Alex Lazarow | Fluent Ventures
Venture Wishlist shares ideas and themes VCs want to fund. Brought to you by Purpose Built venture studio.
Alex is founder and Managing Partner at Fluent Ventures, a global VC fund with a geo-arbitrage strategy that invests in proven business models in new markets. Alex has invested in 7 unicorns globally and is the author of Out-Innovate: How Global Entrepreneurs - from Delhi to Detroit - Are Rewriting the Rules of Silicon Valley (Harvard Business Review Press).
Alex’s Venture Wishlist
🚄 Renting Scale: Small businesses increasingly "rent scale" by leveraging platforms like Ramp or Brex to achieve mid-sized business efficiency with minimal resources. Alex is looking for applications of this model across verticals and regions, in particular: ZenBusiness (business registration and regulatory compliance) and Flychain (complete finance suite for healthcare practices, including accounting, treasury management, revenue cycle management) globally and in non-healthcare verticals.
🏢 Zetwerk for other manufacturing hubs: Zetwerk is an Indian company that coordinates manufacturing at thousands of factories, allowing companies to source multiple products in India through a single interface. Alex is looking for similar companies in other emerging markets – particularly Mexico.
💸 Stablecoins: Stablecoins are showing potential beyond crypto-native companies (Example: Bridge: stablecoin infrastructure for global transactions; recently acquired by Stripe for $1.1B).
👵 Silver Tsunami Opportunities: As baby boomers retire, the majority of US SMBs will lack an owner/operator and be too small for private equity. Business models that provide the capital to transition these businesses and simplify expertise to manage them will be attractive in the US.
📈 AI-Driven Small Business Investment Bank: Inspired by a success in Japan, AI platforms can streamline small business investment banking, enabling bankers to handle transactions efficiently.
🌍 Global Healthcare Opportunities: Fair, transparent, and modern insurance companies that support healthcare access and delivery. Models like Sidecar Health in the US (Alex was an early investor and Board member) are examples of cash based health. Vertical delivery platforms like Maven Health in the US for women's care, or Livongo on Diabetes are powerful models.
Other insights:
🐪 Camels vs. Unicorns: Build "camels," not unicorns, by prioritizing resilience, strong unit economics, and long-term sustainability, rather than blitzscaling at any cost.
📉 Mini J-Curves: Pursue growth through repeated, smaller cycles of profitability and funding rather than a single deep J-curve, to mitigate financing risk.
🌎 Geo Arbitrage: Innovation flows both ways. Proven models in emerging markets, can also be applied in the US.
Full Interview
Tell us about your fund and strategy.
My quick story: I grew up in Canada. My mom is Belgian and grew up in Africa, my dad’s American. I have a big Eastern European family, my godmother’s from China, and my aunt is from Argentina. So, perhaps it was inevitable that I’d run a global VC fund.
Our strategy is around geo-arbitrage. If you look at the number-one tech company in any market around the world—China, India, Africa, Korea, Latin America, Southeast Asia—they’re all pretty similar. They’re often "Amazon for X."
Our focus is on the next two to ten companies in these markets. Our model is to identify proven scaled models that exist elsewhere and partner with entrepreneurs working in those categories in new markets. We aim to bring these often highly impactful, demonstrable approaches to other places. We’ve built a platform to execute that playbook as early as possible.
And you’re on Fund One?
Yes, Fund One. But in many ways, this is year 12 of my journey doing this. I spent five years at Omidyar Network and then five years with Cathay Innovation. In both cases, I was based on the West Coast but worked with a global portfolio.
Given that you have this view of venture globally, is there something that US VCs are missing?
One of the reasons I love the concept of this Wishlist newsletter—and I think it’s brilliant—is that Wishlist is, in some ways, the theme of our fund. Our strategy is to pick a model we like, and that becomes our wishlist to find and test in other places. Our wishlist is public; I literally have it on my website, and we update it every quarter. Around 75-80% of the companies we meet align with that wishlist.
Let me talk about one macro theme we invest in and a couple of specific business models I’m looking for right now.
I think we’re going to see small businesses increasingly able to "rent scale." What I mean by that is, historically, small businesses had to grow into medium-sized businesses to compete and benefit from economies of scale and scope, and medium businesses eventually became large ones depending on the industry.
Today, a small business can rent scale. For example, using something like Ramp or Brex, a small business can access financial controls similar to those of a mid-sized company, but with just one person in finance instead of a full team. In our portfolio, Flychain does something similar in healthcare. We're looking for applications of that model in other verticals and geographies. That’s one item on our wishlist.
