Morris said QED, is bullish on the sector regardless of whether prices are up or down, when asked about the impending slowdown in funding that has set in. Founded by Morris and Frank Rotman in 2007, QED started off as a family office, but later transformed into a VC fund. QED, initially funded through internal capital, has backed some of the biggest fintech startups globally like Remitly and SoFi in the US, Klarna in Europe, and Nubank in Brazil.
“It is clear that there’s been a significant cooling off in the public markets in the US, which is impacting the private markets,” Morris said in an exclusive interview to ET. “It’s going to roll all the way through, and then it will come back again, because fundamentally, we’re in the middle of a series of secular moves that are going on in our industry.”
According to Morris, with positive macroeconomic growth, the mobile revolution, favourable regulatory regime and the abundance of talent, India is one of the most important market for the firm outside of the US. QED set up shop in India last year.
Morris, who cofounded and sold Capital One, a consumer-focused lending firm in the US, was on the Forbes Midas Touch list 2022.
QED has positioned itself as a multi-series investor to infuse capital across pre-seed/seed, series A/B and growth stage. It writes cheques starting below $1 million and going up to $40-50 million to back companies in the fintech sector.
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The firm has already invested $150 million in India since last year. These are spread across neo-bank Jupiter, earned wage access provider Refyne, open finance firm Upswing, fintech startup FPL Technologies, which operates digital credit score platform OneScore and edu-fintech startup Financepeer.
In September 2021, QED closed a $1.05 billion fund consisting of a $550 million Fund VII and a $500 million Growth Fund. Globally, the fund has invested in more than 175 companies across 14 countries. Most of its portfolio is based in the US.
It will hit the fundraising road again next year, by when it is expected to deploy its current pool of capital. “We will raise a new global fund sometime next year,” Morris said.
He refused to put a figure on how much the firm will invest in India but said the region continues to be an important market.
The firm is looking to ramp up its presence in India by expanding its investment team. “We will have a significant team on the ground here, focused on Southeast Asia and South Asia in general. But whether it will be here in Mumbai, in Bengaluru or Singapore is to be decided,” he said.
The firm will also venture into Web 3.0 and the crypto sector, Morris said. “We are carefully evaluating this space. We might not be the first and forward when it comes to investing in the sector. But we will wait to see how it plays out,” he said.
