios demonstrate Internal Rates of Return (IRR) that are approximately double those of traditional venture capital benchmarks, with a 24% exit rate compared to just 14% for both accelerators and founders-first VCs. This outperformance becomes even more impressive considering speed to liquidity, studio startups are acquired 33% faster and take 31% less time to IPO.

The systematic approach delivers consistent results: 84% of studio startups raise seed rounds and 72% reach Series A funding, compared to just 42% of traditional ventures reaching Series A. Real-world success stories like Moderna, Twilio, and Bitly demonstrate this isn't coincidence but systematic value creation. For LPs grappling with poor distributions from traditional VC funds, less than 10% of 2021 funds have had any DPI after 3 years, venture studios offer a proven alternative with both higher returns and faster liquidity events.

2. Accelerated Time-to-Market and Capital Efficiency

The venture studio model delivers unprecedented speed and capital efficiency, with startups reaching Series A in just 25.2 months compared to industry averages. This acceleration stems from studios' systematic approach, proactively identifying opportunities, assembling expert teams, and providing comprehensive operational support from day one, eliminating the founder learning curve that typically consumes years and millions. The operational leverage is particularly evident in AI-driven markets, allowing studios to deploy cutting-edge infrastructure across their entire portfolio simultaneously. 

3. Market Momentum and Strategic Positioning for the Future

The institutional investment landscape is rapidly shifting toward venture studios, positioning early LP adopters for significant advantages. In 2024, venture studio funds were nearly twice as common as accelerator funds, accounting for 10.3% of all venture capital funds launched compared to 5.5% for accelerators.

This trend reflects a broader recognition among sophisticated investors that the traditional VC model faces structural challenges. VC fundraisers raised $76.1 billion in 2024, making it the lowest fundraising year since 2019, while only 30% of Limited Partners (LPs) are looking to add VC managers to their portfolios, down 36 points from previous years. The shift represents more than just performance metrics, it's about alignment and control. Traditional VC funds face inherent conflicts between generating management fees and optimizing portfolio returns. Venture studios, by contrast, earn equity through direct value creation and capital investment, aligning their interests more closely with LP returns.

Final Thoughts 

The venture capital industry stands at an inflection point, with traditional models struggling to deliver consistent returns in today's fast-paced, technology-driven market. Venture studios represent a fundamental reimagining of how institutional capital can be deployed, offering LPs superior risk-adjusted returns, faster liquidity, and strategic positioning for the future backed by robust data and proven track records. The question isn't whether venture studios will continue to outperform traditional VC models, the data already confirms this reality, but whether LPs will recognize this shift early enough to capture the significant alpha still available. As we progress through 2025, the LPs who embrace venture studios today will likely look back on this decision as a defining moment that positioned them at the forefront of the next generation of venture capital.

Studio vs Accelerator: Which Model Drives Better Founder Outcomes?

In the fast-evolving startup ecosystem, founders face a fundamental question: Should I launch my startup through a venture studio or an accelerator? Both models offer unique advantages, but they cater to different founder profiles and startup stages.

This article explores the key differences between venture studios and accelerators, and which model ultimately delivers better outcomes for founders.

What Is a Venture Studio?

also known as a startup studio, company builder, or venture builder, is an organization that ideates, builds, and launches startups internally. Unlike accelerators that assist external startups, venture studios create their own concepts in-house, test them for market fit, and then recruit co-founders or CEOs to lead these ventures.

Key characteristics of venture studios include:

• Idea Generation: Studios develop startup ideas internally, based on market gaps, trends, and research.

• Validation: These ideas are tested and refined before any company is formally created.

• Founder Recruitment: Once the idea is validated, the studio brings on founders to execute and scale the startup.

• Infrastructure and Capital: The venture studio provides initial funding, legal support, design, product, HR, and technology resources, removing much of the early operational burden from founders.

This model allows founders to focus purely on execution with much less risk. Instead of starting from zero, they’re stepping into a machine that’s already moving, with a pre-validated idea, seed capital, and expert support.

What Is an Accelerator?

A startup accelerator supports early-stage companies through fixed-term programs that typically last between three and six months. Unlike venture studios, accelerators work with startups that already exist and have a founding team in place.

Features of accelerators include:

• Founders Apply With Their Own Idea or MVP: Startups need to be at the idea or product stage to be considered.

• Mentorship and Training: Accelerators offer guidance through workshops, networking, and mentor matching.

• Seed Funding: Participating startups receive small amounts of funding (e.g., $100K–$150K) in exchange for equity.

• Demo Day and Investor Access: At the end of the program, startups pitch to investors for future funding rounds.

Well-known examples include Y Combinator, Techstars, and 500 Startups. These programs often boost visibility and credibility, opening doors to venture capital and strategic partnerships.

Key Differences

Which Drives Better Founder Outcomes?

  For First-Time Founders: Venture Studios

Venture studios de-risk entrepreneurship. Founders join validated projects with funding, a support team, and a clear go-to-market strategy. This is ideal for:

• Domain experts (e.g., engineers, marketers) new to startups

• Entrepreneurs who want operational backing

• Those who prefer execution over ideation

 Example: Antler and eFounders in Europe have helped dozens of first-time founders build multi-million-dollar SaaS and fintech companies with minimal prior startup experience.

For Experienced Founders: Accelerators

Accelerators work best for founders who:

• Already have a clear idea or MVP

• Seek exposure, mentorship, and network effects

• Can leverage the accelerator’s brand to raise funding

Accelerators can supercharge momentum and lead to large seed or Series A rounds, especially in hot sectors like AI and fintech.

Example:Flutterwave (a leading African fintech unicorn) emerged from the Y Combinator accelerator and rapidly scaled after launch.

A Hybrid Approach?

Some founders even benefit from a hybrid approach: building with a studio, then joining an accelerator to scale and raise capital. As startup ecosystems mature, the lines between the two models are beginning to blur.

Final Thoughts

Both venture studios and accelerators have their place in the startup journey. The key is knowing your stage, strengths, and support needs.

If you need structure, capital, and deep operational support, studios are the way to go.
If you already have traction and seek funding and connections, accelerators will help you scale faster.

The best model for founders depends on their experience, the idea stage, and the kind of startup they want to build.

Fintech & Private Equity: A Growing Intersection of Value

The fintech revolution has reshaped how we bank, invest, insure, and manage money. At the same time, private equity (PE) has evolved into one of the most influential forces in global finance. Now, these two financial powerhouses are increasingly converging, transforming not only how capital is allocated but also how innovation is scaled. The intersection of fintech and private equity is creating significant value, unlocking new business models and financial outcomes that weren’t possible a decade ago.

Why Private Equity is Embracing Fintech

Private equity firms have historically excelled at acquiring, restructuring, and growing traditional businesses. However, the rise of fintech has presented a unique opportunity: to inject capital into tech-driven financial services with high growth potential and scalability.

Several factors are drawing PE toward fintech:

1. Digital Transformation in Financial Services: As financial institutions digitalize, fintech companies are often at the forefront. PE firms see value in owning or scaling platforms that help banks, insurers, and asset managers modernize operations.

2. Recurring Revenue Models: Many fintechs, especially those offering SaaS or embedded finance solutions, operate on predictable, subscription-based revenue models, appealing to PE investors who value stable cash flow.

3. Underserved Market Segments: Fintech is often aimed at niches ignored by traditional finance. From gig economy lending platforms to SME-focused banking-as-a-service, these underserved segments provide rich growth opportunities.

Key Sectors Drawing Attention

PE firms are increasingly investing in specific fintech subsectors where innovation and margins align well:

• Payments and Embedded Finance: These offer long-term contracts and scalability. PE sees this as a digital utility play, especially in emerging markets where mobile-first solutions dominate.

• Insurtech: As the insurance sector lags in digitization, PE investors are funding insurtechs that use AI and automation to improve underwriting, claims, and customer experience.

• RegTech and Compliance: Regulatory compliance is expensive and complex. Fintechs offering automated compliance and risk management solutions are prime acquisition targets for PE-backed roll-ups.

• Lending Platforms: From BNPL to SME loan marketplaces, lending is being reimagined. PE’s appetite grows for platforms with strong underwriting technology and data-driven risk models.

How Fintechs Benefit from PE Involvement

While fintechs often start with VC funding, PE involvement introduces new benefits at later stages:

• Operational Efficiency: PE investors bring strong expertise in cost control, governance, and process optimization, critical for scaling fintechs efficiently.

