We live in a tumultuous world. You could plane say that we live in a twilight world, for all the Tenet’s fans out there. After years of relative wifely in the investment realm, wideness virtually all windfall classes, things are changing. By wifely we midpoint steady growth and small bumps on the road. Plane the pandemic did not derail the markets, thanks to massive mazuma injections from the inside banks virtually the world. Which ultimately led to spiking inflation… And now we are when to some kind of normalisation of interest rates. Recession fears are growing, as the sudden rise in main rates could sooner unravel the economic growth. Is there nowhere to hide? Could there be a recession-proof investment strategy? Is ESG the answer? Fintech Review asked a few questions to Victor Basta, CEO at DAI Magister.
Tell us increasingly well-nigh DAI Magister. What is your elevator pitch?
DAI Magister is a shop investment wall that operates wideness a range of sectors, such as deep tech and fintech, with a particular focus on climate tech. Our goal is to squire clients in transforming our world one transaction at a time through expert guidance and creative insights. We moreover work closely slantingly CEOs and their investors, helping them identify and nurture the right relationships to scale their organisations.
As a company, we unchangingly strive to promote cutting-edge technology, facilitate sustainable investment, and make a positive contribution to the net zero transition, wideness both emerging and globally established markets.
What is your background, and what is the story overdue the company?
I have well-considered on over 130 transactions wideness 30 years and helped found and build three successful corporate finance firms in the process. My orientation has unchangingly been towards sell-side financings and M&A, focused on investors and founders of later stage growth companies.
Prior to founding DAI Magister, I was founder and managing partner of Arma Partners LLP; global co-head of Broadview prior to its sale to Jefferies, and an Adjunct Professor of Entrepreneurship at INSEAD teaching preparation for exits and large funding rounds. I founded DAI Magister originally to work with growth stage CEOs to help them prepare for and navigate larger fundraises and M&A, with a strong focus from the start on ESG principles.
About 5 years ago we expanded our focus from Europe to moreover imbricate Africa and the Middle East, where we have now wilt the reference counselor for larger fundraises. The idea is to work with growth stage companies wideness multiple growth stages through to exit, something that many firms are simply not set up to do.
How is the demand for ESG stocks evolving?
Demand for ESG stocks is massive, and there is an vigilant shortage of supply of companies once at scale. Investors are realising that climate tech, in particular, extends well vastitude electric vehicles and solar energy grid. Materials, sustainable trading, ag-tech, smart cities, stat capture technologies, space tech, AI, hydrogen and construction tech (to name just a few) are examples of sustainable industries that are attracting investment, considering there is so much governmental pressure and funding to slide rollout in both ripened and emerging markets. The market moreover now understands the importance of tech that boosts sustainability in the short term, so expect to see increasingly and increasingly investment in the understated services and products that will facilitate climate techs firsthand impact.
Ultimately, we need investors to when the right businesses for climate tech to succeed, and a increasingly rounded and considered tideway to financing should midpoint mazuma ends up in the right hands.
Is sustainable investing recession-proof?
Climate investment is a 20-year secular growth trend, and so has shown much increasingly resilience than many other tech sectors, particularly fin-tech, during the current downturn. The value of climate tech funding in Europe dropped a bit in 2022 versus 2021, but nowhere near the fall-off in tech investing increasingly generally.
With the market in its current state, a similar set of rules wield to the climate tech sector as pretty much everywhere else: a solid roadmap to profitability is crucial, and speculative investment is a risky game. So, our translating to sustainable investors who are new to the market is to stick with the cadre principles that have brought them success wideness other industries and when projects that can demonstrate growth.
The one main difference in climate tech is he positive tailwind of regulation and government incentives. In other tech sectors, regulation is only negative, constraining the potential for companies to expand. Weve seen this in everything from semiconductors to social media platforms. In climate, initiatives are happening in parallel in the US and the EU to momentum deployment, all of which serves to increase investors return on investment and shorten the time horizon to profitability on their initial investments. Of course, this has moreover spawned a host of non-viable projects and companies, so investors as overly need to squint at opportunities selectively, but powerfully in many cases investor returns are stuff heightened by government support, plane if indirectly.
Any innovation in fintech increasingly widely that you are really excited about?
While the momentum of the fintech market has stalled over the last year, its important to remember that investment fell from a truly astronomical surge. Nevertheless, the funding for fin-techs is still very upper in wool terms and is undoubtedly still a lot higher than it was a few years ago, so theres telescopic for the industry to grow.
There remains a lot of value to digitising financial institutions, replacing sometimes 30-year-old systems with modern consumer and business-friendly technology stacks that enable banks and insurers to create increasingly customised, and cheaper, products increasingly quickly. Innovation at the cadre of financial and insurance is arguably still in its early stages, and what weve seen so far is only the first step of digitising and modernising the technology layers closest to the customer, not the ones deepest within financial institutions.
Im moreover particularly looking forward to seeing how fintech presence evolves in emerging markets over the next few years, as theres enormous potential for innovation and expansion in these areas. Financial inclusion is in its infancy; the vast majority of the developing world still operates on cash. Nigeria, for example, with 200m people, still operates 80-90% in cash. There still remains a wholesale transition wideness Africa, the Middle East, and parts of south Asia to truly digital payments transacted at a fraction of the forfeit and risk of what happens today.
