TwentyFold

Think Fintech is all about disruption? It is, but what's often overlooked is the power of niche specialization. Forget the one-size-fits-all approach. The real value lies in Fintechs that are laying the groundwork for a more inclusive, efficient, and transparent financial system. Seek out Fintechs that: > Solve real problems: Not just creating solutions for problems that don't exist. > Foster community: Building loyal user bases through shared experiences and values. > Champion financial inclusion: Expanding access to financial services for underserved populations. > Prioritize interoperability: Building solutions that seamlessly integrate with existing systems and each other. > Leverage data intelligently: Utilizing data not just for personalization, but for creating genuinely valuable insights. Investing in Fintech isn't just about the next big thing. It's about co-creating a financial future where technology empowers individuals and businesses alike. #Fintech #VentureCapital #investing

Overcoming the Challenges of Early-Stage Payments Investing: A VC's Playbook The payments sector is a hotbed of innovation, but early-stage investing comes with unique challenges. As VCs specializing in this space, we need to be strategic, agile, and ready to adapt. Let's tackle some common obstacles: 1. Regulatory Quicksand: Challenge: Regulatory frameworks can shift like sand beneath our feet, especially with emerging technologies like cryptocurrencies and open banking. Solution: Rather than getting bogged down, proactively engage with regulatory bodies, industry associations, and legal experts specializing in payments. Seek out startups that demonstrate a proactive approach to compliance, incorporating it into their DNA. 2. Competitive Cauldron: Challenge: The payments sector is dominated by established players with significant resources and brand recognition. Solution: Look for startups that are carving out niche markets or offering disruptive technologies that address unmet needs. Invest in teams with deep domain expertise and a laser focus on customer experience. Consider partnering with established players to leverage their distribution channels and customer base. 3. Cybersecurity Minefield: Challenge: Fintechs are high-value targets for cybercriminals, making robust security an absolute necessity. Solution: Don't just invest in technology; invest in people. Seek out startups with a security-first culture, where everyone from the CEO to the intern understands the importance of protecting sensitive data. Look for teams that are constantly learning and evolving their security practices. 4. Complex Payments Ecosystem: Challenge: The payments ecosystem is complex, involving multiple stakeholders, including banks, processors, networks, and merchants. Solution: Invest in startups that have a clear understanding of the payments value chain and have established strategic partnerships with key players. Look for teams that are adept at navigating the complexities of integration, security, and compliance. 5. Building Trust and Adoption: Challenge: Early-stage payment startups face the challenge of building trust and gaining adoption from consumers and merchants. Solution: Invest in startups that prioritize user experience, security, and transparency. Look for innovative approaches to customer acquisition and retention, such as referral programs, loyalty rewards, and strategic partnerships with influencers or brands. The early-stage payments landscape is challenging, but it's also ripe with opportunity. By embracing these challenges head-on and implementing strategic solutions, VCs can unlock the potential of this dynamic sector. #venturecapital #fintech #payments #earlystage #startups

Due Diligence in Fintech: 5 Tips for Maximum Impact 1. The Tech Iceberg: A polished product demo doesn't always reflect the underlying technological infrastructure. Technical debt, outdated systems, and scalability issues can cripple a promising fintech venture.  > Solution: Enlist experienced software engineers to conduct a technical audit. Scrutinize the codebase, architecture, and scalability potential. Don't shy away from asking tough questions about future-proofing and growth capacity. 2. Regulatory Quicksand: While regulatory compliance is a given, the devil lies in the details. Fintechs often operate in a patchwork of evolving regulations, and a seemingly minor oversight can have severe consequences. > Solution: Partner with legal experts specializing in fintech to conduct a thorough audit. Look beyond the obvious and anticipate potential regulatory changes that could impact the startup's long-term viability. 3. Team DNA: A brilliant idea is only as good as the team driving it. Evaluate the founders' experience, expertise, and passion.  Founders and investors might not always share the same vision or risk appetite. Hidden liabilities, undisclosed conflicts of interest, or misaligned incentives can lead to costly disputes down the line. > Solution: Conduct thorough background checks on the founders and key team members. Look for a diverse team with complementary skills and a shared vision. Scrutinize the company's financial records and legal agreements. Seek transparency and open communication from the outset. 4. Data Security & Privacy Vulnerabilities: Fintechs handle sensitive financial data, making them prime targets for cyberattacks. A data breach can damage the startup's reputation, incur financial losses, and trigger regulatory investigations. > Solution: Engage cybersecurity experts to assess the startup's data security measures. Ensure robust data protection measures, proactive threat detection, and a well-defined incident response plan. 5. Overdependence on Third Parties: A startup's partnerships can reveal a lot about their credibility and potential for growth. Investigate their collaborations with established players in the industry, as well as their integration with other technologies. Many fintechs rely on third-party platforms for critical services like payments, identity verification, and cloud infrastructure. Disruptions or failures in these partnerships can cripple operations overnight. > Solution: Evaluate the startup's reliance on third-party vendors. Assess their financial stability, reputation, and SLAs. Demand contingency plans and backup solutions. Remember, due diligence is an ongoing process. It's about uncovering hidden risks and making informed decisions. Stay curious, ask tough questions, and don't be afraid to challenge assumptions. Use tools like TwentyFold, to access the most comprehensive and up-to-date fintech intelligence. #fintech #venturecapital #duediligence

