Meet Mitigram, the female-founded fintech backed by a female-led VC
A lack of disruption in the corporate banking space is making it harder for innovative companies to make waves, and venture capital reluctance isn’t doing much to help speed things along.
“When we started, banks were reluctant, no doubt – corporate banking hasn’t experienced anywhere near the level of disruption as consumer banking,” Milena Torciano, CEO of Stockholm-based fintech Mitigram, tells FinTech Futures.
Torciano, originally from Southern Italy, joined the helm of Mitigram in 2017, three years after female entrepreneur Marjon Wohlén founded the start-up.
Mitigram is a global trade finance platform designed for exporters, traders and banks. It brings transparency to an otherwise opaque industry, and claims to deliver efficiencies for all parties.
Since Torciano joined, she has built the fintech from a team of five to a team of around 40. She has also led two funding rounds over the last 24 months, totaling to $15 million. The last was led by Sampo Group, one of the most valuable listed companies on the Helsinki stock exchange.
When she joined, Mitigram’s customer base was made up largely of Nordic corporations. Its client list now stretches across Germany, Italy, France, Singapore, Korea, Australia, and Africa.
Building a network with no members
“We had a hard time convincing other Nordic VCs to jump onboard at the start,” Kerstin Cooley, founding partner at early Mitigram investor Moor, tells FinTech Futures.
Other investors, as well as Sampo Group, include Rovio Entertainment founder Kaj Hed – via Moor, and Swedish investors Johan Andersson and Fort Knox.
Cooley had known Wohlén for years. Her fund backed Mitigram from the very beginning.
Back in 2014, trade finance communication was still predominantly run on email and phone calls, with “no central digitised exchange or shared portal”, says Torciano.
“It’s not an easy market to break through – you need to bring all the banks to one place with a high level of security,” she adds.
Cooley agrees. “It was a bold and risky proposition. There had been very little digitalisation in this space at the time.”
So, building a marketplace from scratch took time. But in the last two years, Torciano says the banks “come to us directly”.
To date Mitigram has facilitated over $50 billion in trade finance transactions. Its platform encompasses a network of more than 200 global exporters, commodity traders and banks.
From the South of Italy to London to the Nordics
Torciano left a small town in the south Italy at 16 to study in France without speaking a word of French or English. She went on to complete a bilingual diploma in France, which led her to the London School of Economics.
“What’s important to me is that women who somehow succeed are not described as career seekers only,” says Torciano, specifically rejecting the phrase ‘climbing the ladder’, commonly attributed to aspiring women.
“We’re passionate individuals who go for the things we want and put all our efforts into it.”
Torciano’s first job was at Oliver Wyman, before joining London-based AnaCap Financial Partners, a private equity firm, where she worked for nearly eight years.
“The personal cost in London was much greater,” she says, referring to her experience as a woman, and eventually a mother, working in private equity.
“I think the Nordics is one of the best places to do this, frankly, as a woman. There’s much more support and you benefit from more equal sharing as a mother of young children.”
Companies do their bit too. In Norway, private equity firm FSN Capital made it mandatory for all fathers to take at least two months’ parental leave, or risk losing their bonus.
“There are a lot more women in powerful positions, so you feel much more like a peer,” Torciano adds.
Women now represent 46% of Sweden’s parliament and 50% of the government’s cabinet, according to the Inter-Parliamentary Union.
“It’s not as exceptional being a female executive in the Nordics as it is to be high up in private equity in London,” says the Mitigram CEO.
“Plus, investors [in the Nordics] are much more open to female founders. That’s not to say it’s easy, there is bias still here and fewer women succeeding.”
The Nordic paradox
But whilst the Nordics is often treated as the example, the wage gap between men and women still exists.
According to the BBC, Sweden’s gap is 12.3%. The EU average is 16%.
Cooley also highlights that “Sweden scores poorly” on female CEOs of public companies. “I have no idea why. It’s just interesting to note the paradox.”
In 2016, only 6% of chief executive positions in publicly listed companies were held by women, as per a report by the Swedish Institute.
The Nordic Gender Effect at Work, a report the Nordic Council of Ministers, found “a troubling pattern” in businesses. It was that “the higher up the hierarchy you look, the more men you will see”.
University of Essex professor, Gijsbert Stoet, thinks it’s down the fact Nordic countries have a generally high standard of living and strong welfare states.
As a result, he thinks young women pick careers based on their own interests, such as caregiving or languages, rather than STEM-based roles.
One of the first female-founded VCs in Europe
Cooley founded Moor with her partner, Katja Bergman, in 2012. She then founded another fund, Brightly Ventures, in 2018.
“For VC funds to be founded and led by women is very rare,” says Torciano.
Cooley left investment banking the year she founded her VC fund. Her and her partner felt there was a gap for seed funding.
“The ratio of entrepreneurs to seed funds was unproportionate. At the time, we didn’t realise we were one of the first female-founded VCs in Europe.”
In 2015, the fund had invested in just 17% female founders. The country’s average was around 4% at the time. The fund grew this number to 25%, where it has not dipped below since.
“Half of our female founders make up the four best performing companies in our portfolio,” says Cooley.
Asked why she thinks there are still fewer female founders, particularly of VC funds, than men, Cooley thinks it’s down to how we judge genders.
“People evaluate female founders through a different lens to men. Youth means ‘promising’ for men, but for women it means ‘inexperienced’.
“Men are praised for being arrogant, but for women, that’s seen as an ‘emotional shortcoming’.”
“I don’t view it as women bring something else to the table. But I do feel that teams with diversity – and that’s not only male and female, that’s people from different cultures too – are way stronger than teams.”
Future for Mitigram
In March 2019, Mitigram hired its first chief financial officer, Therese Schillén, adding another woman to its executive ranks.
During the thick of the coronavirus pandemic – between March and April – the start-up experienced a sharp drop in transactions. Though the fintech says it “recovered quite strongly”.
“After the initial shock, volumes were back up to where they were,” says Torciano. “The number of requests has actually gone up, even though transaction values are lower, and commodities have undergone significant stress.”
COVID-19 has taught Mitigram that digital marketing and communication channels are key going forward. “Persuading large institutions isn’t as straight forward as selling a consumer product.”
In the next 12 months, Mitigram plans to double in size. Torciano says she will also lead a larger Series B round in early 2022, using the funds to develop more products.
By the end of this year, the start-up expects to have a first capability which aggregates multiple instruction delivery channels to make transaction execution more seamless. “It’s a huge headache, so that’s one of our next focuses,” says the CEO.