Another example is ZenBusiness. ZenBusiness allows small businesses to start, run, and grow by handling everything from business formation to bank account setup. Because they know where you live, what you do, and your business needs, they can offer tailored services. We think this model is highly applicable in other geographies. We’ve backed one vertical-focused company in the U.S. and a couple of similar plays in other markets.
Finally, I’ve been thinking a lot about how small businesses can achieve scale in procurement and distribution. We’ve invested in a few B2B marketplaces and seen models emerge in India that haven’t yet appeared in other emerging markets—or even in the U.S. We’re actively looking for those opportunities.
Years ago, people might have said, "How do you learn what’s happening in the U.S. and carry it to emerging markets?" But you just mentioned something interesting—that there’s something happening in India that’s not happening in the U.S. and might apply here. Can you say more about that?
Yeah, and I’ll start by saying I’ve been lucky enough to back seven unicorns. The biggest company I’ve ever backed is actually an example of this model. The first iteration was in Russia, the second and third were in Europe, the fourth—depending on how you look at it—was in Latin America, and only then did it come to America. This was in the digital banking space.
I think we’re seeing a pattern where global ideas can emerge from anywhere and scale everywhere.
In India, one of the biggest emerging categories has been B2B marketplaces. These marketplaces digitize parts of supply and demand, merge them with vertical software, and provide embedded fintech. This is playing out in manufacturing, construction, FMCG, industrial inputs, and other verticals.
Let me talk about one company—we just announced their round this week. One of the big shifts that happened recently is the move from supply chains centered in China to a "China +1" strategy. India has been a significant beneficiary of this shift. A company called Zetwerk has created a platform for manufacturing in India, connecting thousands of plants. They look like the biggest manufacturer, but behind the scenes, they handle complex sourcing, delivery, quality control, and more.
We believe this model should work well in many other geographies. Right now, perhaps the most exciting market for nearshoring and friendshoring is Mexico. We’ve met most of the companies there doing this and backed a company called Prima. That’s an example of the globalization and cross-pollination of innovation we’re seeing across different markets.
Are there any “why now” trends you’re seeing that unlock opportunities? AI is an obvious one, but are there other areas where new capabilities—whether from consumer shifts, new markets, technology advances, or regulatory changes—are driving things you’re looking at?
Let me talk about two trends. One is a bit "hot" right now that I didn’t think I’d be excited about but am spending a lot of time on. The other is a big demographic shift.
The first is stablecoins. I’ve been an early investor in crypto personally since 2013—I bought my first Bitcoin then—but I’ve never invested other people’s money into crypto or adjacent business models. I haven’t had conviction around an actual business model solving real problems, particularly within our geo-arbitrage model. I’ve also avoided cross-border foreign exchange or remittance models because I didn’t think they were disruptive enough. By the way, I’ve been wrong about some of those.
Now, I’m actually pretty excited about stablecoins and what’s happening there. We’re starting to see proven models and early exits, like Bridge a few weeks ago. If crypto trading volumes keep increasing and interest in stablecoins grows—not just from crypto-native companies but from others as well—I think this space could become really interesting.
The second trend I’m focused on is the "Silver Tsunami"—the wave of baby boomers retiring, maybe getting sick, passing down their businesses, and so on. I’ve been really interested in what happens to the businesses they own, especially in cases where the kids don’t want to take over, there isn’t a trained workforce, or the businesses are too small for private equity. That applies to about 80% of small businesses, like my mom’s medical practice with just one employee.
There are exciting new plays emerging around this transition. We’re spending a lot of time on the business side of it, but more broadly, the Silver Tsunami as a whole is a fascinating trend to watch.
How are people solving this in other countries?
One of the models we’ve seen, with a lens on global becoming cross-border, is in Japan. One of the fastest-growing unicorns there is an AI-driven small business investment bank. It simplifies onboarding by understanding what the business does and automating many banker workflows. This allows a banker to handle 20 or 30 transactions at a time instead of just two or three. It also matches buyers and sellers and helps pitch deals appropriately.
That model has scaled terrifically in Japan, and we think it could work similarly here. We’re actively looking for interesting companies executing this playbook. This model could also work well in Europe, Korea, or other markets. We believe it has a lot of potential globally.
Have you spent more time on cash-based health?
I was an early investor in Sidecar Health, which is in that space. I’m obsessed with three trends in healthcare and continue to focus on them. Geo-arbitrage in healthcare is a bit trickier—you have to squint to find global models directly applicable to the U.S., and it’s challenging in the other direction too.
The first trend is greater transparency in pricing. Anything that promotes that is very interesting, including marketplaces and foreign travel plays.