• Buy-and-Build Strategies: Through roll-ups, PE can help fintechs expand into new geographies or adjacent services by acquiring and integrating smaller firms.

• Access to Distribution Channels: PE firms often have broad business networks and can facilitate partnerships with banks, corporations, or government bodies to accelerate fintech growth.

• Longer Investment Horizon: Unlike VCs that seek early exits, PE firms are often comfortable holding assets longer, which aligns better with fintechs that need time to mature and monetize.

Challenges at the Intersection

Despite the synergy, there are challenges fintech founders and PE investors must navigate:

• Cultural Clash: PE firms typically bring rigorous financial discipline, while fintech founders may prioritize innovation and rapid iteration. Aligning goals is critical.

• Regulatory Complexity: As fintech companies scale, they often move into highly regulated territories. PE firms must be ready to support compliance frameworks globally.

• Overvaluation Risks: Some fintech sectors, especially during boom periods, can be overvalued. PE investors must conduct due diligence to avoid buying into hype cycles.

Future Outlook: What to Expect in 2025 and Beyond

The trend of private equity funding fintech is set to continue accelerating. As fintech matures, it’s no longer a fringe innovation sector but a core part of the financial ecosystem. PE firms increasingly view fintech as infrastructure, essential to how modern finance operates.

Moreover, we can expect to see more fintech-focused PE funds emerging, more cross-border M&A activity, and deeper integration between fintech solutions and traditional finance portfolios. Additionally, the rise of ESG-aligned fintechs (e.g., sustainable finance tools, climate risk models) offers PE investors a new path to drive both impact and returns.

Final thought

The growing intersection of fintech and private equity represents a powerful confluence of innovation and capital. While fintech brings agility, customer-centricity, and cutting-edge technology, private equity provides the structure, strategy, and scale needed to turn promising startups into dominant players. Together, they are not only driving financial returns but also redefining how modern financial services are built and delivered.

How We See the Future of Company Building at Mandalore Partners

At Mandalore Partners, we believe the future of company building is fundamentally different from what we've seen before. As we navigate through 2025, we're witnessing a paradigm shift that goes beyond traditional venture capital models, and we're positioning ourselves at the forefront of this transformation.

The old playbook of throwing capital at promising startups and hoping for exponential returns is not just outdated; it's counterproductive in today's complex business environment. We've observed that the most successful companies of the past five years weren't just well-funded, they were strategically guided, operationally supported, and deeply integrated into their target industries from day one.

Our Vision: Beyond Capital to Strategic Partnership

We've spent years observing the venture capital landscape, and frankly, we believe the traditional model is broken. The industry generated $149.2 billion in exit value in 2024, yet despite a $47 billion increase in overall deal value, we saw 936 fewer deals compared to the previous year. This tells us something profound: the market is demanding quality over quantity, strategic depth over transactional relationships.

At Mandalore, we see this as validation of our core thesis. The future belongs to companies that receive more than just capital, they need strategic expertise, operational support, and deep industry integration. This is why we've pioneered our Venture Capital-as-a-Service (VCaaS) model.

What We Mean by Venture Capital-as-a-Service

At Mandalore Partners, we don’t just write checks and step back, we embed ourselves as strategic partners through our VCaaS model, transforming how corporations build and scale innovation. Unlike traditional VCs, we stay hands-on from idea to market leadership, providing not only capital but deep regulatory expertise, industry networks, and operational insight. Our work with insurtech startups shows how this integrated approach turns potential into market dominance, proving that success hinges on more than just technology—it demands the right strategic guidance. With 93% of CEOs set to maintain or grow corporate venture investments in 2024, our model is exactly what forward-thinking companies need: a trusted partner to co-architect their future.

Our 6 Ss Framework: The Architecture of Success

We've developed what we call the 6 Ss model, our proprietary framework that has become the gold standard for successful company building in the modern era. This isn't theoretical; it's battle-tested across dozens of portfolio companies and multiple market cycles:

1.Strategy: We believe every successful company begins with a clear strategic vision aligned with market realities. Our data-driven approach ensures the startups we partner with address genuine market needs rather than pursuing solutions seeking problems.

2. Sourcing: We've built a global network and AI-powered sourcing capabilities that enable us to discover breakthrough technologies and visionary entrepreneurs before they become obvious opportunities. We're not followers, we are discoverers.

3. Scaling: Growth without foundation leads to failure. We provide operational expertise that helps companies build sustainable scaling mechanisms, from technology infrastructure to team development and market expansion strategies.

4. Synergy: We facilitate strategic partnerships that amplify growth potential and create competitive advantages. The most successful companies of the future will be those that create meaningful connections within their ecosystems.

5. Sustainability: Our investment thesis prioritizes companies building solutions for tomorrow's challenges. We consider long-term viability across financial, environmental, and social dimensions.

6. Success: We measure success not just in financial returns, but in creating lasting value for all stakeholders, entrepreneurs, corporations, and society at large.

How We're Leveraging Technology Convergence

We're particularly excited about the convergence of artificial intelligence, IoT, and robotics. These technologies aren't just changing how companies operate, they're fundamentally transforming how they're built.

Our portfolio companies are reimagining traditional industries through technological integration. We're backing robotics companies creating new paradigms for industrial automation and AI-powered startups revolutionizing risk assessment in insurance. What excites us most is witnessing the emergence of hybrid business models that combine digital innovation with deep industry expertise, creating defensible moats that traditional tech companies can't replicate.
This convergence represents more than technological advancement; it's the foundation of sustainable competitive advantage in the next decade.

Our Take on Market Corrections and Opportunities

The valuation corrections from 2021 highs have created what we see as unprecedented opportunities. While others view down rounds and unicorn devaluations as challenges, we see them as market efficiency improvements that favor strategic investors like us.

We're witnessing trends like co-investments, extensions, and significant valuation cuts, all of which play to our strengths as strategic partners who provide more than capital. When financial investors retreat, strategic value becomes even more important.

This market correction has also revealed something crucial: companies built on solid fundamentals with strong strategic partnerships weather economic storms better than those relying solely on financial backing. Our portfolio companies have demonstrated remarkable resilience during this period, with several achieving profitability ahead of schedule while their purely VC-backed competitors struggled with runway management.

What We Predict for the Next Decade

Based on our market position and portfolio insights, we see several key trends defining the next decade of company building:

• Ecosystem Integration: We believe successful companies will be those that seamlessly integrate into broader innovation ecosystems, creating value through partnerships rather than competition. This aligns perfectly with our VCaaS model. Companies that try to build everything in-house will find themselves outmaneuvered by those that strategically leverage ecosystem partnerships.

• Regulatory Proactivity: Companies that anticipate and shape regulatory frameworks rather than merely comply with them will gain significant competitive advantages. Our deep industry expertise positions us to help companies navigate this complexity. We've seen companies gain 18-month market advantages simply by understanding regulatory trends before their competitors.

• Stakeholder Capitalism: We're investing in companies that create value for all stakeholders, customers, employees, investors, and society, rather than optimizing for single metrics. This isn't just about ESG compliance; it's about building sustainable business models that can weather long-term market cycles.

• Global-Local Balance: Future companies will need to operate globally while maintaining deep local expertise and cultural sensitivity. Our network enables this balance, helping companies expand internationally while maintaining local market authenticity.

• AI-Human Collaboration: The future belongs to companies that enhance human capabilities rather than replace them. We're particularly excited about companies that use AI to augment human decision-making rather than automate it away entirely.

Our Competitive Advantage

What sets us apart is our unique position at the intersection of corporate strategy and entrepreneurial execution. We combine the best of corporate strategic thinking with entrepreneurial agility, creating sustainable competitive advantages for all stakeholders.

Our VCaaS model enables corporations to maintain focus on core operations while building breakthrough innovation capabilities. We're not just facilitating transactions, we're architecting the future of corporate innovation.

Why This Matters Now

The companies that will define the next decade are being built today. We're not just predicting this transformation, we're actively creating it through strategic partnerships with forward-thinking corporations and breakthrough technology companies.

Our approach transcends traditional venture capital limitations by creating a new category of value creation. We're building bridges between corporate resources and entrepreneurial innovation, enabling both to achieve outcomes neither could reach alone.

