![]() However, as with many technologies, the initial use-cases tend to be derivative and feature-heavy: products that exist because they can instead of because they are needed. Think of it as the fintech equivalent of the emergence of cloud computing: it dramatically reduces startup costs at the earliest phases. This is dramatically shrinking the go-to-market period for highly specialized consumer banking apps. We think a version of that is happening right now in fintech, and it’s driven by the increasing reliability and number of fintech API providers.ĭata providers like Plaid/Quovo and bank service providers like Synapse and Cambr/Q2 are making it easier than ever for developers to integrate their offerings with legacy banks. However, the Cambrian period - way before the dinos started their slow transformation into cheap plastic toys - was marked by an explosion of new life and ecological diversity. A Cambrian Explosion?… But didn’t all the dinosaurs die? Arguably this trend started with Tally, which works to help consumers optimize credit card spend and debt, but it’s now firmly taking root in real estate and education with potential long-term impacts on each of those industries. Historically, most consumers interacted with credit (their loans) via a servicer that existed principally to collect payments on behalf of the creditor. Finally, we’re seeing a really exciting trend starting to surface in Real Estate and Education driven by disaggregation of credit management from the underlying credit asset (the consumer’s debt). We’re also seeing a lot of credit-oriented businesses that are either being built at exactly the wrong time, or we’re exactly wrong. (h/t to Ethan Bloch of Digit for that one.)ĭebt. The first trend is this “Cambrian Explosion” of new design innovations on the transaction account - especially with respect to consumer transaction accounts - created by the existence of relatively easy to implement APIs. Ok, bad acronym: Transaction Accounts, Debt and Management. ![]() So what did we see? TADAM! What is TADAM? But, after the internal arguments, trends start to emerge. Trying to draw trends from this mix is always a bit like reading tea leaves - after all, sometimes it’s not even clear what a startup actually does. Through this process, we’re able to see a broader geographic mix of startups from across the country, with less Bay Area concentration among founders and more exposure to broader market dynamics, founder sentiment and financing trends. It provides an insightful look at what’s happening in the market - and the process reveals emerging trends that are driving innovation It’s a great way to find companies we might otherwise overlook or never see if we were to rely solely on our existing networks, and ![]() This application process can be a lot of work, but we like it for two big reasons: Earlier this year, our firm, the Financial Venture Studio - which invests primarily in early stage fintech startups - completed its first call for startups, and received an overwhelming number of applicants. Fintech continues to generate an astonishing number of new companies. ![]()
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