January 27, 2022

Interview with Andreas Iten, F10 CEO and Co-Founder

A few months ago, F10 and Italian Angels for Growth (IAG) signed a letter of intent to work together to strengthen the global FinTech & InsurTech Startup ecosystem. The partnership between F10 and IAG is a strategic initiative whose aim is to increase investment opportunities for startups graduating from F10 programs. The recent round led by IAG for F10 alumni company Sonect was just the beginning.

In this interview we will get know Andreas Iten, F10 CEO and Co-Founder, who will tell us how the global accelerator with offices in Zurich, Singapore, Madrid, Barcelona works, as well as his personal view on the future of Fintech.

Could you please give us an overview of your background?

After I finished my studies in business informatics here in Zurich in the late 90’s, I had my first startup experience in “FinTech” and founded a company that allowed customers to trade stocks on the internet. Even though our solution was quite revolutionary at that time, it was very bad timing. The internet bubble blew before we were able to scale, and I ultimately had to look for another job.

After this, I worked for about 10 years in different management positions in various industries before I joined the Swiss Stock Exchange, first as external consultant and later as CIO for the division financial information. In 2015, I co-founded F10 Fintech Incubator & Accelerator as a spin-off from SIX and since then I’ve been leading the global organization as the CEO and Chairman. SIX decided to start their own corporate venture capital fund in 2018 and I was mandated to define and implement the strategy, build up the team and conducted several investments. I’m currently involved in various early-stage FinTech companies as a member of the board as well.

You are the co-founder of the SIXHackathon (Europe's largest Fintech coding contest), co founder and CEO of F10, a global fintech incubator & accelerator with offices in Switzerland, Singapore and Spain. Can you tell us more about the role of F10 in the innovation ecosystem?

F10 on the one hand is an ecosystem of startups, corporates, and investors with the purpose to reshape global finance and insurance. It is very much about connecting the dots and unlocking value pools for all parties. On the other hand, F10 as a for-profit company has its own business model with two main focus areas: We are an early-stage investor and run several startup programs for companies in the FinTech, InsurTech and DeepTech space and we provide so-called open innovation-as-a-service to our corporate partners. Here we scout, screen, select and matchmake the most promising startups with the strategic needs of our corporate partners (banks, insurance companies and tech companies). Our 5+ years of experience working with FinTech startups helps us to attract the best talent and to shape a culture on the corporate side, where collaboration and or investments can really happen.

What do you think are the most significant challenges for those who decide to found a start-up?

We are not yet running out of good ideas or problems to solve with technology. The financial and Insurance industry still offers thousands of opportunities to better serve customers, make things more efficient or to remove intermediaries. I believe finding the right team, hitting the right window of opportunity, and raising sufficient funding to grow fast is the main challenge for every startup in our space. Fundraising is still a big pain for the founders and very inefficient. We from F10 are working hard to help our companies getting funding and traction.

What differences have you noticed around the world in terms of interest towards Fintech?

As we are currently active in Asia (Singapore) and Europe, we still see a general big interest in FinTech with funding levels for FinTech startups at a record high.

We see that adoption of FinTech solutions in Asia is very fast, especially in the consumer space. Asian customers’ digital affinity seems to be much higher than in Europe.

In Europe we’ve noticed quite some differences between countries. Generally, though, banks and insurance companies now take it seriously and start to embrace FinTech solutions.

What, in your opinion, is the future of Fintech? What trends and sub-sectors will play a key role in the near term?

The adoption of digital assets, crypto and NFT’s won’t stop. The user-friendliness of so called DeFi (decentralized finance) products is still lacking but will make significant progress in the next few years. The metaverse will create virtual economies, where many of the real-world needs will be replicated (e.g., loans to buy virtual goods).

There is also a big demand for solutions in the sustainable finance space. We expect to see more startups entering this vertical as soon as a certain level of standardization on ESG data has been achieved.

Open banking and embedded finance will continue to grow after the first illusions about the overall potential have vanished. The incumbents start to see the opportunities and focus less on the risks. We expect that this will create additional opportunities for startups to create sophisticated tech solutions covering real customer needs.

Valuations (especially in Fintech) have recently reached sky-high records. What is your take on this phenomenon and what do you believe are the consequences of this trend?

I’m not an expert in economics, but I see that there is a lot of money around that needs to be invested. People see private equity and venture capital as a way to mitigate low interest rates. Many of these investors don’t see the risks, don’t look at unit economics, ignore red flags and are willing to pay very high prices. All of this results in high valuations. As I have personally learned in the year 2000 internet bubble, things can go south very fast. That’s why I think doing proper due diligence and rejecting overvalued cases is still the better choice than blindly following “competitive” deals. We also see a trend that investors now want to go pre seed or seed. As having been active in this stage for several years, I can only say: partner with someone who knows how to assess such companies. There are little to no numbers available and you really need to understand trends and have a good sense for talent and team.

What are in your opinion the barriers that still prevent European start-ups to scale as fast as in other geographies?

Europe, compared to the US, which is obviously the benchmark, is much more fragmented. Even if the regulation for FinTech is standardized, you face different languages, cultures, market needs etc. I wouldn’t say the problems is the access to venture capital anymore, but the risk appetite of European investors is still not comparable with the US. In Europe, it takes longer to raise big money. We are starting to see very positive signals from different ecosystems in Europe, where unicorn founders who exited become the next generation of VC’s backing young companies. This is what it takes to catch up. Maybe, because of the crazy valuations in the US, Europe will become the place to go for VC investors.