Our Commitment Moving Forward

At Mandalore Partners, we're committed to leading this transformation in company building. We're creating exceptional value for entrepreneurs, corporations, and society at large by reimagining how strategic capital, operational expertise, and market access can be combined.

The future of company building belongs to those who can successfully navigate the intersection of technology, strategy, and execution. We're not just participants in this evolution, we're architects of it.

Final Thoughts 

The venture capital industry is at a turning point, and Mandalore Partners is leading the way with a bold alternative to outdated, transactional investing. Through our Venture Capital as a Service (VCaaS) model, we combine the strategic resources of established corporations with the agility of innovative startups to create lasting value beyond traditional VC limitations. As markets demand quality, strategic depth, and sustainable growth, we’re building companies that leverage technology, industry expertise, and regulatory foresight to drive real impact. At Mandalore, we’re not just funding businesses, we’re designing the infrastructure for tomorrow’s economy. Join us to shape this transformation, not just react to it.

How Venture Studios Are Redefining Early-Stage Investment in Europe

In recent years, the European startup ecosystem has witnessed a quiet revolution,one led not by individual entrepreneurs or traditional venture capitalists, but by venture studios. Also known as startup studios, company builders, or venture builders, these organizations are fundamentally transforming how startups are launched, scaled, and funded.

From Berlin to Stockholm, venture studios are redefining early-stage investment by creating startups from scratch, combining operational expertise, in-house resources, and capital, and this model is gaining significant momentum across Europe.

What Is a Venture Studio?

A venture studio is a company that creates new startups. Unlike accelerators or incubators that support existing startups, venture studios build their own ventures. They identify business opportunities internally, develop prototypes, and assemble teams to lead the new companies.

They typically provide:

• Business ideas

• Early-stage funding

• Design and development resources

• Marketing and go-to-market strategies

• Recruitment of founding teams

The goal is to reduce startup risk and increase the chances of success by providing hands-on support from day one.

The Rise of Venture Studios in Europe

While the model originated in the U.S. (with pioneers like Idealab and Rocket Internet), Europe has rapidly embraced the venture studio approach, adapting it to local contexts.

Some notable venture studios in Europe include:

• Founders Factory (UK)

• Antler (Pan-European)

• eFounders (France & Belgium)

• Zebra Labs (Germany)

• Rainmaking (Denmark)

The rise of these studios aligns with Europe's growing appetite for innovation, digital transformation, and scalable tech-driven solutions,particularly in sectors like fintech, insurtech, and AI.

Why Venture Studios Are Gaining Ground

1. De-risking Early-Stage Investment

Traditional early-stage investment is risky. Many startups fail due to team mismatches, lack of product-market fit, or execution issues. Venture studios address these challenges by:

• Carefully selecting problems worth solving

• Testing ideas before significant capital is deployed

• Bringing in proven operational teams

• Providing institutional knowledge and repeatable processes

This de-risks early-stage investment, making it more attractive for investors who want exposure to innovation without shouldering all the volatility.

2. Combining Capital and Execution

Venture studios provide more than just money, they bring in execution. Studios typically invest capital alongside deep operational support in product development, marketing, legal, and hiring.

3. Faster Time-to-Market

With in-house resources and processes, studios can launch startups in months rather than years. Time is money in the startup world , and venture studios know how to save both.

4. Stronger Founder Matches

Studios recruit and match founders to ideas after validating those ideas. This approach ensures founders work on something with traction, not just personal passion. It increases the likelihood of founder-market fit.

Case Studies: Success Stories from European Venture Studios

eFounders: Reinventing the Future of Work

Paris-based eFounders has launched over 30 companies in the SaaS space, including:

• Spendesk – a corporate expense management platform

• Front – a shared inbox for teams

• Aircall – cloud-based phone systems

With a portfolio now valued at over $2 billion, eFounders is a prime example of how studios can build repeatable, scalable, and high-value businesses.

Founders Factory: Partnering with Corporates

Founders Factory, headquartered in London, takes a collaborative approach by partnering with corporates like Aviva, L’Oréal, and easyJet to co-create new ventures. This model blends industry expertise with startup agility, resulting in better distribution and exit opportunities.

Challenges for the Venture Studio Model

While the benefits are significant, venture studios also face key challenges:

1. High Operational Costs – Running a studio with multiple teams, developers, and resources is expensive.

2. Talent Bottlenecks – Finding experienced, entrepreneurial founders is not easy, especially for niche industries.

3. Ownership Structures – Studios often retain significant equity in startups they build, which can sometimes discourage later-stage investors or founders.

4. Scalability Issues – Unlike VCs who can deploy capital across dozens of deals, studios require hands-on involvement, making scaling slower.

Yet, many of these challenges are being overcome with better models, diversified funding sources, and growing demand for startup building.

The Future: What’s Next for Venture Studios in Europe?

The next decade looks bright for venture studios in Europe.

1. Niche Studios Will Emerge

Expect to see industry-specific venture studios in areas like:

• HealthTech

• ClimateTech

• InsurTech

• Food and Agriculture

These studios will leverage sector expertise and regulatory knowledge to build highly targeted solutions.

2. More Corporate-Backed Studios

Corporations looking to innovate outside their core business are increasingly turning to studios. This trend will grow as legacy firms in banking, insurance, and logistics face digital disruption.

3. Studio-VC Hybrids

Some studios are evolving into studio-VC hybrids, combining the company-building model with traditional fund investing. This allows them to back external founders while still building in-house ventures.

4. More Government and EU Support

As European governments continue to promote entrepreneurship and innovation, expect more support for venture studios via grants, incubator partnerships, and regulatory incentives.

Final Thoughts

Venture studios represent a powerful shift in how startups are built and funded in Europe. By reducing risk, providing hands-on support, and accelerating time-to-market, they are making early-stage investing more efficient and effective.

As innovation becomes a priority across sectors, and the demand for high-quality startups continues to rise, venture studios are well-positioned to become a central pillar of Europe’s startup ecosystem.

The Rise of Vertical Fintechs in 2025: Why Niche Is the New Scalable

In 2025, the financial technology (fintech) landscape is undergoing a dramatic transformation. As horizontal players that aim to serve everyone face challenges in personalization and regulation, vertical fintechs, startups that target specific customer segments or industries, are taking the lead. From fintechs focused on freelancers to those designed for farmers or immigrants, the niche is no longer small, it's the new scalable.

What Are Vertical Fintechs?

Vertical fintechs are companies that design their products, services, and experiences around the unique needs of a specific market segment. Unlike horizontal fintechs like PayPal or Revolut that aim to provide general services to all consumers, vertical players dive deep into the challenges, behavior, and expectations of a narrowly defined group.

Examples include:

• Lendtable, which focuses on helping low-income workers access employer-matching 401(k) contributions.

• Daylight, a digital bank designed for LGBTQ+ individuals.

• Till, a fintech solution for landlords and tenants to manage rent flexibility.

In 2025, the rise of these verticals reflects a broader trend: consumers and businesses are demanding more tailored financial services, and the companies that deliver them are gaining traction.

Why Vertical Fintechs Are Thriving in 2025

1. Deep Customer Understanding = Product-Market Fit

The biggest advantage of vertical fintechs lies in their laser-sharp focus. By honing in on one specific user group or industry, these companies build intimate knowledge of pain points. That insight leads to stronger product-market fit, better retention, and faster word-of-mouth adoption.

For example, a vertical fintech serving migrant workers can customize onboarding, offer remittance tools, and provide local-language support, all features that horizontal platforms might overlook.

2. Better Regulatory Navigation

Financial services are inherently regulated, and different industries or customer segments often have different compliance requirements. Vertical fintechs can more easily navigate the regulatory landscape by focusing on one set of rules. For instance, a fintech that builds solutions for cannabis businesses can specialize in meeting the unique banking and licensing laws that apply to that niche.

In 2025, tighter regulatory frameworks in Europe, the U.S., and Africa are making this advantage more visible. Governments are more receptive to solutions that cater to underserved communities without overgeneralizing.

3. Embedded Finance Opportunities

Vertical fintechs often integrate financial services directly into existing workflows of their target industries. This is known as embedded finance. Whether it's payment tools inside agricultural supply chains or credit lines within e-commerce marketplaces for artisans, fintechs are transforming into essential infrastructure rather than standalone apps.

