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Pascal Bouvier (Middlegame Ventures):

Bringing Startups to Luxembourg

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Luxembourg is fast becoming a significant site for fintech investment. We talked with Pascal Bouvier, co-founder of MiddleGame Ventures, about his strategy for developing this exciting market. Interview.

What’s your strategy at MiddleGame Ventures?

We’re a specialized venture investor focused on early stage fintech startups that are thinking and building the future. There have been many waves of fintech over the past fifteen years, from direct-to-consumer businesses focused on payments and savings, through infrastructure services like cloud computing, to neo banks. We’re focused on two ecosystems.  One is the capital markets industry, and the other is the asset management industry from an institutional point of view. They're different sides of the same coin, which we bring together by investing in B2B or B2B2C startups that are rethinking a value proposition or process throughout the lifetime of an asset. We’re also looking at smart automation, as a lot of financial processes are still done in a manual way, using antiquated technology.  

Why base yourself in Luxembourg?

I learned the venture capital business in the US, starting the second fully dedicated Fintech fund in the world. When it came time with my founding partners to do a fund for ourselves, we ended up having more European investors than expected, which shifted our focus. Ten, fifteen years ago there was a gap of entrepreneurial and engineering talent in Europe, but not anymore, which means that European startups in financial services are interesting. The market conditions also help. For a B2B or B2B2C model, Luxembourg has a very special place in financial services, as the number one jurisdiction for the funds industry in Europe, and number two in the world behind Manhattan. So everything is present for Luxembourg to be a magnet for startups in the fund services industry.

How do you make Luxembourg an attractive prospect for startups?

There are several factors to consider for a startup. You have access to capital, as a startup will be interested if it’s easier to raise money. You have access to clients - a startup will want to figure out how a particular jurisdiction gets them that second, third, fourth, fifth client. A network of specialists that can act either as mentors or as service providers or who will connect you to the other people startups need. These are the three main aspects, and while Luxembourg may not have a lot of VCs that deploy capital, at least for financial services it has the other two. By focusing on those factors and highlighting Luxembourg’s strengths as a financial hub, we can show them that Luxembourg is fantastic as a test market where you can quickly get clients, prospects, partners, and momentum

“Luxembourg is fantastic as a test market where you can quickly get clients, prospects, partners, and momentum."

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