Fintech's 2024 Reality Check: 3 Trends That Will Separate Winners from Losers Here's what's actually happening in the industry and why it matters for your investment strategy. Here are three key trends we're watching closely in the second half of the year: 1. Embedded Finance: The Silent Disruptor:  a. It's not just about BNPL anymore. Embedded finance is quietly transforming how businesses operate and interact with customers. Smart money is on companies that are integrating financial services seamlessly into their core offerings, creating new revenue streams and stickier customer relationships.  b. Watch for innovative use cases beyond the usual suspects (e.g., e-commerce checkout) as businesses of all kinds realize the value of offering financial services directly within their existing platforms. 2. AI-Powered Personalization: The New Battleground for Customer Loyalty:  a. Mass-market financial products are becoming a thing of the past. The real differentiator? Personalized experiences. AI-driven insights are enabling companies to deliver tailored financial solutions that truly resonate with customers, fostering long-term loyalty in an increasingly competitive market. b. Expect to see hyper-personalized offerings—from investment advice to loan terms—that cater to each customer's unique financial profile and risk tolerance. 3. Regulation and Compliance: The Unsexy Secret to Success:  a. While it might not be the most exciting topic, regulatory compliance is the unsung hero of fintech success stories. b. Prioritizing strong governance and risk management is what separates the fintech companies that merely survive from those that truly thrive. In an increasingly crowded market, these are the companies that not only avoid costly pitfalls but also build the trust and credibility that are essential for attracting and retaining both customers and investors. #fintech #venturecapital #innovation #financialtechnology #embeddedfinance #AI #personalization #regulation #compliance

At TwentyFold, our data reveals a seismic shift in the financial landscape: Gen Z is demanding more from their financial providers. Traditional banking models are falling short, leaving a gap for innovative fintech solutions that cater to this digital-native generation. Three key areas: > Embedded finance: Seamlessly integrating financial services into everyday experiences. > Micro-investing: Democratizing access to investment opportunities, starting small. > Blockchain-based payments: Leveraging the security and transparency of blockchain for next-gen transactions. These aren't just trends, they're the foundation of a new financial ecosystem designed with Gen Z in mind. #fintech #dataintelligence #GenZ #futureoffinance

Fintech fam, what can we learn from the glitch that shut down the world? 🤯🌍 What happened? ↳ A single software update basically shut down parts of the world yesterday. 🌍✈️🏥  Yeah, it was that kinda day. But here's the thing, fintech fam: this isn't just about airlines scrambling or hospitals going manual. This is a HUGE red flag for our entire financial system. Why? Because it highlights an issue we’re sleepwalking into 1️⃣ Concentration Risk:  A few big players (Microsoft, Crowdstrike) hold way too much power. One error, and BAM! Global chaos. 2️⃣ Digital Dominoes: Our financial system is interconnected AF. One tech hiccup can trigger a chain reaction, freezing transactions, payments, everything. 🚨 The Antifragility Imperative 🚨 This outage is a wake-up call. We can't just build systems that bounce back; we need systems that get STRONGER under pressure. Antifragile, like Nassim Taleb says. 🫡 Here's how we can build a more antifragile financial future: ↳ Decentralization: Less reliance on a few big players. More spreading the risk around. ↳ Redundancy: Backup systems that kick in when the primary one fails. Like a spare tire for your digital wallet. ↳ Stress Testing: Let's push our systems to their limits before they break in the real world. ↳ Learning from Failure: This outage was painful, but it's a goldmine of lessons. Let's use it to build back better. Fintech innovators, this is OUR moment. We have the power to build a financial system that not only survives disruptions but actually thrives because of them. Let's get to work! 🚀 #fintech #antifragile #riskmanagement #IToutage #Money2020 #fintechinnovation #microsoft #crowdstrike