By embedding financial services where users already spend time, vertical fintechs in 2025 are improving user adoption and building stickier platforms.

4. Capital Efficiency & Lower CAC

Horizontal fintechs often burn massive capital trying to attract a wide user base. In contrast, vertical fintechs enjoy lower customer acquisition costs (CAC) due to precise targeting and high referral rates within tight-knit communities.

In 2025, investors are paying more attention to capital efficiency amid shifting venture capital dynamics. That makes vertical fintechs attractive for funds focused on sustainable growth.

5. Strategic Partnerships & Ecosystem Building

Vertical fintechs are not just building apps, they’re constructing ecosystems. Many partner with nonprofits, trade associations, cooperatives, and even government agencies to deliver value at scale.

An example is a vertical fintech in East Africa that partners with local agricultural cooperatives to offer weather-indexed crop insurance. 

Case Study: Vertical Fintech in Agriculture

Take the agricultural sector. Farmers often face unique financial challenges such as seasonal income, lack of credit history, and  price fluctuation. In 2025, a new wave of fintech startups is emerging that offer:

• Digital lending tailored to planting and harvest cycles

• Crop insurance embedded into seed purchases

• Real-time commodity pricing through mobile apps

These products aren’t just financial tools, they’re lifeline.

Challenges to Scaling Vertically

While vertical fintechs offer tremendous upside, they also face some hurdles:

• Limited TAM (Total Addressable Market): Narrow focus can sometimes limit scalability if not properly planned.

• Dependency on Ecosystem Partners: Many vertical fintechs rely on third-party players (e.g., clinics, NGOs, schools) for customer distribution.

• Product Complexity: Building hyper-specific tools often leads to longer development cycles and complex support needs.

However, these are not deal-breakers. Many vertical fintechs are addressing these issues by expanding into adjacent verticals once they gain traction or by layering horizontal capabilities (e.g., payments, lending) on top of a strong vertical core.

The Future of Vertical Fintechs

As we move through 2025 and beyond, several trends suggest vertical fintechs are here to stay:

• AI and personalization will allow for even deeper tailoring of services to niche needs.

• Open banking regulations in Europe and parts of Africa are making it easier for vertical players to access and build on top of existing financial infrastructure.

• Corporate venture studios are also starting to incubate vertical fintechs, seeing them as quicker paths to innovation in legacy industries like health, construction, or logistics.

Final Thought

In 2025, the fintech game is no longer just about size or volume, it’s about depth, relevance, and impact. Vertical fintechs are proving that when it comes to financial innovation, the riches truly lie in the niches. By serving specific audiences with empathy and precision, they are redefining what scalability means in financial services. For founders, investors, and corporates alike, vertical is not just a strategy, it’s the future.

Investing in Artificial Intelligence: Key Trends for Funds

Methodology: A Fund-Focused View on AI Investment Dynamics

This article draws from market reports, fund manager insights, and AI ecosystem analyses to outline the main trends shaping how venture, growth, and corporate funds are investing in artificial intelligence today. We look at deal activity, sector focus, and strategic themes guiding capital allocation.

In Brief: What Funds Need to Know

• AI deal volume remains strong, with funds focusing on core infrastructure, applied AI, and ethical frameworks.

• Large funds and corporate VCs are increasingly backing AI tools that reshape entire industries.

• Geopolitics, regulation, and responsible AI principles are playing a bigger role in diligence.

• The next wave of winners may emerge from vertical AI not general-purpose models.

AI Investment Is Maturing But the Opportunity Remains Huge

Over the past decade, funds have steadily increased their exposure to artificial intelligence. From early bets on core machine learning platforms to today’s more refined focus on vertical applications (healthcare AI, legal tech AI, climate AI), the landscape has evolved.

AI deal activity remains resilient even in cautious markets, as funds seek companies offering real, scalable applications rather than AI hype.

According to PitchBook, AI and machine learning startups captured over $50 billion in venture funding globally in 2024, with enterprise AI infrastructure and applied AI solutions leading the way.

Key Trend 1: From General AI to Vertical AI

• Fund managers are shifting attention from general-purpose AI tools to sector-specific solutions. Why?

• Vertical AI startups typically show faster paths to product-market fit.

• Customers value AI embedded in their existing workflows (e.g., legal document review, clinical trial analysis).

• Regulatory clarity is stronger in narrow-use cases.

Funds investing in AI are looking for companies that deeply understand their end markets, not just ones building horizontal tools.

Key Trend 2: Responsible AI Moves Front and Center

Ethical AI isn’t just a discussion point anymore, it's a diligence priority.

LPs increasingly expect funds to assess AI safety, bias mitigation, and explainability during investment screening. Startups offering transparency features (e.g., model audits, bias dashboards) are gaining an edge in fundraising.

Funds that position themselves as champions of responsible AI will not only de-risk portfolios but also build brand credibility with partners and regulators.

Key Trend 3: Corporate Venture Capital Is Leading in AI Scaling

Corporate funds are playing a growing role in AI funding rounds especially at the growth stage. Why?

• AI solutions often require integration with large enterprise systems.

• Corporate VCs provide go-to-market pathways AI startups need to scale.

• Strategic investors are focused on AI that directly augments their core business lines.

We see funds co-investing alongside corporates in areas like AI-driven cybersecurity, supply chain optimization, and predictive analytics.

Final Thought: What’s Next for AI-Focused Funds?

The AI gold rush is shifting from model-building to real-world deployment. Funds that succeed will:

• Back founders solving specific industry problems.

• Prioritize responsible, explainable AI.

• Align with partners who can accelerate adoption at scale.

For investors, artificial intelligence isn’t just a theme, it's becoming an essential part of any modern portfolio.

Is There Still Room for Disruption in the European Insurance Market?

The European insurance landscape stands at a fascinating crossroads. While traditional players have dominated for centuries, a new wave of technological innovation is reshaping the very foundations of how insurance operates. The question isn't whether disruption is possible, it's whether incumbents will adapt fast enough to survive the transformation already underway.

The Digital Revolution is Just Beginning

The numbers tell a compelling story. The insurance technology market size in Europe is estimated to grow by USD 19.72 billion from 2024-2028, according to Technavio, with the market estimated to grow at a CAGR of almost 36.5% during the forecast period. This explosive growth signals that we're witnessing the early stages of a technological revolution, not its conclusion.

What makes this particularly striking is the stark contrast with traditional growth patterns. While the broader European insurance market maintains steady single-digit growth, insurtech is expanding at rates that would make Silicon Valley envious. This disparity reveals massive opportunities for companies willing to embrace digital-first approaches.

Where Traditional Models Show Vulnerability

European insurance has historically relied on intermediaries, complex underwriting processes, and lengthy claim settlements. These legacy systems create friction points that modern consumers increasingly refuse to tolerate. Consider the average home insurance claim in Germany, which can take 30-45 days to process through traditional channels, compared to digital-first insurers who promise resolution within 48 hours.

• The protection gap presents another compelling opportunity. Climate change has created new risks that traditional models struggle to assess and price accurately. The insurance industry is transforming, driven by new tech, tax laws, and expectations, yet many European insurers remain reactive rather than proactive in addressing emerging risks like cyber threats and extreme weather events.

• Young Europeans represent perhaps the largest untapped market. Digital natives aged 25-35 show significantly lower insurance penetration rates than previous generations at the same age, not because they don't need coverage, but because existing products don't align with their lifestyle and expectations. They demand instant quotes, transparent pricing, and seamless mobile experiences, areas where traditional insurers often fall short.

Successful Disruption Models Already Emerging

Several European companies have proven that disruption isn't just possible, it's profitable. Lemonade, while originally American, has successfully expanded into European markets by offering renters and homeowners insurance through an AI-powered platform that can process claims in seconds rather than weeks.

• Sweden's Hedvig has revolutionized home and contents insurance by eliminating deductibles and offering transparent, flat-rate pricing. Their model shows how removing traditional insurance complexity can attract younger demographics who previously avoided coverage altogether.

• In the UK, Zego has transformed commercial vehicle insurance by providing flexible, pay-as-you-go coverage for delivery drivers and ride-share operators. This micro-insurance model addresses the gig economy's unique needs, a market segment traditional insurers largely ignored.

