Emanuele Larocca on Building a Young Firm and Watching Fintech Rebuild Around It

Emanuele Larocca is a Principal at 14Peaks Capital, a Zug and Miami-based venture firm backing B2B Fintech founders across Europe and the US.

14Peaks was founded in 2023 by Edoardo Ermotti. Around 22 investments in, the team is now raising Fund II with a sharpened focus on B2B Fintech, doubling down on the segment where they believe their edge in knowledge, network, and access is strongest.

14Peaks is one of the funds we are closest to. We have known the team since the early days of the firm and have stayed close as their thesis has sharpened.
What makes Emanuele's perspective interesting is that 14Peaks was built the same way we are building BlackWood. Young, sharp, and unafraid to keep re-cutting the thesis as the market moves.

We sat down to talk about building a young firm in the current market, how a thesis actually evolves from Fund I into Fund II, and what B2B Fintech looks like on the other side of the AI wave.

Q&A

1. 14Peaks was founded in 2023; BlackWood is roughly the same vintage. What has been the hardest part of building a young firm over the last three years, and what has been the most underrated advantage of starting now rather than ten years ago?

As a young firm, we need to be more upfront and constructively vocal about what makes us great at our trade: compared to established players, whose reputation may already be known by other stakeholders, we have to showcase our value to everyone around the table from the get-go, and back it up with facts. For example: great founders are approached by a large number of investors, and have to choose quickly among whom to take money from. Economic terms alone do not cut it anymore, and as an emerging investor you cannot just claim you can support them with network and access post-investment, but you need to frontload tangible evidence already during first conversations. Competing without a pre-established brand requires domain knowledge depth and consistency, in order to build access and reputation that compounds. And that is difficult to build in a short time span.

I think there are lots of advantages to starting now. Firstly, the VC industry overall has matured a lot, which translates into higher credibility as an asset class for prospective investors, as well as more abundant and cheaper core services (legal, admin, etc.). Secondly, it has never been more possible to operate at scale while maintaining a lean team: just consider the very underrated fact that post-COVID one can run due diligence, relationships and internal alignments via video meetings. We also have access to affordable automations that simplify our operations further, starting from elements as simple as call transcripts, to research and analysis automations (e.g., humble shout-out to our portfolio company Model ML on this) to automated admin work. Practical time and cost efficiencies right there, which we could not do without anymore. Finally, the secondary transaction market has picked up materially compared to the past, changing the liquidity options for an asset class that was otherwise reliant exclusively on M&A or IPO listings to provide liquidity.

2. 14Peaks started with a broad B2B software and fintech mandate, and Fund II is now specialising fully on B2B Fintech. What actually happened between Fund I and Fund II that made verticalization the right call?

Very simply, it was an organic, yet strategic choice based on the learnings made with Fund I. This first product was based on a core knowledge and access edge, delivered to two synergistic blocks: B2B software applied to both the financial industry and adjacencies such as data & analytics, human resources and legal. However, as Fintech became the increasingly clear denominator among our network, LPs' profiles and some of our best performing portfolio companies, our insight and access in the financial industry compounded into a value-creating flywheel. We are firm advocates of the idea that focus is key for early-stage companies, so we acted on this principle ourselves.

That is to say: we knew financial services were an area we could play with an "unfair" advantage, but took the view that a first vintage's verticalizing straight away was probably overly confident, and we preferred to validate our intuition before jumping fully into B2B Fintech. Long story short, it did, and the choice to specialize has paid off in many ways. Among these, to the earlier point on domain expertise and consistency, this helped us channel our energies towards specific sub-verticals – allowing us to create compounding value around our platform: capital markets, payments, compliance, accounting and payroll & benefits.

3. Every firm is now under pressure to have a view on AI. How do you make sure your thesis actually evolves with the technology, rather than chasing whatever category is hot that quarter?

You have a great point: our investment thesis must evolve alongside the technology, which is exactly what AI is. Being industry specialists, we put front and center the insights we get straight from the industry insiders and advisors, which help us form a view on where the market is going, supported by the technology impact. In the case of AI, we had to quickly realize that moats in Fintech shifted from end-application delivery (e.g., the ability to ship features and capabilities) to a multi-layered approach based on a combination of workflow mastery as a basis for true work delegation, infrastructure & regulatory posture to ensure operational reach, and/or tech-enabled services as the new delivery of choice. Equally, I can also think of what did not change even in the face of AI: proprietary data was confirmed – and possibly strengthened – as a fundamental basis of differentiation; trust and compliance posture remained an absolutely key enabler to winning sophisticated buyers.