We've witnessed firsthand how partnerships between startups, banks, and regulators can unlock incredible potential in fintech. This echoes Tom Loverro's (IVP) sentiment that 'Collaboration is key in the fintech ecosystem. Startups, incumbents, regulators, and investors all need to work together to create a vibrant and sustainable fintech landscape.' VCs often find themselves at the nexus of this collaboration. Backing innovative startups, fostering relationships with established players, navigating the regulatory environment, and ultimately striving to create value for all stakeholders. Loverro's quote reminds us that the most successful fintech ventures are rarely built in isolation. It's the collective effort, the exchange of ideas, and the willingness to build bridges that truly drives innovation and growth. #fintech #venturecapital #collaboration #innovation #ecosystem 

Brazil: Fintech's Untapped Frontier, Powered by Pix Forget the usual suspects. The real fintech opportunity lies in emerging markets. And Brazil, with its 215 million strong population and groundbreaking Pix payment system,is leading the way. Why Brazil? This isn't just about a growing middle class or increased digital adoption (though those are significant). It's about a rapidly modernizing financial landscape that's leaping over legacy systems and embracing real-time payments. Pix: A Game-Changer for Brazilian Fintech: Launched in 2020 by the Banco Central do Brasil, Pix has dramatically changed payments in the country. This innovative, real-time payment system has become ubiquitous, used by over 75% of the population and 15 million businesses. > Real-time, account-to-account transfers: Simplifying everything from in-store purchases to bill payments. > Low fees, high accessibility: Enabling even small vendors and unbanked individuals to participate in the digital economy. > QR code-based transactions: Seamlessly integrating online and offline payments. > Foreign bank integration (Pix Roaming): Allowing tourists to use their existing bank apps to make Pix payments, instantly converting currencies. The Opportunity for VCs: With Pix as its foundation, Brazil's fintech ecosystem is set for exponential growth. Imagine building the financial rails for an entire economy that's leapfrogging traditional banking models. With over 550 fintech startups already in the ecosystem, the potential is immense. Numbers Don't Lie: > Wealth gap narrowing: While still high, inequality is decreasing, meaning more Brazilians have access to financial services. > Poverty reduction: Down significantly in recent years, expanding the potential customer base. > Retail growth: A healthy 5.9% in Q1 2024 indicates a vibrant consumer market. > Digital payments surging: Cash usage dropping as Pix gains traction. The time to invest is now, before the market becomes saturated. #fintech #emergingmarkets #venturecapital #investment

Global Fintech Funding Shows Resilience Amidst Market Fluctuations Global fintech funding hit $25.6 billion in the first half of 2024, a slight decrease from the $31.1 billion raised in the same period in 2023. (Source: KPMG Pulse of Fintech, H1 2023 & H1 2024) While funding has cooled slightly from the 2023 peak, this demonstrates the sector's resilience and enduring appeal to investors. It's a testament to the fact that fintech isn't just about riding trends; it's about solving real-world financial challenges with innovative solutions. #fintech #venturecapital #funding #innovation #growth

Looking for some great summer reading, or perhaps something to pass the time on a long haul flight? These insightful reads will give you a deeper understanding of the trends, technologies, and strategies shaping the future of finance. Whether you're a seasoned investor or simply curious about this space, these reads offer something for everyone. Here are a few recommendations: > The Innovation Ultimatum: Six Strategic Technologies That Will Reshape Every Business in the 2020s by @Steve Brown (https://lnkd.in/eQ-Gh8AP) Master the 6 most disruptive technologies in business today - Artificial Intelligence, Augmented Reality, Blockchain, Internet of Things, 5G, and Quantum Computing - and learn how to harness their power for maximum impact. > The PayTech Book: The Payment Technology Handbook for Investors, Entrepreneurs and Visionaries by Susanne Chishti Become a payment tech expert and discover the innovations that are changing the way we pay. > FinTech Founders: Inspiring Tales from the Entrepreneurs that are Changing Finance by Agustín Rubini Learn from the real-life experiences and challenges faced by successful fintech entrepreneurs. Go behind the scenes with the visionaries who are transforming finance. Learn from their triumphs and setbacks, gaining practical advice on navigating the complexities of building and scaling fintech ventures. > Digital Banking 3.0: How to Transform Banking for the Digital Age by 💯 Jim Marous Explore the strategies and tactics used by leading banks and fintech companies to thrive in the digital age. Understand the key trends, strategies, tactics and tech that are shaping the future of digital banking, including customer experience, data analytics, and cybersecurity. #FinTech #InvestorMindset #DigitalBanking #PaymentTechnology