Technology as the Great Enabler

Artificial intelligence and machine learning have matured to the point where they can now handle tasks that previously required human expertise. Modern AI can analyze satellite imagery to assess property damage, process natural language to understand claim descriptions, and detect fraud patterns with greater accuracy than human investigators.

• IoT devices create unprecedented data streams that enable real-time risk assessment. A smart home system can prevent water damage by automatically shutting off pipes when leaks are detected, then instantly notify insurers to update coverage terms. This shift from reactive claim processing to proactive risk prevention represents a fundamental business model transformation.

• Blockchain technology, while still emerging, promises to streamline multi-party insurance transactions and create tamper-proof claim histories. European regulatory frameworks like GDPR actually position the region well for blockchain adoption, as the technology aligns with data sovereignty requirements.

Regulatory Environment Creates Opportunities

European insurance regulation, often viewed as constraining innovation, actually creates moats for disruptors who can navigate compliance effectively. Solvency II requirements, while complex, establish trust frameworks that tech-savvy companies can leverage more efficiently than traditional insurers burdened by legacy systems.

• The EU's Digital Single Market strategy actively encourages cross-border insurance innovation, making it easier for successful models to scale across the continent. This regulatory support contrasts sharply with the fragmented approach in other regions, giving European disruptors a significant advantage.

• Open Banking regulations have also created precedents for data sharing that could extend to insurance. When customers can seamlessly share their financial and behavioral data with insurers, it enables more accurate risk assessment and personalized pricing, core advantages for innovative players.

The Path Forward

The European insurance market isn't just ripe for disruption, it's demanding it. Consumer expectations, technological capabilities, and regulatory frameworks have aligned to create an environment where innovative approaches can thrive. While investments in insurtech saw both deal volume and funding decline in 2023, this consolidation phase often precedes breakthrough innovations as the strongest players emerge.

The companies that will define the next decade won't be those trying to digitize existing processes, but those reimagining insurance from first principles. They'll use data to predict and prevent losses rather than just compensate for them. They'll create products that adapt to individual lifestyles rather than forcing customers into standardized categories. Most importantly, they'll build trust through transparency and speed rather than complexity and tradition.

The question facing European insurance isn't whether disruption will continue, it's whether established players will lead the transformation or be swept aside by it. For entrepreneurs and innovators, the answer is clear: the opportunities have never been greater, and the time to act is now.

Top 5 Insurtech Startups to Watch in 2025

The insurance technology sector is experiencing unprecedented growth, with artificial intelligence driving a fundamental transformation across the industry. According to Beinsure Data, 35 insurtech unicorns (>$1 bn) raised up to 2025 more than $20.2 bn venture capital with cumulative valuation ~$106 bn. More remarkably, the global artificial intelligence (AI) in insurance market size is projected to hit around USD 141.44 billion by 2034 from USD 8.13 billion in 2024 with a CAGR of 33.06%.

This explosive growth signals a paradigm shift where traditional insurance models are being disrupted by data-driven, customer-centric approaches. Here are the five insurtech startups positioned to lead this transformation in 2025.

1. Shift Technology: Revolutionizing Fraud Detection with AI

Shift Technology stands at the forefront of AI-powered insurance solutions, specializing in fraud detection and claims automation. The company's advanced AI solutions enable real-time fraud detection and automated claims handling, significantly boosting efficiency, accuracy, and cost savings for insurance providers worldwide.

What sets Shift Technology apart is their sophisticated machine learning algorithms that can identify fraudulent claims patterns in real-time, reducing false positives by up to 70% compared to traditional methods. Their platform processes over 78 million claims annually across 300+ insurance organizations globally, demonstrating the scalability and reliability of their AI infrastructure.

The company's recent expansion into predictive analytics for underwriting represents a natural evolution of their fraud detection capabilities, positioning them to capture additional market share in the risk assessment segment.

2. Altana AI: Leading the Equity Efficiency Revolution

Altana AI and Next Insurance lead among the winners, each having raised $1.6M in equity funding per employee. This remarkable capital efficiency metric highlights Altana AI's lean operational model and strong investor confidence in their technology platform.

Altana AI focuses on supply chain risk intelligence, providing insurers with unprecedented visibility into global trade networks and potential risk factors. Their AI-powered platform analyzes millions of supply chain data points to predict disruptions, enabling insurers to price policies more accurately and reduce claims volatility.

The startup's proprietary algorithms can identify hidden connections between suppliers, manufacturers, and distributors, creating comprehensive risk profiles that traditional assessment methods miss. This capability is particularly valuable for commercial insurance lines, where supply chain disruptions can trigger massive claims events.

3. INARI: Blockchain-Powered Insurance Management

Spanish startup INARI provides a cloud-based blockchain platform for end-to-end insurance management. The platform's machine learning (ML) algorithms utilize a broad variety of insurance data to provide automated insurance operations, from quotation to portfolio management.

INARI's innovative approach combines blockchain transparency with AI efficiency, creating a seamless insurance ecosystem that reduces operational costs by up to 40%. Their platform enables real-time policy adjustments based on risk changes, automated claims processing, and transparent premium calculations.

The company's focus on emerging markets, particularly in Latin America and Southeast Asia, positions them to capture the growing demand for digital insurance solutions in regions with traditionally underserved populations. Their mobile-first approach and multilingual capabilities make insurance accessible to previously untapped demographic segments.

4. Coterie Insurance: Small Business Insurance Reimagined

Coterie Insurance is a pioneering insurtech startup that is revolutionizing the way small businesses access and manage insurance. Founded in 2018, Coterie leverages cutting-edge technology and data analytics to streamline the insurance process.

• Coterie's AI-driven platform can generate customized business insurance quotes in under 60 seconds, compared to the industry average of 2-3 days. Their technology analyzes over 500 data points per business, including social media presence, online reviews, and financial indicators, to create accurate risk profiles without lengthy application processes.

• The startup's focus on underserved small business segments, particularly in professional services and e-commerce, addresses a $50+ billion market opportunity. Their API-first architecture enables seamless integration with business management platforms, creating embedded insurance experiences that feel natural to modern entrepreneurs.

5. Loovi: Vehicle Intelligence and Fleet Management

Brazilian insurtech Loovi represents the next generation of specialized insurance technology. Brazilian insurtech Loovi raised US$9 million in funding from prominent investors Marçal Holding and Oliveira Participações. Specialising in vehicle tracking, security, theft warranty, and fleet management services, Loovi, which was founded by Quézide Cunha and William Naor, aims to transform vehicle insurance through IoT integration and real-time monitoring.

• Loovi's comprehensive platform combines telematics, AI-powered risk assessment, and proactive theft prevention to reduce vehicle insurance claims by up to 35%. Their IoT sensors provide real-time vehicle health monitoring, predictive maintenance alerts, and immediate theft response capabilities.

• The company's expansion into fleet management services creates additional revenue streams while providing deeper insights into commercial vehicle operations. This data advantage enables more accurate pricing models and proactive risk management strategies.

The Agentic AI Revolution

• AI adoption will climb in 2025, with agentic AI platforms becoming essential. These systems will handle complex tasks independently alongside human workers, redefining workflows and client interactions. This technological evolution represents a fundamental shift from reactive to proactive insurance services.

• Agentic AI systems will autonomously adjust policies based on real-time risk changes, initiate claims processing upon detecting incidents, and provide personalized risk mitigation recommendations to policyholders. This level of automation and personalization will become the new standard for competitive insurtech companies.

Market Outlook and Investment Trends

• The insurtech sector's resilience is evident in recent funding patterns. Q3 2024 closed with an investment in insurtech of $3.2 bn, 7% less than in 2023. However, the trend is positive and suggests a rebound in funding activity as investors recognize the long-term potential of AI-powered insurance solutions.

• Forty-one of the 50 winners have a CB Insights Mosaic score, a proprietary measure of private company health and growth potential, of at least 700 out of 1,000, indicating strong fundamentals across leading insurtech companies.

Final Thoughts 

The insurtech landscape in 2025 is characterized by AI-first platforms that prioritize customer experience, operational efficiency, and predictive capabilities. These five startups represent different aspects of the insurance value chain transformation: fraud detection, risk intelligence, blockchain integration, small business solutions, and IoT-enabled vehicle services. The future of insurance lies in the hands of these innovative startups that understand the power of data, artificial intelligence, and customer-centric design. As the industry continues its digital transformation, these companies are not just adapting to change, they're driving it.

