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Deal Talk

Blythe Masters, founding partner at Motive Partners: In fintech dealmaking, you shouldn’t shy away from complexity

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Blythe Masters, Founding Partner of Motive Partners, joined Moonfare’s CEO and founder Steffen Pauls for the April edition of the Deal Talk series. Deal Talk events are regular fireside chats with leading global private equity dealmakers.

A seasoned investor and fintech expert, Masters joined Motive in 2019. She’s responsible for sourcing and executing investments with a focus on strategy and growth of the businesses that power the financial economy. As of April 2023, Motive has approximately $4.7 billion of regulatory assets under management. 

Before joining Motive, Masters served as the CEO of Digital Asset Holdings, a leading enterprise blockchain fintech firm. Before that, she spent 27 years at J.P. Morgan, serving in different positions including as head of global commodities and CFO of the investment bank. 

In a conversation with Pauls, Masters discussed her experience as a dealmaker, shared her thoughts around AI breakthroughs, as well as revealed what she looks for in the entrepreneurs her firm backs. Some of the highlights include:

Lessons learned from the past financial crisis 

“Having lived through periods of turmoil you learn what it takes for a financial service business to survive and thrive, but also what it takes for them to fail. These lessons helped inform my career as an investor; particularly in understanding how demand for financing technology is driven by cycles in the economy.  As a fintech investor, you're less sensitive to the ebbs and flows of market conditions. The companies we invest in are less affected by market volatility because they provide mission-critical infrastructure that help defend competitive moats or better serve customers.”

On the impact of the generative AI 

“Current AI development reminds me of the early stages of Internet adoption. [...] However, the implications of generative AI are more obvious. Many activities that are computational, research, reading or writing intensive are going to be threatened and potentially displaced in large part by AI-driven capabilities. [...] But AI will also contribute to how we learn and teach the next generations the skills they need to survive in the workspace.  Fintech will be one of the areas most affected by the advent of AI tech, generally in a beneficial way.”

Approach to dealmaking

“It’s critical to start early developing proprietary relationships with founders. Otherwise, you lose the opportunity to get to know the businesses. It’s also important not to shy away from complexity or opacity. A lot of fintech businesses are harder to understand, meaning there’s a legitimate role for having specialised knowledge and focus. This can help you develop convictions around areas where there's complexity and where you need to think a couple of steps ahead. Finally, we learned how to avoid guesswork. We don’t see value in selecting winners or losers in the very early stages. As tech matures, we invest in companies that already have the competitive moat and the network. We see the value in monetising these networks.” 

‍Important Notice: This content is for informational purposes only. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Opinions in this interview are not Moonfare's and Moonfare do not take responsibility for this. Past performance is not a reliable guide to future returns. Your capital is at risk.

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