Welcome to the January installment of Fin Capital's Monthly Wave. It’s been a busy month for the team and our portfolio companies.

• The Incoming Waves of Quantum: Quantum computing is rapidly evolving from a distant theoretical challenge into a tangible, real-world risk. As quantum capabilities advance, they are beginning to pose concrete threats to today’s systems; particularly encryption, data security, and digital infrastructure built around the limitations of classical computing. What was once an abstract concern is increasingly becoming a practical issue that organizations must address now. Against this backdrop, we recently announced our investment in Project Eleven, which sits at the intersection of digital assets and quantum computing. At its core, the digital asset ecosystem is defined by cryptography. As quantum technologies mature, they introduce both powerful new capabilities and fundamental challenges for existing cryptographic systems, making the convergence of quantum computing and digital assets a critical frontier for the future of secure, decentralized value. We are excited to back the Project Eleven team and believe this represents one of the earliest and most practical use cases for quantum-resistant protection. 

• New AI Currents Demand Stronger Guardrails: Time and again, we hear from our bank partners that as AI applications proliferate across the enterprise, existing security architectures are no longer sufficient. Financial institutions are facing a new class of risk at the network level - driven by employees, agents, and applications interacting with increasingly powerful models in real time. Enterprises need the ability to monitor and analyze AI usage across employees, models, applications, and autonomous agents; define and enforce customizable policies and guardrails; and deploy continuous, always-on protection against an evolving landscape of AI-native threats. This is rapidly becoming a board-level concern as regulatory scrutiny and operational risk increase. That’s why we invested in WitnessAI, which helps enterprises govern and secure generative AI by enforcing guardrails, monitoring usage, and controlling sensitive data flows across employees, models, and AI agents. Our portfolio also includes Articul8, an enterprise platform for building and deploying generative AI applications at scale, and Liminal, which enables regulated organizations to securely run and manage multi-model GenAI across the enterprise. At the same time, organizations are looking to proactively harden the models that power these workflows. Automated red teaming enables enterprises to simulate sophisticated, real-world attacks, uncover vulnerabilities before they’re exploited, and strengthen model defenses against AI-native threats. If you are building at the intersection of security, compliance, and AI – we want to know you! 

• Navigating Dangerous Waters: Our Concerns with OpenAI and Proprietary LLMs: We’re increasingly cautious on the long-term durability of proprietary LLM moats—not because these models aren’t impressive, but because differentiation is compressing across performance, distribution, and economics. First, the performance gap versus leading open-source models continues to narrow, giving enterprises credible “good enough” alternatives with more control and lower costs. Second, Google’s rapid momentum with Gemini underscores the power of distribution: by embedding AI directly into core workflows like Search and Workspace (and increasingly across AI-powered applications), Google can drive adoption through default placement in products with massive daily usage. Third, we’re seeing proprietary platforms struggle to convert broad free usage into durable paid monetization (particularly from the enterprise), as inference costs remain real and user willingness to pay is uneven—creating margin pressure even as usage scales. Finally, high private market valuations relative to fundamentals are increasingly hard to underwrite in a world where model capabilities may commoditize faster than expected and distribution advantages accrue to incumbents—making the margin for error thinner as competition intensifies.  

• AI Powering Fin and our Portfolio: A question we’re often asked is how our portfolio companies are using AI—and how that, in turn, is shaping the way we evaluate new investments. Our answer is simple: artificial intelligence is fundamentally reshaping how startups grow and scale by helping teams do more with less. In practice, startups are increasingly leveraging AI-powered tools to streamline core functions—from accelerating code development, to automating customer outreach and content creation, to optimizing go-to-market execution and internal operations—freeing teams to focus on higher-impact decision-making, creativity, and innovation. At Fin, we’re applying the same mindset internally through our Lighthouse portal—using AI to help us source and diligence investments more efficiently, surface patterns across markets and companies, and pressure-test key underwriting assumptions faster. We’re also weaving agentic workflows into our investment process to automate repeatable tasks, accelerate research, and help our team spend more time on the judgment-heavy work that matters most. Please let us know what additional AI tools we should include in our marketplace so that we can source best-in-class discounts to help founders grow their business.

How I Invest with Logan Allin

Tune into David Weisburd’s latest episode to hear why size can become the enemy of venture returns with Fin’s Founder & Managing Partner, Logan Allin

Join Us at Fintech Meetup

• We’re headed to Las Vegas in March! Join us, alongside TTV Capital & PayPal Ventures, for cocktails & light bites on Tuesday, the 31st. Reach out to [email protected] to request your spot!

Portfolio News

It’s been a busy month, sharing some of the latest moments from across portfolio…

• Articul8 secures the first tranche of a  $70M funding round led by Adara Ventures.  

• DailyPay announces the closing of a new, $195M senior secured revolving credit facility.  

• Entrio announces integration with ServiceNow to automatically enrich records and data. 

• OatFi partners with Highnote to expand integrated funding capabilities for charge card programs. 

• Ternary releases the next evolution of its platform with the introduction of Bring Your Own Data (BYOD), which will extend its ingestion pipeline beyond native cloud billing.  

• VRGL partners with Focus Financial to help standardize and scale the prospect and client engagement process.  

• WitnessAI named in 10 AI Startup Companies to Watch in 2026 by CRN. 

What We’re Reading

INDUSTRY RESEARCH 

• Circle: Beyond Stablecoins, The Rise of the Internet Financial System Report (Read More) 

BLOGS, PODCASTS AND VIDEOS 

• OneVest: Why Lifecycle Thinking Will Define Wealth Management Technology for RIAs in 2026 (Read More) 

• OpenAI: Netomi’s Lessons for Scaling Agentic Systems into the Enterprise (Read More) 

• Fintech Corner: Saving a Half Day with Trovata TMS: A Chat with OneMain Financial’s Steven DeLutri (Listen Here) 

• Conduit: Unifying Fiat and Stablecoins Under One Platform (Read More) 

• American Banker: A Fragmented Landscape or Bespoke Stablecoins Will Serve Nobody (Read More) 

• Looking for Leverage: The Characteristics of a GREAT Sales Comp Plan (Read More) 

• Growth Unhinged: What’s Working in SaaS Pricing Right Now (Read More)  

Spotlight on Hiring

• The Fin Capital team is growing and we would welcome any referrals (Fin Capital Jobs) – in particular we are seeking new team members in three categories across our offices: a) Cyber investing; b) Investment Analysts; and c) IR/Capital Formation. 

• Our companies are hiring! There are hundreds of jobs on our jobs board (Fin Family Jobs).  

Thanks for reading!

We are grateful for your partnership and support, and welcome any feedback you have. We’ll see you next month with more!

-The Fin Capital team

_Disclaimer

_{This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Fin Venture Capital Management LLC (“Fin”) or its affiliates. Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Fin has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.}