Is AI Transforming Venture Capital?

Methodology: Mapping AI’s Impact Across the VC Value Chain

This analysis draws from recent VC investment trends, AI tooling adoption across fund operations, startup market behavior, and published reports from leading firms in venture and enterprise AI. We focus on identifying how artificial intelligence influences sourcing, due diligence, portfolio support, and decision-making within venture capital firms, and whether it’s enhancing efficiency or replacing core human functions.

In Brief: What’s Changing?

• AI tools are being widely adopted for deal sourcing, screening, and due diligence.

• LPs are showing increased interest in VC funds with a defined AI advantage.

• New firms are emerging with AI-built investment platforms, offering algorithmically driven portfolios.

• Portfolio support is becoming more data-informed, from hiring intelligence to pricing optimization.

• The human element of venture capital: relationships, trust, judgment, remains irreplaceable, but it’s being redefined

Rethinking Venture Capital: Why Evolution Isn’t Optional

While venture capital has long been considered a relationship-driven business, it’s also a sector rich in data, startup metrics, founder backgrounds, market dynamics, and exit multiples. As these datasets grow, VCs are increasingly turning to AI-powered platforms to extract insight, surface opportunities, and reduce operational burden.

Tools like Affinity, PitchBook’s AI modules, and custom GPT-based systems are now used to automate initial sourcing and provide predictive scoring on potential investments. Some firms, like SignalFire and Zetta, have fully integrated AI into their scouting stack.

“What used to take weeks of founder outreach and CRM updates can now be done in hours,” says one GP at a data-native early-stage fund.

AI-Driven Deal Flow: Filtering Noise with Signal

One of AI’s most impactful applications has been in the triage of inbound deal flow. Firms now deploy models that rank incoming decks and emails based on historic performance patterns, investment thesis fit, and keyword matching.

Some early-stage firms are even experimenting with LLM-powered memo generation, allowing analysts to summarize founder calls and create investment memos in minutes rather than days.

However, this is not about removing human insight; it's about freeing teams to focus on founder evaluation, industry diligence, and partnership building.

Due Diligence Gets Smarter and Faster

Diligence used to be slow, expensive, and heavily manual. With AI, venture teams now automate:

• Market sizing analysis

• Competitor landscape mapping

• Sentiment tracking across social/web

• Technical benchmarking using code or API audits

Firms like a16z and FirstMark have invested in internal tools that run structured diligence pipelines, combining data scraping with analyst review. AI makes the process leaner without compromising depth.

Still, human interpretation, especially for early-stage, pre-revenue bets, remains essential.

AI at the Portfolio Level: Coaching and Insight at Scale

Beyond the investment decision, AI is reshaping how firms support their startups. From hiring intelligence (e.g,. identifying likely candidate attrition) to churn risk detection and customer segmentation, venture teams are leveraging platforms to give founders smarter feedback, faster.

Portfolio dashboards with embedded AI modules offer near real-time insights, transforming GPs into strategic advisors supported by robust tooling.
Some emerging fund models even offer “productized venture support”, giving founders access to plug-and-play AI toolkits as a default benefit of the partnership.

What AI Won’t Replace

For all its analytical power, AI has limitations. Venture remains a trust business. Relationship building, founder empathy, and strategic thinking still matter deeply, particularly at the earliest stages, where conviction often precedes data.

The winning firms in this new landscape won’t be the ones that replace people with bots, but those that use AI to scale what humans do best: pattern recognition, intuition, and judgment.

Final Thought: AI Is Reshaping Venture Quietly and Permanently

AI is not replacing venture capital but it is changing the pace, process, and precision with which it’s practiced. Firms embracing this shift are seeing faster cycles, smarter insights, and a competitive edge in both sourcing and portfolio management. Those resisting risk falling behind not because they can’t find deals, but because they’re spending time where AI can already add value. The future of VC isn’t fully automated. It’s augmented and the transformation is already well underway.

Why Do Venture Studios Attract Investors?

Methodology: Understanding Investor Interest Through Models, Outcomes, and Market Signals

This article is based on an analysis of venture studio performance data, institutional investor trends, and commentary from founders and fund managers across Europe and the U.S. It examines why LPs and corporate partners are increasingly backing the venture studio model, and how it aligns with capital-efficient innovation and risk mitigation.

In Brief: What’s Driving Interest?

• Venture studios reduce startup risk through internal ideation, shared operations, and early product-market fit support.

• Investors are drawn to the repeatable nature of the studio model and its portfolio optionality.

• Studios often deliver higher ownership stakes, clearer paths to scale, and shorter time to value realization.

• The model aligns well with corporate innovation strategies and emerging markets.

• Studio economics are evolving to appeal to both traditional LPs and hybrid backers.

The Studio Model Offers a More Controlled Startup Building Process

Unlike traditional VCs that back external founders, venture studios originate and launch companies in-house, providing founding teams, initial capital, and operational resources. From day one, the studio has owned a significant equity position and maintains strategic oversight.

For investors, this structure reduces early-stage chaos. Ideas are pressure-tested before teams are formed. Hiring, product development, and GTM are handled with experienced operators.

This disciplined approach to entrepreneurship improves the odds of success and makes capital deployment more predictable.

Portfolio Construction: More Shots on Goal, Less Waste

Venture studios are built for portfolio logic. Instead of betting big on a single founder or product, they launch multiple companies in parallel, iterate fast, and shut down underperformers early.

For investors, this reduces downside risk. Studios can reallocate capital, reuse talent, and recycle insights across ventures. A single studio may create 10–20 startups over a few years, all from a shared knowledge base and infrastructure.

This portfolio optionality is appealing to LPs looking for high upside with downside protection.

Ownership and Exit Potential Are More Attractive

Because studios are co-founders, they often retain 25–50% equity stakes in their startups at launch, significantly higher than typical VC-backed models.

This concentrated ownership means that when a studio-backed company succeeds, the returns are larger and more direct. For investors in the studio itself, this structure translates into more meaningful exit participation per win.

Moreover, studios often guide startups to exit-readiness faster. With shared legal, hiring, and product resources, time-to-Series A (and beyond) is compressed.

Alignment with Corporate and Institutional Capital

Studios are also uniquely suited for corporate venture partnerships and family office co-building.

Corporates like the model because it offers them a front-row seat to innovation without the risk of internal R&D. For family offices, studios provide a way to co-create meaningful, values-aligned businesses without needing to incubate from scratch.

The model’s transparency, governance, and strategy-first approach make it easier to manage risk while fostering long-term engagement.

Studios Are Building in Emerging and Underserved Markets

Studios are increasingly being used to catalyze innovation in emerging markets, where capital is scarce but talent is abundant.

By controlling startup formation centrally, studios reduce the operational risk of building in fragmented or early ecosystems. They also attract LPs interested in impact investing, climate solutions, and regional development without sacrificing returns.

This makes the model a compelling vehicle for mission-aligned funds, development finance, and global innovation networks.

Final Thought: Studios Offer a New Kind of Investor Alignment

The rise of venture studios isn’t just about better startup outcomes. It’s about better alignment between capital, creators, and customers.

Studios combine the creativity of entrepreneurship with the structure of private equity. For investors, this means fewer surprises, more visibility, and a clearer path from idea to exit.

As more LPs rethink how they allocate to early-stage innovation, the venture studio model will continue to gain traction not as a trend, but as a tool for sustainable, scalable company building.

How AI is Changing the Underwriting Process in B2B Insurance

The B2B insurance landscape is experiencing a seismic transformation. Traditional underwriting, once dominated by manual processes and lengthy decision cycles, is giving way to a new era powered by artificial intelligence. This shift isn't just evolutionary, it's revolutionary, fundamentally changing how insurers assess risk, price policies, and serve their commercial clients.

The Numbers Don't Lie: A Market in Rapid Transformation

The statistics paint a compelling picture of AI's meteoric rise in insurance. The global AI in the insurance market, valued at $8.13 billion in 2024, is projected to explode to $141.44 billion by 2034, representing a staggering 33.06% compound annual growth rate. This isn't just growth; it's a complete market reimagining. What makes this transformation even more remarkable is its pace of adoption. Recent industry surveys reveal that 77% of insurance companies are now in some stage of AI adoption across their value chain, a dramatic leap from just 61% in 2023. Among life and annuity insurers, the adoption rate soars even higher, with 82% having implemented generative AI in one or more business functions.

