Around the world, while similar tech advances quickly, opportunities and impact vary across markets
by Andrew Wegrzyn & Samarth Shekhar
FinTech’s biggest show brought together a total of 11,500 attendees across the US and Europe this fall, in a successful live re-boot of Money 20/20 in Amsterdam and Las Vegas. As the first large-scale live events for many this year, our investment team was excited (if still a little apprehensive about COVID) to attend both.
Money 20/20 is uniquely positioned to highlight both a global view of the rapidly changing fintech ecosystem, and at the same time illuminate regional differences between the US and Europe.
For a firm like SixThirty, global attendance allows us to refine our views of the market, observe trends across geographies, and develop our global views to inform our investment and decision-making processes.
For Samarth Shekhar, SixThirty’s EMEA Regional Manager, getting back to business as (nearly) usual was surreal, at least for the first few hours of Money 20/20 Europe. The health and safety measures put in place made catching up with old friends a safe and enjoyable experience. SixThirty Principal Andrew Wegrzyn agreed Money 20/20 US offered a fantastic environment for conducting business. For both Andrew and Samarth, it validated our views that the fintech game has progressed significantly over the past two years.
The spirit of partnership and competition in a rapidly unbundling and re-bundling landscape of B2C, B2B, B2B2C, B2B2B and even B2B2B2C players was evident across both events. In the past, fintechs were generally targeting major incumbents as customers. This year, it seems startup fintechs are selling more and more to other fintechs, either mid-maturity or late-maturity firms — forming a B2B2B2C type approach. The long-sales cycle challenge with large incumbents now also applies to larger fintechs who have grown into the new gatekeepers of how startups ultimately reach consumers.
In Europe, hyper-personalization of customer journeys and invisible payments — trends that we have written about and invested in continue to grow and get attention.
Samarth also noted that whichever way he looked, there was a lot of action on-top-of or adjacent-to the (online or offline) point of sale. He observed that banking-as-a-service and open banking propositions have matured beyond account connectivity to higher-value propositions, and BNPL variants and business models are mutating to address incumbents and other stakeholders.
Across the pond in the US, De-Fi, crypto and the overall “trustless” future of finance continues to grab market share in terms of real estate on the exhibit floor and in discussions and presentations.
At the same time, Andrew observed that questions remain about ongoing regulatory environments, barriers to wider crypto adoption, and the ability of legacy institutions to evolve systems to encourage greater uptake of these technologies. Additionally, while financial services has been an ideal domain for bringing DeFi solutions to life in a way that generate customer value, the ability of these technologies and methods to percolate to an even broader group of use cases in FinTech remains to be seen. Will the use cases for DeFi go wider or deeper across the industry? The answer is likely both, but the timing of those use case expansions remains in flux. The sentiment here was that it seems widely accepted that the pandemic accelerated these trends over the last 18 months. The major takeaway — DeFi is here to stay.
A global view of key takeaways and themes is essential for many reasons. Though the events drew many similarities, the fact remains that these are two different regions with varying guidelines and regulations. The way data, privacy and sharing echo through different markets and ecosystems — guiding product decision, collaboration, sales — basically every element of the fintech ecosystem — all differ across major markets.
The multi-market view provides opportunities to learn from and invest in the regions that are giving birth to the best ideas. In Europe, GDPR and open banking are enabling companies to provide new services on existing banking data, such as credit risk insights and imbedded insurance. In the US, DeFi is beginning to hit its stride, and with the crackdowns on certain DeFi activities in other parts of the world, the US is poised to continue to lead in this space.
Across both the US and Europe, the proposition that “every company is a fintech company” continues to mature and operationalize before our eyes. With the centrality of banking-as-a-service and embedded finance across both the US & Europe, the opportunity for fintech is as great as it has ever been.
In 2021, $1 of every $5 went to fintech companies, and this explosion and growth is poised to continue. SixThirty knows that fintech is global — that bold ideas know no boundaries — and our global partnership with Money 20/20 brings a unique view into the global ecosystem of startups and incumbents, helping us to identify, evaluate, and invest in the best ideas from across the globe.
