Future Nexus

With nearly a half-century in operation, and the experience only successful founders can bring, Matrix has a history of backing winners. The seven-person VC firm, which has raised $800 million through 12 rounds, bet early on Apple, FedEx and Canva. Matrix focuses on early-stage, preseed to Series A companies. Partner Matt Brown said they’re also picky.

Hi there and welcome to Funded, where we spotlight the early-stage bets on the future of tech. This week’s issue looks at a category most fintech founders avoid: what happens after the wealth is built. Houston-based Paige has raised a $2.5 million round led by 22nd State Banking Company to help families organize their financial lives before a crisis forces the issue.

Parafin co-founder Sahill Poddar said it took one visit to an auto body shop to know he and co-founders Vineet Goel and Ralph Furman were on the right track with their vision for an embedded financial infrastructure company, one that addresses a $2 trillion opportunity. When Parafin was in its infancy, Poddar walked into an auto body shop and asked the owner if he had ever considered adding a second lift.

Hi there and welcome to Funded, where we spotlight the early-stage bets on the future of tech. This week, we’re looking at a startup taking aim at one of the most complex corners of enterprise infrastructure: tax. Fonoa has raised fresh capital to build an AI-powered system that unifies compliance, invoicing, and tax operations under a single platform. Fonoa has raised a $110 million Series C led by Headline to build what it calls the Tax Operating System for autonomous tax.

The top 100 private fintech companies in the world are now worth $1.9 trillion, nearly three times the combined market cap of the 100 largest public fintechs founded in the last twenty years. They generate about 10% more revenue, too. That’s the headline finding from a new report jointly produced by Blue Dot Investors and FT Partners, and it should make every fintech founder, investor, and board member rethink what “winning” looks like.

Should we buy or build? It’s a question the technology industry has been stuck on for decades. Some argue that building in-house is better because it gives you ultimate control. Others insist it’s better to buy the infrastructure and focus on your core product. Six years ago, Shensi Ding left her job as Chief of Staff at Expanse to permanently side with the “buy” camp. The problem she was trying to solve: integrations for enterprise systems. Today, integrations seem like table stakes.

Stephanie Sher is not interested in winning venture capital by playing the usual game. As founder and general partner of Integral Ventures, she is building a firm around a very specific, and increasingly rare, discipline: backing deeply technical founders. The remit is not research projects dressed up as companies, but true production-grade businesses.

When Anthropic announced its AI model Mythos, the company was clear in saying that the model is too powerful for the world—and it’s only going to be available to select partners so that they can secure the systems that form the basis of the modern internet. Much like Mythos, OpenAI is building an advanced AI system that we may soon see in testing. And right after that, Chinese players will likely be on the same road, maybe even open-sourcing the technology to make it available more widely.

For the past three months, the financial press has been writing about private credit as though the apocalypse is imminent. Redemption gates, illiquid assets, SaaS exposure, shadow banking lurking just outside the regulatory perimeter. If you’ve been following the coverage, you might think the entire $1.7 trillion industry is on the verge of collapse. It isn’t. But that doesn’t mean nothing is happening, and getting those two things straight is the whole point of this article.

Website outages are painful, but in the age of AI-generated code they’re turning existential. Last year, companies, including Amazon Web Services, Azure, Cloudflare and Google Cloud all announced major outages, some lasting over 15 hours. As Traversal co-founder and CEO Anish Agarwal puts it, the oft-quoted “$2 million an hour” figure during a downtime is now just a starting point, unfortunately, for large enterprises. “The problem only gets bigger, the larger the company gets,” he said.