For underwriting specifically, the impact is particularly pronounced. AI-assisted underwriting has emerged as one of the largest use case segments for AI in insurance, with insurers reporting up to 40% improvement in underwriting efficiency when deploying AI tools.

Beyond Speed: The Multifaceted Revolution

The transformation extends far beyond simple automation. Modern AI systems are reshaping every aspect of the B2B underwriting process, creating value that compounds across multiple dimensions.

Risk Assessment Precision: Traditional underwriting relied heavily on historical data and underwriter intuition. Today's AI systems analyze vast datasets from connected devices, satellite imagery, social media, and IoT sensors. With experts estimating one trillion connected devices by 2025, the data available for risk assessment is expanding exponentially. This data deluge enables insurers to understand their commercial clients more deeply than ever before, resulting in pricing accuracy that was previously impossible.

Fraud Detection and Pattern Recognition: AI's pattern recognition capabilities have revolutionized fraud detection in commercial lines. By identifying irregular patterns and reducing subjective biases, AI systems can spot potential fraud that human underwriters might miss. This enhanced detection capability translates directly to improved loss ratios, with some insurers reporting decreases of 1-3% through intelligent recommendations on optimal application approval and quoting decisions.

Real-Time Decision Making: The traditional underwriting process often stretched across weeks or months for complex commercial risks. AI has compressed this timeline dramatically, enabling real-time analysis of applications and instant decision-making for many types of coverage. This speed advantage is particularly crucial in B2B markets where businesses need coverage quickly to support their operations.

The Technology Stack Driving Change

The AI revolution in B2B insurance underwriting isn't powered by a single technology but rather by a sophisticated ecosystem of interconnected tools and platforms. Machine learning algorithms process historical claims data to identify risk patterns, while natural language processing systems extract insights from unstructured documents like financial statements and business plans.

Computer vision technology analyzes satellite imagery and drone footage to assess property risks, while predictive analytics models forecast potential claims scenarios. Integration platforms connect these AI tools with existing underwriting systems, creating seamless workflows that enhance rather than replace human expertise.

The sophistication of these systems continues to evolve rapidly. Today's AI underwriting platforms can process multiple data sources simultaneously, cross-referencing business registration information, financial health indicators, industry risk factors, and real-time market conditions to generate comprehensive risk profiles within minutes.

Industry Leaders Driving Innovation

The competitive landscape is being reshaped by companies that successfully harness AI's potential. Planck, for example, raised $71 million in funding to develop its underwriting AI product, which now operates globally. Their platform demonstrates how specialized AI solutions can transform traditional underwriting approaches.

Similarly, major data companies like Experian are developing AI-powered solutions specifically for commercial insurance. Their "Hazard Tags" system provides comprehensive profiles of five million UK businesses, enabling insurers to make more informed underwriting decisions at scale.

The Path Forward: Challenges and Opportunities

Despite the remarkable progress, the journey toward AI-driven underwriting isn't without obstacles. Data quality remains a persistent challenge, as AI systems are only as good as the information they process. Regulatory compliance adds another layer of complexity, particularly in jurisdictions with strict data protection laws.

The human element remains crucial. While AI excels at processing vast amounts of data and identifying patterns, human underwriters bring contextual understanding and relationship management skills that complement AI capabilities. The most successful implementations combine AI's analytical power with human expertise and judgment.

Looking ahead, the integration of AI in B2B insurance underwriting will likely deepen rather than simply expand. As AI systems become more sophisticated and data sources multiply, underwriters will gain unprecedented insights into commercial risks. The question isn't whether AI will transform B2B insurance underwriting; it's how quickly and comprehensively this transformation will occur.

Final Thought

The transformation of B2B insurance underwriting through AI represents more than technological advancement, it's a fundamental shift toward data-driven, precise, and efficient risk assessment. With 36% of insurance technology experts identifying AI as their top innovation priority for 2025, the momentum behind this transformation continues to build.

For B2B insurers, the choice is clear: embrace AI-driven underwriting or risk being left behind by competitors who have harnessed its power. The insurers who successfully integrate AI into their underwriting processes won't just survive this transformation, they'll thrive in the new landscape of precision, speed, and insight that defines the future of commercial insurance.

The numbers, the technology, and the market momentum all point in the same direction. AI isn't just changing B2B insurance underwriting, it's revolutionizing it, one algorithm at a time.

The Next Generation of Insurtech Founders: Trends to Watch in Europe

Europe's  landscape is experiencing a remarkable transformation. While global funding may have cooled from pandemic highs, a new generation of founders is emerging with bold visions that could reshape the continent's €1.4 trillion insurance market. These entrepreneurs aren't just digitizing old processes, they're reimagining insurance from the ground up.

The Numbers Tell a Story of Resilience

Despite broader market challenges, Europeans are showing impressive resilience. Europe captured $1.1 billion in  investment in 2024, positioning itself as the second-largest market globally after the United States. More telling is the quality over quantity approach: the median early-stage  deal size has reached a record high, increasing from $2.5M in 2023 to $4M in 2024.

This isn't just about bigger checks, it signals investor confidence in European founders' ability to build substantial businesses. The UK leads the charge, but Berlin, Paris, and Amsterdam are emerging as serious contenders, each developing distinct specializations that reflect local market needs and regulatory environments.

AI-First Founders: Beyond the Hype

The most compelling trend among Europe's new  founders is their AI-native approach. Unlike previous generations who retrofitted AI into existing processes, these entrepreneurs are building from first principles.  that raised funding in 2024 are growing headcounts faster than others, by a median of 20% over the last 12 months, with many of these high-growth companies being AI-centric.

Take Berlin-based INSRD, which raised €500k in pre-seed funding in early 2024. Founder Stefan Balg, a serial entrepreneur with over a decade of experience, isn't just digitizing business insurance, he's using AI to predict and prevent risks before they materialize. This proactive approach represents a fundamental shift from reactive claims processing to predictive risk management.

The AI trend extends beyond risk assessment. European founders are leveraging machine learning for personalized pricing, automated underwriting, and real-time policy adjustments. This isn't theoretical, it's happening now, with tangible results in customer acquisition costs and retention rates.

The Embedded Insurance Revolution

Perhaps the most significant opportunity lies in embedded insurance, where coverage becomes seamlessly integrated into other products and services. Berlin's Embea exemplifies this trend, having raised €4 million to build a pan-European embedded life insurance platform. The company's approach reflects a broader understanding that modern consumers expect insurance to be invisible until needed.

This embedded approach is particularly relevant in Europe's fragmented market, where regulatory differences across countries have historically created barriers. Smart founders are turning this challenge into an advantage, building platforms that can adapt to local requirements while maintaining operational efficiency across borders.

The embedded model also addresses a critical pain point: insurance literacy. By integrating coverage into familiar purchase journeys, whether buying a phone, booking travel, or starting a business, these founders are making insurance more accessible and relevant to younger demographics who traditionally under-insure.

Climate-Conscious Innovation

European insurtech founders are uniquely positioned to lead in climate-related insurance innovation. Extreme weather drives insured losses 70% above historical norms, creating both challenges and opportunities for innovative coverage models.

Forward-thinking founders are developing parametric insurance products that pay out automatically when specific weather conditions are met, eliminating lengthy claims processes. Others are creating new coverage categories for climate adaptation technologies, renewable energy installations, and carbon credit portfolios.

This climate focus isn't just about risk management, it's about enabling the green transition. European founders understand that insurance can be a catalyst for sustainable business practices, not just a safety net.

Regulatory Navigation as Competitive Advantage

While many view Europe's regulatory complexity as a barrier, the smartest founders see it as a moat. Those who master compliance across multiple jurisdictions create defensible positions that are difficult for later entrants to replicate.

The regulatory landscape is also evolving in founders' favor. Open banking regulations have paved the way for open insurance initiatives, creating opportunities for data-driven underwriting and seamless policy management. Forward-thinking founders are building compliance-by-design approaches that will position them well as regulations continue to evolve.

The Funding Reality Check

The funding environment requires founders to be more capital-efficient than their predecessors. Investments are down, both in the number of deals inked (-32%) and euros invested (-54%) compared to peak years. However, this constraint is breeding innovation.

