The Distribution by Juniper Square
00:22:26 · Nick Shalek
[00:22:26] S0: Oh, I was working on, I I was working with a a really cool organization in California called Aspire Public Schools. Aspire had built a data and performance management system internally that was known inside Aspire Schools as Godzilla. It was sort of like this all knowing, you know, powerful beast internally. And a lot of other school systems wanted it. It was a great system for helping, you know, manage teacher performance and do teacher development and help track kids. You know, so much of the challenge in education is figuring out how, given economic constraints and the constraints of the classroom and other things school needs to do, like, how do you deliver a very personalized experience to kids? And it was a great product, and it was a great thing inside Aspire. And actually, Lindsay Ziggenhaegen, who ran that group, and and her team ended up spinning it out, and I got to be a little part of that and turning it into a a company that they built. And it was successful, but just... I had in my mind, I wanted to build a really big venture scale business. And what Mickey Mickey just said, you know, you're you're talking about incompatible things. The the distribution problem in education is so hard. And Mickey had been a really successful financial services entrepreneur. And I think, you know, had been... He had started a a business as a young young guy in in Latin America called Patagon that ended up being like e trade in Latin America and sold it to Santander in in '99 for a lot of money and had gone to Europe and had run a bank inside Santander called Open Bank. It had started a a bank in Brazil, Banco de Limon, and sold that. And and then, you know, started a mobile payments business in Palo Alto, came to The US to do it. So he'd been watching the evolution of finance for a really long time in financial services. And when I met him was sort of this mobile moment when you could see, you know, that mobile was gonna be a really big deal, but we didn't know what the applications were gonna be yet. And Mickey had really the, like, the right insight about the opportunity for people to build new brands, including in the space he loved, which was financial services. You know, you'd had some innovation in payments or some people selling software to banks, but nobody, you know, for a long time had built...
00:24:30 · Nick Shalek
You know, I guess PayPal would be a counter example. But other than that, nobody had built really big businesses. I mean, Square and Stripe had been started, but, yeah, they were they were still pretty nascent. And the thought was that mobile and digital distribution, you know, the the banks could, in theory, compete, but they're gonna be too slow. And there'll be entrepreneurs that get emboldened to go take on this problem of actually serving end customers, and they're gonna use mobile. And the changing point of sale, you know, people won't go to branches in the future was, like, the the really simple thought. And I loved Mickey's thesis. I liked him a lot. But I also told him, you know, sector focused funds. Because he got excited about this idea and wanted to start a fund. And my view was like, I'd learned that Yale sector focused funds don't really work in venture because, you know, the opportunity in venture might be in one place today, but it's gonna be somewhere else tomorrow. And this was... This kind of conversation was was what we, you know, what we built a relationship around. He also, you know, from the very start, he wanted to and then we wanted to, when we started working together, make Ribbit an international firm. Like, we thought this opportunity would play out all over the world. And while I'm a coastal American, he's very much an entrepreneur who had built in a lot of places. And so the aspiration was to build a global firm or a firm that operated from The US but invested globally. And that was also anathema, you know, in venture. You were supposed to be a generalist, sage disciplined, and geographically focused. You know, famously, Sequoia. I think Don Valentine said, you know, we only invest in companies that we can ride our bikes to, you know, because you wanted to have that close personal relationship and understand all the context. And so we set out to do that thing, but to do it globally. And that was kind of the start of Ribbit.
00:26:16 · Brandon Sedloff, Nick Shalek
[00:26:16] S1: So that was, what, roughly thirteen years ago? [00:26:19] S0: Yeah. It was 2012 when we officially started to the first fund. [00:26:23] S1: So to... I mean, if if people Google Ribbit, they'll see all kinds of amazing accolades for the organization. I love what you said about, you know, backing rebels who challenge the status quo. Help me just... You know, help our listeners orient kind of Ribbit today and maybe, you know, size, scale, you know, known for fintech specialization, portfolio companies, kinda any... Anything. And, you know, if you don't promote yourself, I will help you, but, know, help help us orient kind of what the firm does today and kinda where you're where you're focused, you know, where you have the most conviction right now.
00:26:57 · Nick Shalek
[00:26:57] S0: Yeah. Our our thing, I I'd say from, you know, kinda from a a principle standpoint is it's concentration and conviction in in all things and and compounding. Those are, you know, kind of the, I guess, call... We'll call them the three c's that that drive a lot of the way that we think. We've... You know, we're now on, I guess, stats wise, we're we're now on the the twelfth fund or something. We've we've had a lot of different vehicles. We've always tried to undersize our funds so that we can be flexible in the moment and have had the belief that, you know, you take some vintage risk if you invest, you know, in a small number of companies in a fund, but that's more our problem. Our LPs are highly diversified across a lot of managers and asset classes. And so we've always, you know, we've we've always had the attitude that we should have a a smaller number of investments per fund than other people. That's led us to have, you know, have more funds, and I I can say more about that. But I guess by AUM, we've gotten quite large. Some of technology industry has grown a ton in the period that we started. So... But we've we've actually made our core funds smaller. And we've done that in a period of time where the asset class is getting bigger and other funds are are raising larger and larger funds. And I think that makes a lot of sense strategically for them. I think for us, going smaller has been a commitment to the idea that we wanna find, you know, we wanna find these entrepreneurs, these these rebels, and we wanna try to be their most consistent, pragmatic, trustworthy partners through cycles of greed and fear and change and and be there for them along the way. And you just can't do that with hundreds of companies. You you you can only spend that kind of time and attention and be that type of partner with a small number of bets. So we'll try in a fund to, you know, invest in 10 or 12 core positions. You know, that that might be six or seven or eight core investments a year and plan to work with those founders if we can for a decade or longer. I mean, with some of the the early companies we backed in Ribbit one or two, we're still buying their stock or, you know, going to their board meetings, talking to the execs and team all the time. And that's what we're... Was trying to do with the firm.
00:29:14 · Brandon Sedloff
[00:29:14] S1: Before we we kind of advance, I have a I have a lot more questions. But, you know, for our listeners who aren't familiar, you know, kind of a sampling of some of the portfolio companies or companies' founders that you've backed, help us help us understand.
00:29:27 · Nick Shalek
[00:29:27] S0: Yeah. Well, we we... We've invested on names, some companies, Coinbase, Robinhood, Stripe, Credit Karma, MercadoLibre, Juniper Square, of course, you know, extremely importantly. So I'm starting with the the the fintech entrepreneurs we backed. A bunch around the world that listeners may not... May or may not know but have been, you know, phenomenal companies. Maybe I mentioned New Bank or Groww in India. Just went public this year. It's the leading stock brokerage in in India. We backed an amazing founder in Korea in a company called Toss. Some great entrepreneurs in Southeast Asia, Forrest. Li and and team who run a company called Sea that's become a a really big, impressive Internet company. A bunch of a bunch of great, great folks. Revolut in Europe, which has, you know, become a monster business, has really special culture and team. More recently, we're... You know, because the... I'm talking about things we invested in, you know, seven, eight, nine years ago. We've been investing quite a bit in the AI, you know, broader AI space. And in, we would say, the intersection of money, knowledge, and power, and especially those intersections, things around, you know, entrepreneurs building capabilities that apply... You know, that that can make every organization better. That would be companies like Decagon, which is an AI platform for customer support. Or recently, we announced a round with Listen Labs. That's a a company building a really amazing tool that we were using internally. You can think of it as an agentic version of customer research like Qualtrics. But my opinion, you know, easily 10, maybe a 100 times better product experience when when you use it. So a wide range of things, but that maybe gives people a sense.