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Ribbit Capital Debuts With $100M Early-Stage Fund

25 January 2013

(VentureWire)¬†Announcing a $100 million debut venture fund, serial entrepreneur and financial-services veteran Meyer “Micky” Malka has launched an early-stage investment firm called Ribbit Capital.

Based in Palo Alto, Calif., and investing in startups world-wide, Ribbit has already quietly participated in four deals. All aimed at remaking the financial-services industry, the firm has backed high-end online pawn shop Borro Inc.; payments-technology company Fuze Networks Inc.; Brazilian accounting services company ContaAzul; and small-business lender Capital Access Networks Inc.

Mr. Malka, the sole general partner for the fund, has started five financial-services companies–the first at the age of 18–in Latin America, Europe and the U.S. Mr. Malka was also an early investor in and now serves on the board of personal-loan company Wonga Ltd., as well on the boards of Brazilian companies e-commerce site Peixe Urbano and merchant bank Banco Bracce.

“There’s a perfect storm” in financial services, he said, adding that financial institutions have cut–and, in some cases, stopped–investing in research and development, while consumers are now very comfortable sharing personal financial information online. “We see this as the beginning of a long [five- to 10-year] cycle,” he said.

Mr. Malka began raising the fund last March and closed it in July 2012. Although he initially targeted around $70 million to $80 million, he found enthusiasm from institutions, high-net-worth individuals and two banks–multinational Spanish banking group Banco Bilbao Vizcaya Argentaria SA and Silicon Valley Bank –to be strong, so he increased the size to $100 million and included them all as LPs.

“The magic number for me is in the low hundred-million dollars. There’s something about large funds that sometimes makes people irrational,” he said, adding that the current size would keep him “in check.”

Mr. Malka said he expects to back 12 or 13 companies from the first fund. Investment size will vary, with the option to do follow-on funding when appropriate. He’s hired Nick Shalek to help him evaluate investments. Mr. Shalek previously served as founding partner of investment firm Sutter LLC, as well as an entrepreneur in residence at Aspire Public Schools.

Ribbit will target startups operating in countries with high online-banking penetration and a constant financial regulatory environment, a list that Mr. Malka said includes Canada, the U.S., Brazil, the U.K., Spain, Italy, South Africa and Turkey. Key areas will include lending, payments, insurance, accounting, tax preparation and personal financial management.

Mr. Malka indicated he plans to be a hands-on investor in the startups he backs.

“Along with their wives, mothers and friends, I’m a top number on the speed dial” of entrepreneurs he has backed, said Mr. Malka. “Be accessible. That’s key. That’s our mantra.”