Today's European insurtech founders are focusing on faster paths to profitability, often through partnerships with traditional insurers rather than trying to replace them entirely. This collaborative approach is proving more sustainable than the disruption-focused strategies of earlier insurtech waves.

The successful founders are also more sophisticated about timing their fundraising, often achieving significant milestones with smaller initial rounds before pursuing larger growth capital. This approach builds stronger businesses and more attractive investment cases.

Demographic Shifts Drive Innovation

Europe's aging population and changing work patterns create unique opportunities for innovative insurance products. Gig economy workers, remote professionals, and portfolio careers all require flexible insurance solutions that traditional products can't address.

Smart founders are building usage-based models that align cost with actual risk exposure. Whether it's pay-per-mile car insurance for occasional drivers or project-based professional indemnity for freelancers, these products reflect how people actually live and work.

The generational shift is equally important. Digital natives expect insurance to be as intuitive as their banking or shopping apps. Founders who nail the user experience have significant advantages in customer acquisition and retention.

Looking Ahead: The Platform Play

The most ambitious European founders are building platforms rather than products. They understand that the real opportunity lies in becoming the infrastructure layer for insurance across multiple verticals and geographies.

This platform approach leverages Europe's strengths: regulatory expertise, technical talent, and market diversity. By building once and deploying many times across different markets and use cases, these founders can achieve the scale needed to compete globally.

The Next Chapter

Europe's next generation of founders operates in a more mature but still rapidly evolving market. They combine the technical sophistication of their predecessors with a deeper understanding of regulatory realities and customer needs. The most successful won't just build better insurance companies, they'll create entirely new categories of risk management that we can't yet imagine. In a continent where innovation meets regulation, where tradition confronts disruption, these founders are writing the next chapter of European.

The trends are clear: AI-native thinking, embedded experiences, climate consciousness, regulatory savvy, and platform approaches. The founders who master these elements while maintaining capital discipline will define European insurtech's next decade.

For investors, partners, and industry observers, the message is equally clear: the most interesting European stories are still being written.

AI in Insurance: From Claims Automation to Risk Prediction

The insurance industry stands at the precipice of a technological revolution. What once required weeks of manual processing, stacks of paperwork, and armies of adjusters can now be accomplished in hours through artificial intelligence. The transformation isn't just impressive, it's reshaping the entire economic landscape of risk management.

The Numbers Tell the Story

The statistics are staggering. The global artificial intelligence (AI) in insurance market size is projected to hit around USD 141.44 billion by 2034 from USD 8.13 billion in 2024 with a CAGR of 33.06%. This exponential growth reflects more than just technological adoption, it represents a fundamental shift in how insurers operate, compete, and serve customers.

By 2024, 80% of insurance executives believe that AI-driven automation will be a key factor in improving efficiency and customer engagement. This isn't wishful thinking; it's a strategic necessity in an increasingly competitive marketplace where customer expectations for speed and service continue to rise.

 Claims Processing: The Speed Revolution

Perhaps nowhere is AI's impact more dramatic than in claims processing. Traditional claims handling, with its lengthy investigations and manual reviews, is being transformed into streamlined, automated workflows. AI automates the traditionally slow claims processing, reducing the time from weeks to just a few days or even hours.

Consider the practical implications: a fender-bender that once required multiple phone calls, adjuster visits, and weeks of processing can now be handled through a smartphone app that uses computer vision to assess damage, cross-references repair costs, and approve payment, all within minutes of the incident.

Claims processing in 2030 remains a primary function of carriers, but more than half of claims activities have been replaced by automation. McKinsey's research suggests we're already well on our way to this future, with advanced algorithms handling initial claims routing and IoT sensors providing real-time data capture through technologies like drones.

The customer experience transformation is equally significant. AI-powered chatbots and virtual assistants are used to provide 24/7 support to customers, helping them file claims and answer queries. This means policyholders no longer need to wait for business hours or navigate complex phone trees; assistance is available instantly, whenever disaster strikes.

 The Fraud Detection Arms Race

Insurance fraud represents a massive financial drain on the industry, with insurance fraud costs $6 billion annually, and insurers lose at least 10% of their premium collection to insurance fraud. But AI is leveling the playing field in unprecedented ways.

• The potential savings are enormous. Deloitte predicts that, by implementing AI-driven technologies across the claims life cycle and integrating real-time analysis from multiple modalities, P&C insurers could reduce fraudulent claims and save between US$80 billion and US$160 billion by 2032.

• However, the challenge is evolving rapidly. Insurance fraud increased by 19% from synthetic voice attacks in 2024, with sophisticated AI-generated deep fakes and voice cloning creating new categories of fraud that traditional detection methods simply cannot identify.

• The response from insurers has been equally sophisticated. AI systems now analyze patterns across vast datasets, identifying subtle anomalies that human investigators might miss. These systems can detect everything from staged accidents to inflated medical claims by analyzing behavioral patterns, cross-referencing databases, and identifying inconsistencies in real-time.

 Risk Prediction: The Crystal Ball Effect

• Beyond processing existing claims, AI is revolutionizing how insurers predict and price risk. Machine learning algorithms analyze millions of data points, from satellite imagery showing property conditions to IoT sensors monitoring driving behavior, to create highly accurate risk profiles.

• This granular risk assessment enables dynamic pricing models that adjust premiums based on real-time risk factors. A homeowner who installs smart security systems might see immediate premium reductions, while a driver who demonstrates consistently safe behavior through telematics could earn ongoing discounts.

• The implications extend beyond individual policies. Insurers can now predict natural disaster impacts with greater accuracy, optimize their risk portfolios, and even provide early warning systems to policyholders to prevent losses before they occur.

Investment Priorities and Market Focus

• AI garnered the largest share of experts, about 36%, who weighed in on what the top tech innovation priority for the coming year was. Big data and analytics were the second highest with 28%, followed closely by cloud and digital infrastructure with 26% of respondents.

• This investment pattern reveals a clear strategy: insurers are building comprehensive AI ecosystems rather than implementing isolated solutions. The combination of AI, big data analytics, and cloud infrastructure creates a powerful platform for innovation across all aspects of insurance operations.

• While AI monetization lags, embedded insurance is set to grow by 30%, especially in personal lines. This suggests that while the technology is maturing rapidly, the industry is still learning how to fully capitalize on its potential.

Real-World Applications

The theoretical benefits of AI in insurance are compelling, but the real-world applications demonstrate its transformative power:

• Auto Insurance: Computer vision analyzes accident photos to assess damage severity and estimate repair costs instantly. Telematics devices monitor driving behavior to adjust premiums dynamically and even predict potential accidents before they occur.

• Property Insurance: Satellite imagery and weather data help insurers assess property risks and predict natural disaster impacts. Drones inspect hard-to-reach areas for damage assessment, reducing both time and safety risks for human inspectors.

• Health Insurance: AI analyzes medical records to identify potential fraud, predict health outcomes, and optimize treatment recommendations. Machine learning algorithms can even identify patients at risk for specific conditions, enabling preventive interventions.

• Life Insurance: Underwriting processes that once took weeks now occur in minutes through AI analysis of medical records, lifestyle data, and risk factors. This dramatically improves the customer experience while maintaining rigorous risk assessment standards.

The Road Ahead

• The integration of AI in insurance represents more than technological upgrade, it's a fundamental reimagining of how risk is assessed, managed, and transferred. As we move forward, the insurers who successfully leverage AI will enjoy significant competitive advantages through improved efficiency, better risk selection, enhanced customer experiences, and reduced fraud losses.

• The transformation is accelerating, driven by technological advancement, competitive pressure, and changing customer expectations. For insurance professionals, understanding and adapting to this AI-driven future isn't just an opportunity, it's an imperative for survival in an increasingly digital marketplace.

• The question isn't whether AI will transform insurance, it's how quickly insurers can adapt to harness its full potential while maintaining the trust and reliability that remain the foundation of the industry.

Final Thought

As we stand at this technological crossroads, the insurance industry faces a defining moment. The companies that embrace AI today aren't just adopting new tools, they're positioning themselves to lead tomorrow's market. The convergence of artificial intelligence with traditional insurance principles creates unprecedented opportunities to serve customers better, operate more efficiently, and build more resilient businesses. In this rapidly evolving landscape, the winners won't be those who resist change, but those who thoughtfully integrate AI while preserving the human elements that make insurance truly valuable: empathy, trust, and the promise of protection when it matters most.