As a concrete example, we are deep in agentic payments not because it is the current AI-adjacent flavor, but because we take the house view that companies of all sizes will want to equip their machines (e.g., their agents, for now) with the ability to transact independently, say, on atomized procurement decisions such as buying compute or enriching datasets with individual data purchases at volume. The advancement in the payment protocol layers (e.g., x402, AP2, MCP) and card networks' own responses point in the same direction, and we are looking at founders creating the next-generation company in this space because of the value outcome – with the underlying tech stack being the enabler, not the goal.

4. B2B Fintech is a broad label. When you look at the companies you have backed so far, what is the through-line, and what is the specific bet you keep making?

In short, the through-line is companies that either sell to financial institutions or have a product with a strong financial component. Look at Zocks, Model ML and ThreatFabric: while the categories look unrelated (AI for wealth advisors, agents for financial service workstreams, and mobile fraud and threat intelligence), these are all catering to the needs of financial enterprises – bringing forward a combination of domain mastery to deliver control on business-critical operations, workflow automation and regulation-compliant infrastructure. On the other hand, take Rain and NaroIQ: embedded financial infrastructure aimed at creating payroll benefits on one side and ETF operational set-up on the other.

Most companies we invest in are not strictly re-inventing the wheel, but rather tackling a component of financial services or a sub-sector in a highly vertical manner, prioritizing those niche segments of the value chain which horizontal players touch only on the surface. This creates opportunities to land-and-expand once you are already in with the customer – which in our experience has proven faster and more efficient, particularly in the case of enterprise-sized accounts.
Finally, one other (maybe) obvious common thread is the focus on the team, considering how early we invest. We do not look for preexisting achievements as proof points, but a balanced combination of vision magnitude and execution clarity. Looking back, this very consistently translates into us underwriting companies that pair functional automation with the built-in governance understanding that a regulated, high-profile buyer actually requires.

5. Fintech was rebuilt in the 2010s around better UX. The 2020s rebuild looks like it is happening one layer down, at the infrastructure and workflow automation level. What are the two or three shifts you think most people are still underestimating?

Three, if I had to pick.

First, trust over features. The commonly accepted notion that service is unscalable and hence unsexy for VC is still hanging around to a certain degree, but we believe that paradigm is gone. We are seeing attractive opportunities in tech-enabled services across several of our focus sub-verticals: companies delivering automation-aided outcomes, rather than tooling, are in a better position to control the workflow end-to-end, generating the real usage data and nasty exceptions that are needed to feed the training loop.

Secondly, regulation as an advantage. The financial industry is notoriously heavily regulated, which Fintech companies are often dealing with by piggybacking on some other entities' regulatory stance or simply working around it. As the industry evolves, companies that are onboarding the regulatory/compliance intricacies from early on, or even making it one of their key USPs, can better control their operational posture and gain a critical timing advantage over future entrants. We see a rising trend here, but skepticism is still high.

Thirdly, but not less importantly, blockchain technology is still a heavily underestimated piece (at least, by investors that are not specialists nor Fintech-focused). Specifically, it seems quite apparent to us that stablecoins already managed to tip the scale toward larger adoption: money itself is becoming programmable, introducing an entirely new infrastructure representing the logic for when, how, and under what conditions money moves. The protocols are there, and the large money managers are ready. That is: on-chain financial products and agentic money markets could very well be the next big thing.

6. Five years from now, what does a great B2B Fintech company look like that would not have been possible to build today?

There would be lots to say about this, but I want to point to a couple of elements.

Firstly: we expect that the leading B2B Fintech companies will be training their own internal models (the plural is intentional). That is, we expect them to create customized models based on their own captive data, acting as a compounding differentiating factor vs general LLMs or shallow applications built on top of them. Whether these models will be large or small language is yet to be seen as the technology matures, but we expect the stack of the future to include internally brewed and contextualized intelligence, e.g., each product, each business line and – why not – even one model per customer. Maybe not so possible at scale today, based on the current infrastructure, but our portfolio company Overmind is tackling this very problem – and gave us a very compelling picture of why and how this is the future we are walking into.

Secondly: in sync with the above points, B2B Fintech companies of the future will be delivering complete outcomes, and not the tools to produce the outcomes. Most importantly, they will do so by reaching levels of accuracy and reliability so high that the so-called "human in the loop" will not be needed any longer for many tasks, which will rather be performed by AI agents independently. This will be supported by an evolving regulatory landscape, which will allow financial services enterprises to delegate more responsibility to agents, as the vendors will be able to provide higher-level guarantees on output and outcome.