Insights

Helping Accelerate Fintech Growth Companies Through Investments And Resources

May 14, 2024
by: Dina Lyon

By Amit Chowdhry. Originally published May 6, 2024 on Pulse 2.0.

Pulse 2.0 interviewed Cohen Circle CEO Amanda Abrams. Highlights from their conversation are below.

Amanda Abrams’ Background

“I started my career in finance as a consultant, decided after a year it wasn’t for me, and went back to school to become a lawyer. From there, I spent over a decade as a corporate lawyer – first at a large multinational law firm, then at a boutique firm, and finally in-house at a public fintech company – before coming back full circle to the finance side to help build out Cohen Circle as an asset management platform.”

“Although uncommon, my experience as a lawyer provided a fantastic foundation to move into an investing role and become a business executive. It provided me with a diverse skill set in understanding how to dissect, analyze, and think strategically through issues and processes, as well as an in-depth understanding of driving investment and exit transactions. But perhaps more importantly, from working as a lawyer with Betsy and Daniel Cohen, the founders of Cohen Circle, I was able to observe how two forward-thinking fintech operators approached investing and get to know them personally. So, when I decided to switch from law back to finance, I was thrilled to join Cohen Circle to build out a unique platform with this team.”

Evolution Of Cohen Circle’s Thesis

“Our founders, Betsy and Daniel Cohen, have been fintech pioneers for decades since founding The Bancorp in 1999, where they were at the forefront of fintech innovation by creating cutting-edge sponsor banking partnerships with the earliest fintechs, including PayPal, Chime, Varo, and others, and giving these disruptive platforms access to traditional financial rails. When we founded Cohen Circle in 2018, we primarily focused on providing late-stage fintech companies with transformative capital and access to our extensive network in the banking and fintech ecosystems. Over time, we have broadened our focus to invest across the capital stack in the fintech, health, and impact spaces.” 

“Our thesis has always centered around seeing opportunities where others don’t: finding the ‘negative space,’ or areas that are not being served today, and building or investing in platforms that can provide those services. Recently, we have added an impact lens to our investing focus as we believe access to essential health and financial services remains an unaddressed global issue. Rapid innovations in technology are generating and amplifying impact by expanding the accessibility and affordability of these services. We see a growing opportunity in this ‘negative space’ and are well positioned to address it thanks to our extensive global connectivity with leading institutions across both the public and private sectors.”

Significant Milestones

“A few years back, we started seeing regulations being proposed and subsequently passed concerning board diversity, including a recent rule generally requiring that each NASDAQ-listed company have at least one female director on its board by a specified date. We are a women-led firm with a trailblazing woman founder in Betsy Cohen and, while these proposals were a step in the right direction, we wanted to encourage companies to think of a single woman director as a floor and not an achievement.”

“In 2018, well in advance of the rule’s approval by the SEC, we did just that; we put together the first all-women board of a NASDAQ-listed company. Doing so was not only a prudent business decision given the caliber of women that we’ve been humbled to work with, but also demonstrated to the market that identifying one qualified woman shouldn’t be thought of as difficult and that it was more than possible to have an entire board composed of highly qualified women.”

Investment Success Stories

“In 2016, we took an integrated payments company, CardConnect, public via a SPAC transaction. At that time, well before the more recent SPAC ‘boom,’ most investors were not familiar with this unique transaction structure and avenue to access public markets and we accordingly spent a significant amount of time engaging both with CardConnect and public markets investors to educate them in this regard. We spent the better part of a year working on the transaction, curating a fantastic investor base, and successfully closing the deal with only a few days to spare prior to the vehicle’s expiration. At that time, I went on to join CardConnect’s executive management team, and within less than a year, CardConnect was acquired by another public company at a 50%+ premium. That exit was a win for all investors, but also a personal win for me as it was the catalyst that pushed me to join Betsy and Daniel Cohen to help them build out Cohen Circle.”

Industry Focus

“Fintech has always been one of our primary core competencies; it’s in our DNA, and we are continuously looking at opportunities in this space across the capital stack. More recently, we are investing in both the fintech and health sectors with a social inclusion lens. Both sectors are in major and parallel transformations, including with respect to digitalization, regulatory landscape, and unbundling/rebundling trends. Taking into account these transformations combined with shifting consumer demands, preferences, and demographics, we think these spaces will continue to provide huge opportunities to achieve impact and outsized financial return.”

Differentiation From Other Firms

“We invest in companies that exist within ecosystems that our team has spent decades immersed in as founders, operators, and executive leaders. Our collective decades of operational experience provide a unique lens through which we evaluate businesses and a differentiated value-add for our portfolio companies. The sectors we invest in are highly technical, regulated, and complex. As specialists who have been building companies in these spaces for decades, our intimate understanding of many of the nuances at play enables us to help founders unlock value through targeted, actionable insight and strategic advice.”

Challenges Faced

“On a personal level, although I developed a strong skill set during my corporate legal career, moving to the investment side necessitated in many ways a major shift in perspective. For example, the way I perceived risk was almost entirely shaped by legal outlook and analyzing worst case scenarios. My default was to always think first about risk-mitigation; being on the business side I had to actively work to instead view actions through the lens of appropriate risk-taking. Betsy Cohen was a fantastic mentor to have during this transition period, having successfully moved from law to business over the course of her own career, and both she and Daniel pushed me to consider business decisions from a lens outside of my comfort zone and to grow personally in that regard.”

Future Goals

“We are continuing to grow our footprint in financial and health services impact investing, with an eye towards investing in companies where we can meaningfully contribute to the acceleration and growth of the business in a quantifiable way. We have always approached our role as an investor as one where the strategic value we bring to the table is equally, if not more important, than the capital we provide. Applying this approach in our impact investments has dual benefits as our strategic support can accelerate both the financial and the impact trajectory. We are excited to support transformative companies and inspire founders as they scale both in terms of achieving business goals and delivering impact.”

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