Venture capital is a catalyst for innovation and progress in a society as many of the companies created can be a force for good for many people apart from the returns that the investments generate for investors. From our vantage point at DN Capital, we take a unique approach to investing for impact, as well as for returns.
The power of venture capital to drive real-world impact stems fundamentally from its unique structural approach. Unlike the public markets that cater to established entities, or private equity which often requires a certain maturity, venture capital thrives on nurturing the nascent potential of startups that create entire new categories and products that progress society and increase standards of living.
This means we actively identify and invest in a broad range of promising ideas with the potential to create significant real-world impact. Our role is to equip these early-stage Founders and startups with the capital and resources they need to reach a wider customer base and to maximize their positive influence. The word disruption is completely overused these days, but is often what venture investing is all about: backing founders with great ideas and the potential to disrupt incumbent players and create new product and services. where the focus on the customer and the end outcome has often been lost thanks to oligopolies and a lack of competition and to leverage new changes to offer new products and services. .
There are a lot of examples I can share from my more than 20 years in venture where writing a ticket has led to both strong returns for LPs and a lot of positive impact in the world. Here are just a few:
Remitly, our Seattle based fintech company, has facilitated more than 10m immigrants worldwide to send more than $65 billion back to their loved ones back home since we became its first European investor back in 2015. Remitly’s technology simplifies the remittance process and charges low fees, meaning more money gets to where it’s needed.
In the US, my co-founder Steve Schlenker has backed Brigit, a firm that serves individuals in the lowest 10–25% of the income spectrum in the US by providing access to rapid cash advances, which has helped several million individuals avoid more than $1 billion of predatory bank fees for slipping into overdraft and the like.
Steve has also been a longstanding investor in Recargapay, a Brazilian super app that streamlines payments for more than 6m customers in Brazil and has broadened access to financial services to a huge number of unbanked individuals.
We’ve also backed digital authentication and KYC platform Incode since series A in 2021. Incode provides better user authentication, saving $170m every year through preventing fraud, and its technologies will only get more necessary as fraud and cyber risks proliferate.
Just in December last year we invested in Hawk AI, a business that uses machine learning and AI to improve anti-money laundering and fraud prevention at banks, that catches these cases at 17 times the industry average — that’s a lot of criminality, administrative burden, and financial pain avoided for bank employees and customers.
There’s also Wellthy, which is a US platform that links families with virtual caregivers accessed by more than 2 million people, making access and navigation of the care system for those with aging, disabled or chronically ill loved ones much simpler.
Financial inclusion has been another big area of focus at DN. Steve has been very active in this space over the years with the investments I mentioned above and many others — look out for a piece from him where he gives much more detail about his investments and approach. From protecting individuals against exorbitant bank charges to enabling millions of immigrants worldwide to send billions to their families, DN’s investments have catalyzed significant positive change. These initiatives, coupled with substantial returns for our LPs, underscore the efficacy of our investment model.
Finally, beyond the substantial impact areas, we also recognize the value of lighter innovations that enhance daily life. One example is our 2004 investment in Shazam, which continues to help millions discover their next favourite song (I’m a frequent user myself!). In 2022 alone, Shazam helped users identify over 40 million songs, highlighting its continued relevance. Similarly, our 2012 investment in the dating app Happn uses location-based technology to help its 100 million users meet new friends and forge potential romantic partnerships. There have been many marriages and families created via the Happn app.
As we reflect on these achievements, it’s crucial to remember that while venture capital plays a vital role by providing resources and support, the architects of change and impact are the founders. Their vision and tireless efforts are the force behind these transformative businesses, and we are fortunate to be accelerating their journeys.