The second is giving more agency to customers, allowing them to choose and define value. That’s a fascinating area, and we’re seeing some exciting developments.
The third is vertical delivery in healthcare, like what Maven Health does for women or what Livongo did for diabetes. Depending on the market and reimbursement models, some of these approaches might work in other places. We’re going into this space with an open mind.
When you think about the themes you’ve shared, are there any specific customer segments or profiles you’d direct founders toward, or is that not really how you think about it?
That’s less how we think about it. I’ve mentioned three broad customer segments: one is around the Silver Tsunami and boomers, another is small businesses, which we consistently focus on, and the third is consumer. Those are broad categories, but what I really like is when there’s a dislocation event—a reason for change from one thing to another. That’s where we tend to spend time, rather than focusing on a specific demographic need.
You’ve also written a book. Can you share a little about it?
I’d be happy to. I wrote a book called Out Innovate: How Global Entrepreneurs from Delhi to Detroit Are Rewriting the Rules of Silicon Valley. It was published by Harvard Business Review Press and has been translated into Chinese, Korean, and Spanish, with more languages coming next year.
I wrote it out of frustration. When I started the book, and even today, the conversation about building startups outside Silicon Valley was dominated by a single place and approach—Silicon Valley itself. But when you look at top entrepreneurs worldwide, their stories often run counter to the conventional wisdom here.
I interviewed about 100 unicorn founders and exited founders globally to uncover what worked for them. The result is a playbook for building startups around the world, which aligns with the driving force behind my fund and my broader work.
And how does that tie in with your Substack?
The Substack is a continuation of that conversation. I run a newsletter called 99Tech, which serves three purposes. First, it features the stories of founders that others might not have heard of, highlighting not just what they do but how they do it and the lessons we can learn. Second, it shares some of our firm’s learnings about what we’re seeing around the world. Third, it occasionally includes guest posts from other VCs and market leaders to share their perspectives and foster collaboration.
Is there anything from the book you’d like to highlight, like a concept or mental model, aside from cross-border themes? Are you looking for "camels" or something else?
When I wrote the book, which came out in 2020 during COVID, the prevailing best practice for startups was blitzscaling and pursuing growth at any cost. At the time, I was advocating for a different approach: building while managing burn, with strong unit economics and a long-term outlook. I described this as building camels.
Camels are resilient, efficient, and can endure tough conditions while still thriving. You can still aim to become a unicorn—a billion-dollar camel—but it’s about how you build to get there. This philosophy has become more widely accepted today—it’s a more centrist, reasonable approach.
As a VC, I’m looking for companies that can grow fast but do so in a responsible, controlled way. This focus on capital efficiency influences how we select business models. We partner with founders who share this philosophy, aiming for repeated success. If you retell the story of a startup a hundred times, this approach increases the odds of successful outcomes for the founders, investors, and customers.
What is the magnitude of the trade-off, or how do you quantify the balance between extreme growth and unit economics—or what you call responsible growth? How do you know if you’re growing enough, or if you’re sacrificing too much upside by being "responsible"?
I don’t think it’s black or white—it’s more of a spectrum. For instance, Chris Yeh, who co-authored Blitzscaling with Reid Hoffman, is a friend and blurbed my book. When we discussed this topic, I’d probably agree with Chris in saying there are models, like consumer marketplaces, that are winner-take-all. In those cases, if your competitor has raised a lot of money, blitzscaling makes sense.
On the other hand, there are models that clearly don’t benefit from that approach. My perspective is that most businesses fall somewhere in the middle—they’re not true winner-take-all. That’s where the philosophy of responsible growth fits in.
My bias is that most companies should aim to have a sustainable unit economic model from the beginning. Understand your metrics, like LTV, and then make a decision: do you raise venture capital, and how much growth are you targeting? This is where the trade-off lies—how deep you want your J-curve to be.
What I’ve observed, especially outside Silicon Valley, is that instead of one deep J-curve, many founders create "mini J-curves." They grow a bit, return to near-profitability, then raise more for a specific purpose or timeframe, repeating this cycle. These more modulated dips are something I’ve seen in companies that have scaled significantly outside of Silicon Valley.
For founders reading this, who should be in touch with you? Is it people based outside the U.S. building businesses aligned with one of these themes? Is that the way to think about it?
Yeah, I’d say so. About a third of our portfolio is in America, and two-thirds is global. We only invest in a handful of proven scale business models at Seed, Seed Extension, or Series A. If you’re building something de-risked somewhere else on the planet and raising at those stages, come talk to us—that’s potentially in scope for us.
This interview has been edited for length and clarity.