Moonfire, a European seed-stage venture capital firm, uses Bound to:

• Achieve predictability in FX exposures across multiple currencies (USD, EUR, GBP) for confident planning of management fees and expenses.

• Captured a ~10% improvement in the GBP/USD rate, boosted operational cash flows, and beat their operational budget.

Who is Moonfire?

Moonfire is a European venture capital firm that invests in pre-seed and seed companies (including Bound!). Moonfire builds its own proprietary technology - LLMs, ML-powered sourcing and evaluation - and internal tools to transform the scale and accuracy of venture.

Like many VC firms dealing with investments in multiple currencies (e.g. USD, EUR, GBP), Moonfire grapples with complex currency optimisation challenges. But as Bound investors, they've now got their FX hedging down to an art – staying sharp, secure, and ready for anything.

• Website: moonfire.com

• Employees: 12

• Industry: Venture Capital

Meet Nic

Nic Lowden, Head of Finance at Moonfire, oversees the firm’s international finances, including managing USD-denominated management fees, while handling expenses in EUR and GBP, making effective FX management crucial to the firm’s success.

Currency challenges

Moonfire Ventures, a tech-driven seed-stage VC firm, and investor in Bound, manages a USD-denominated fund while incurring operational expenses in GBP and EUR. This currency mismatch can lead to frequent and unpredictable conversions, which can complicate budgeting and reduce visibility and confidence in financial planning.

Like many firms, Moonfire needed to enhance their FX strategy to stabilise cash flows, mitigate risk, and optimise control/predictability for their finances.

Nic Lowden, Head of Finance, Moonfire Ventures, summarises the situation: “It’s critical for us to manage this exposure effectively – to optimise conversions, protect against adverse currency fluctuations, and plan for various scenarios – without the FX unpredictability that complicates financial planning and reporting.”

Enter Bound

Moonfire implemented Bound to take control of their currency management using the ranging strategy. This helps set limits on potential downside while allowing them to capture upside opportunities if the market moves in their favour.

How Ranging works

Ranging is essentially a combination of two types of orders: a limit order and a stop order.

• A stop order locks in your worst acceptable rate by triggering an exchange if the market moves against you.

• A limit order locks in your desired rate by setting a price to exchange if the market moves in your favour.

You can adjust your limits and stops at any time, instantly.

“Now, I know exactly what the worst-case scenario is for our budget, but if the market moves in our favour, I can capture the upside. It’s been transformative for our planning,” he explains.

Real impact: Moonfire captured a ~10% improvement in the GBP/USD rate, boosted operational cash flows, and beat their operational budget.

Moonfire’s use of ranging

In September 2024, the GBP/USD rate was ~1.332. At that time Moonfire could have exchanged $1 of their management fees for £0.75 to cover UK operations.

Instead of converting everything at once at the spot rate, they used the ranging strategy to ensure the rate couldn’t move too far against them – while still giving them flexibility to take advantage if the rate improved.

Over H2 2024, as USD strengthened, Moonfire toggled their range parameters each time USD moved in a positive direction. They tracked market improvements while maintaining protection from an adverse rate change.

Wider benefits

• Stabilised budgets ensured Moonfire could confidently allocate resources for salaries and office expenses.

• The ability to capture market upside while maintaining a clear view of worst-case scenarios.

• Time and cost savings that allowed the team to focus on scaling their portfolio.

Nic sums it up: “For a firm like ours, managing investments across multiple currencies, Bound is invaluable. It’s simple, flexible, frees up time to focus on what matters, and, most importantly, it gives us the predictability and control we need to keep growing.”

He adds: “As a small team with plenty on our plates, Bound’s simplicity and comprehensive features have been invaluable, seamlessly integrating into our workflow without adding any pressure.”

Watch the full interview