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BFD Expert Voices - Private Credit

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Restive Ventures, an early-stage fintech investor focused on AI-native financial services, closed a $45 million third fund, managing partner Ryan Falvey tells Axios.

The big picture: AI is changing the math of early-stage fintech investing.

Zoom in: Restive plans to write checks of $500,000 to $5 million and make 30 to 40 investments out of the fund.

Falvey says Restive aims to be the first institutional money in startups it backs, and then help founders find customers, partners and follow-on investors.

By the numbers: Restive has already made 11 investments from Fund III, Falvey says.

Four have raised follow-on capital at higher valuations, and another two have term sheets to raise at higher prices, he adds.

Fund III portfolio company Hiro, a personal finance app, was recently acquired by OpenAI.

Flashback: Restive's $13.5 million Fund I, a 2019 vintage, is marked at 6.3x on invested capital, Falvey says.

Its $40 million Fund II, a 2021 vintage, is marked at 4x. 

The big picture: The most recent fund will primarily be focused on investments in AI-native financial services startups.

Falvey says the opportunity includes machine-to-machine payments, AI tools for financial operations and new financial products built around autonomous agents.

Between the lines: AI is changing early-stage venture math by letting startups build and sell with smaller teams.

"You can have a business that might get started, have two, three, four people in it, and is generating revenue within days or weeks," Falvey says.

That means Restive needs to invest "almost at inception" to build meaningful ownership, he adds.

Yes, but: Frontier model companies are moving deeper into financial services through partnerships with incumbents.

Anthropic is working with FIS on AI agents for bank financial crime investigations, while OpenAI has struck deals with Intuit and Pine Labs across tax, accounting, payments and commerce.

Falvey says he is not too worried about OpenAI or Anthropic building every financial application themselves.

The bottom line: Restive is betting that smaller funds can win by getting into AI-native fintech startups before they take off.

Restive Ventures closes third fund

AI is changing the math of early-stage fintech investing.

Illustration of a robot arm holding a bag of money. 

Restive Ventures, an early-stage fintech investor focused on AI-native financial services, closed a $45 million third fund, managing partner Ryan Falvey tells Axios.The big picture: AI is changing the math of early-stage fintech investing.

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Restive Ventures closes third fund

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