Finix Founder Creates Opportunity for Diverse Investors

A growing number of startup founders express a wish for a more inclusive investor network. Richie Serna, founder of Finix, actively pursued this goal and successfully implemented it.

Finix's Funding and Mission

Since its establishment in 2016, Finix, a payments infrastructure company, has secured over $95 million in venture capital. Investors include prominent firms such as Lightspeed Venture Partners, American Express Ventures, and Visa.

The San Francisco-based fintech company recently completed an extension of its Series B funding round, raising an additional $30 million last August. Finix aims to empower all businesses with comprehensive payment capabilities, and reported a more than fourfold increase in transaction volume between Q2 2019 and Q2 2020.

Expanding the Investor Base with an SPV

Richie Serna, a first-generation Mexican-American and the first in his family to attend Harvard University, sought to further diversify Finix’s ownership structure. He established a special purpose vehicle (SPV) which successfully raised $3 million.

This SPV enabled over 80 investors from historically underrepresented groups to become stakeholders in Finix. Serna emphasized the personal significance of this initiative, highlighting the importance of diverse representation within the company’s investor base.

Addressing Systemic Underrepresentation

The initiative extended beyond simply diversifying the cap table. It aimed to provide Black and Latinx investors with access to investment opportunities that might otherwise be unavailable. Data from a recent NVCA-Deloitte Human Capital Survey reveals a significant disparity, with 80% of investment partners at VC firms being white, and only 3% identifying as Black or Hispanic/Latinx.

Serna explained to TechCrunch that this effort is about fostering a more equitable landscape. It’s intended to help historically marginalized groups build a demonstrable investment track record, opening doors to future opportunities, including potentially launching their own venture funds.

A Commitment to Ongoing Diversity

Finix is committed to continuing this practice. The company will allocate 10% of all future funding rounds to Black and Latinx investors.

Jewel Burks Solomon, managing partner of Collab Capital and head of Google for Startups, U.S., described the opportunity to invest in a rapidly growing company like Finix as a significant breakthrough. She noted that such opportunities are typically reserved for a select, well-connected group of investors.

Solomon, based in Atlanta, Georgia, underscored that access is a key driver of wealth creation. Providing access to those who are traditionally excluded can be transformative.

Empowering Diverse Investors and Operators

Tiffani Ashley Bell, founder and executive director of The Human Utility and now a Finix investor, stated that the SPV provides a crucial opportunity for “talented, knowledgeable investors and operators from diverse backgrounds – especially Black and Latinx people – who have traditionally been excluded from investing early in high-potential startups.”

Strategic Executive Additions

Alongside fundraising, Finix focused on attracting experienced senior executives. The company successfully recruited individuals with the expertise to support its long-term objectives, including a potential future initial public offering (IPO).

Fiona Taylor, with experience leading Solar City’s IPO and acquisition by Tesla, now serves as Finix’s COO. Ramana Satyavarapu, a founding member of Microsoft Office 365 and former engineering leader at Google and Uber, has joined as CTO.

Growth and Future Outlook

Currently, Finix employs approximately 100 individuals, with 50% working remotely due to the pandemic. The company intends to double its workforce within the next year.

Regarding the possibility of an IPO, Serna stated that Finix is focused on long-term growth and building a sustainable organization. He believes the recent executive additions demonstrate the company’s strategic direction.

Serna expressed his enthusiasm for the potential of the SPV to further diversify Finix’s cap table. He acknowledged the early support he received from Black and Latinx investors and expressed his desire to reciprocate by creating opportunities for others.