For Pete Flint, Life Simply Bought Simpler for Startups

NFX has $450 million in its latest fund and wants to find the next Facebook in Latin America

Entrepreneurs’ lives are easier, not the other way around. At least that’s the reading of Pete Flint, a British businessman who is a founding partner of venture capital manager NFX. Founded in 2017 in San Francisco, the firm bets on early stage rounds and has been looking for new opportunities in Brazil, where its portfolio includes Clubbi, Floki and also the regional manager Latitud.

“The world just got easier for startups. No more difficult. Just think about it: it is easier to hire people, there is less competition in the market, the digitization and automation movement is more mature. The only thing that has gotten harder is raising capital,” Flint told Pipeline. “Companies that struggle to survive without constantly capturing may not be viable at all.”

The name of the manager helps to explain the thesis: NFX comes from “network effects”. With checks between US$ 1 million and US$ 3 million, the firm bets on scalable and networked businesses. The idea is to invest in platforms and solutions that get better and more robust as more people connect to the system. NFX generally invests in software companies in large aggregating sectors, such as fintechs, edtechs and proptechs.

Also founder and former CEO of Trulia — a real estate marketplace valued at US$ 3.5 billion — Flint founded NFX alongside James Currier (creator of five startups and angel investor in companies such as DoorDash, Lyft and Patreon) and the Israeli Gigi Levy-Weiss, also an entrepreneur. The trio has more than a dozen startups created and valued, in total, at about US$ 10 billion.

NFX has three funds with more than $1 billion in assets under management. The latest vehicle, launched in October 2021, has $450 million to invest.

In Latin America, the company has already invested in La Haus, also a real estate marketplace, Nuvo Cargo, which operates with logistics in Mexico and the United States. Of the more than 150 startups in the portfolio, at least 10 are in the region – a number that should increase soon, according to the entrepreneur. Brazil is the main market for the neighborhood manager.

Here, the manager looks for the next Facebook. “The adoption of social networks in the region is massive, I believe that there may still be some interesting businesses in this regard. We’ve seen some innovative media coming out of Europe recently and I wonder if there won’t be innovative apps in Latin America that are about to go global,” says Flint.

The ecommerce and logistics sectors have also attracted the attention of NFX in the region. Political risk can be a delaying factor, admits the executive, but given the strength of the dollar, business is still attractive. In the tech liquidity crisis, the manager did not have to drastically change the operation, given the profile of the investments.

“We generally invest in software companies, which are very capital efficient,” says Flint. “Of course, some specific businesses, with more capex, may struggle more, but so far we don’t need to change our strategy significantly.”

Source: Value Pipeline