Technology entrepreneurs – Prolific commissioners of superyachts? On 17 May 2020 the leading UK paper the Sunday Times published its new list of the wealthiest people living in the UK. Listing some of the wealthiest people on the planet who choose to make the UK, and London, in particular their home, there were several new faces including two new entrants who have made their fortunes fast with technology businesses. In their case both were financial technology businesses. Financial Technology, fintech for short, is what it says on the can, a business that uses technology to provide financial services.
In the case of these new multi-millionaires it is banking. Nikolay Storonskyco – founder of Revolut, one of who co-founder of Monzo. Both are based in the UK which has become if not the world’s fintech centre, then at least Europe’s fintech centre, and both of these neo-banks are already expanding fast across other geographies.
Whilst they may have some way yet to go before they join the ranks of the global super-rich they are well on their way. And, if they follow the pattern of many of the world’s other super-rich technology entrepreneurs they will soon be joining the ranks of the world’s superyacht owners.
Fortunes are still to be made in technology-based businesses. It is not only the founders and innovators who can emerge with massive fortunes. The financiers and investors who stand behind them are in line to share in the spoils of massive wealth creation alongside those who come up with the ideas, the new technologies and the new applications.
The financing ecosystem has expanded considerably over the last 10-years, and underpin not only fintech but all new technology based businesses. From larger cohorts of “Angle” investors prepared to back the innovator in the very early days, through the Venture Capital (VC) community, and then the Private Equity )PE) industry.
A more recent entrant has been the Corporate Venture Capital (CVC) funds backed by some of the world’s largest corporates wanting a share of the opportunities and the wealth which otherwise they will likely miss out on.
Large corporates are increasingly aware that they are anything but fleet of foot, and real innovators want to work anywhere but a large impersonal corporate environment. So the world’s biggest companies run the risk of losing out on next-generation ideas and technologies. Often the only way they can participate is by investing in the innovating firms themselves early on in their development.
Large corporates are further compelled to do this by the fact that with the extended availability of private financing options the new and fast growing and innovative companies never have need to come to the public markets for funding as they can get all the investment they require whilst remaining private. So the corporate cannot even acquire an opportunity at IPO as these fast-growing firms may never IPO and if they do come to the public markets they will probably have passed their main growth phase and there is then less up-side for the corporate to seek to acquire.
So the world’s fast growing technology, and especially fintech (Technology entrepreneurs), sector is one to watch. It is likely to produce the largest number of new members of the world’s super-rich community, and will do so in a far shorter time then more mature sectors which are often less capital light and less easy to scale globally.
So, if you are not an innovator or a tech wunder-kid about to start one of these businesses is it possible to share in the wealth generation that is already being seen in this sector? We have seen above that increasingly technology companies are staying private for longer as they have no need to access capital through the public markets through an IPO, traditionally where people would be able to participate.
The private financing ecosystem (VC and PE companies) are typically closed to all but the very wealthy, and institutional money.
Prolific commissioners of superyachts: So, how do you participate in these fast growing technology companies if they are privately held, and they are financed through an effective closed-shop of VC and PE firms?
Three listed funds that specialise in fintech investment are Augmentum Fintech plc, GLI Finance and Sure Ventures. As these finds are listed anyone can buy their shares, and participate in the upside that comes from the underlying investments, which in most cases is in fintechs that are still not available on the public markets.
Augmentum invests in mainly UK, but increasingly European fintechs and already has an impressive portfolio of some leading financial technology companies.
GLI Finance invests in alternative financing platforms that service SMEs in Europe, North America and Africa.
Sure Ventures invests in software businesses serving fintech firms, the Internet-of-things (IoT) and users of virtual and augmented reality.
It is possible to share in the potential growth of this sector that until now, as night follows day, has producedmassively wealthy people who then go on to buy yachts as their personal reward for success.
Paul Allen the Microsoft co-founder owned Octopus, a 414-foot super yacht (which in 2019 was rumoured to be for sale for USD325 million) and which carried two submarines and had two helicopter pads. Another Microsoft alumni, Charles Simonyi, also bought a himself a yacht, the 233-foot Skat.
Google co-founders Sergey Brin (Alphabet President) owes the 240-foot Dragonfly and Larry Page the 194-foot Senses. And former Google CEO Eric Schmidt owns the 194-foot Oasis
Oracle co-founder Larry Ellison owns the 288-foot Musashi acquired 2013. Prior to this he owned a bigger 454-foot yacht Rising Sun which was sold later to David Geffen the US music billionaire.
Steve Jobs, the late Apple CEO, commissioned a yacht but he died in 2011 and never saw his 256-foot yacht, Venus, which was not completed until 2012.
Skype co-founder NiklasZennstrom has had a series of racing yachts, all called Ran (he is currently on his seventh versioncalled Ran VII)
Barry Diller, chairman of digital media company IAC co-owns, with his wife the fashion designer Diane von Furtsenberg, the 350-foot Eos.