In this interview, I speak with Fabrice Grinda, a founder of FJ Labs. With over a thousand unique investments made across different life cycles of FJ funds, Fabrice shares his Marketplace-centric approach to investing, and the importance of investing in extraordinary people who are trying to solve the world's problems. Fabrice also talks about his accidental transition from being a tech founder and CEO to becoming a VC and why he chooses to invest in network effect businesses and marketplaces. Throughout the interview, Fabrice discuss various topics related to investing in marketplaces, including investing in marketplaces all over the spectrum from B2C to B2B, both product and service-oriented platforms. This interview is packed with valuable insights for anyone interested in the world of marketplaces and VC investing!

Fabrice talks about how he believes B2B marketplaces are at the very beginning of their journey both in the US and globally. Fabrice highlights that the penetration of digital is very low in B2B and about how the entire supply chain needs to be digitized, including ERP integration, payments tracking, and how suppliers are involved. Grinda suggests that in some cases, the elasticity of supply and/or demand is such that a platform cannot have a take rate.

Fabrice suggests that there are many tricks to making B2B marketplaces work, such as offering a free tool to the supply side or demand side to help them manage their business better. Also highlighted, that monetization of B2B marketplaces may not come from the transaction of the marketplace component. Instead, B2B marketplaces may monetize through SaaS or by offering ancillary services for insurance, factoring, or logistics. Fabrice gives an example of a hairdresser and barber shop marketplace that grew to a volume of billions of annual GMV and monetized by getting an extraordinary deal on payments and sharing part of that discount with the barber shops.

#venturecapital #marketplaces #investorinsights

—