Fluent Ventures

In recent days, the #FinTech sector has seen significant capital raises - a strong signal of a potential resurgence in 2024. Following a challenging 2023, marked by a downturn in FinTech investing, the industry stands at a pivotal crossroads. But what does this mean for the future? ?? Vikas Raj and I had a fun time on the last few episodes of The Pnyx with Tamer Azer (Shorooq Partners), Victoria Cheng (Pruven Capital), and ganesh rengaswamy (Quona Capital). Here are five crucial takeaways for 2024: 1. The Macro Environment: Despite 2023’s challenges, the panel remain optimistic. High-risk appetites might just pave the way for groundbreaking opportunities in FinTech. 2. AI's Role in FinTech: AI's transformative impact is expected to be a game-changer in 2024, offering efficiency and cost reductions across various financial sectors. 3. ESG’s Growing Influence: The role of ESG in FinTech is evolving, with a focus on conscious investing and the challenge of distinguishing impactful ESG initiatives. 4. The BNPL Debate: Buy Now Pay Later (BNPL) continues to be a topic of complex discussion, with varying implications in different markets. 5. Remote Work’s Future in FinTech: As remote work becomes a norm, it brings new dynamics to the industry, from talent arbitrage to inclusivity. ?? What are your thoughts on FinTech’s evolving landscape? https://lnkd.in/eRRmpDjb

Startups are risky. "Approximately nine in 10 shut down. But those failures rarely attract the attention of the broader public. They tend to happen early in a startup’s life—when the people who run it are still in trial-and-error mode. As a company gets bigger and achieves enticing revenue growth, it gets more love from some of the thousands of thick-pocketed venture capital firms that write checks so companies can scale quickly. As those investors pour in more and more capital, failures become less frequent. Or at least they used to." The saga of Convoy, a once-glorified freight network company encapsulates this shifting landscape. Initially, Convoy's innovative approach to making supply chains more efficient, backed by over $1 billion in funding, set them on a path of rapid growth. However, by the end of 2022, this unicorn's financial burdens from blitzscaling unsutainable unit economics led to its collapse. This narrative reflects a broader trend in the tech startup ecosystem. "Health startup Olive AI shut down in October. Design startup InVision said it would discontinue its business in January. Modular building company Veev announced a shutdown in November. Of course, there was the high-profile, scandalous blowup of the crypto exchange FTX, which shut down in 2022. But much of the pullback has been quietly playing out behind the scenes." Many companies have quietly raised more punitive rounds, sometimes keeping valuation flat (e.g. convertible notes) so I expect we'll see more stories like this in 2024 unfortunately. I'm obviously biased towards #Camels which prioritize sustainable unit economics, manage burn and take a long-term outlook (link in comments). But this is the first time I have heard of #unicorpses. Kudos Jessica Mathews at Fortune on the great piece. cc, Felicia Sinusas, Harvard Business Review #StartupEcosystem #TechInnovation #CamelStartups #SustainableGrowth #ConvoyStory https://lnkd.in/gsxCi5Qh

The news would have you believe that globalization is dead and borders are closed. The reality, from my vantage point in startups, is more nuanced. First, let's start on a reality check on the economy. I loved this quote: Not Bad, But Not Great. "Not bad because most countries outperformed expectations of a year ago. Not bad because sharply rising interest rates didn’t plunge the US, the eurozone and the UK into recession. Not bad because the war between Israel and Hamas has failed to send oil prices shooting above $100 a barrel. Not great because central banks face a balancing act between cutting interest rates too quickly and reigniting inflation, and keeping them too high and plunging their economies into recession..." The same balancing act is happening in globalization, and loved the framing of glocalisation - a strategic mix of global and local elements in economies. A few reasons I'm seeing: 1. Local players being primed to win in global categories (I will write a much longer piece on this soon). It is cheaper than ever to launch a business globally so naturally the local ones will emerge much faster and be more dynamic for local needs. 2. Push for supply chain localisation has created a push for particular enablement technologies. For instance B2B Marketplaces are driving transparency domestically (within markets) and in/out (exports). This is only beginning. 3. Because the blitzscaling era is over, the need for cash sustainability is rising, which further accelerates this localization trends (since global tech players have less cash to burn on expansionary efforts) ?? Looking Forward a few other takeaways I resonated with in this article - The stigma around industrial policies is fading, even in traditionally globalist platforms like Davos. - Green growth initiatives align with economic strategies, indicating a sustainable future. Glocalisation is a natural outcome of this - This is all dynamic. All is changing real time. So will our thinking. https://lnkd.in/gTFjnrb3 #Davos2024 #GlobalEconomy #Glocalisation #GreenEconomy #AI #WorldEconomicForum

Last year I read over 50 books, largely non-fiction business. I wanted to share my top five books of 2023, with a lens on informing a startup strategy, for entrepreneurs and investors (with links to some summaries & interviews in attached). ?? 1. "Powerlaw: Venture Capital And The Making Of The New Future" by Sebastian Mallaby A deep dive into how a small number of companies and venture capitalists are reshaping our world. Mallaby's perspective on building a venture capital 'moat' and strategies for sustainable growth was particularly noteworthy. ?? 2. "Chip War: The Fight for the World’s Most Critical Technology" by Chris Miller This book sheds light on the semiconductor industry's pivotal role in today's tech landscape, drawing parallels with the challenges and opportunities in fintech. An eye-opener on the interplay of global supply chains and regulatory landscapes. ?? 3. "Going Infinite: The Rise and Fall of a New Tycoon" by Michael Lewis A gripping narrative on Sam Bankman-Fried and FTX, emphasizing the critical importance of governance in fintech startups. A cautionary tale and a learning opportunity for investors and entrepreneurs alike. ?? 4. "Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail" by Ray Dalio Dalio's insights on macroeconomics and the shifting dynamics of reserve currencies are invaluable for understanding the broader financial context impacting fintech. ?? 5. "How to Invest: Masters on the Craft" by David Rubenstein Rubenstein's conversations with leading investors provide a masterclass in being contrarian and right. An essential read for venture capitalists seeking unique perspectives and untapped opportunities. What books did I miss? #FintechStrategy #VentureCapital #BookRecommendations #Entrepreneurship #InvestmentInsights https://lnkd.in/ee53_dBE

The last year has seen two opposite fintech trends. On the one hand, large #fintechs are going shopping. M&A is predicted to rise. On the other, M&A machines like Thrasio have announced bankrupcy. What's happening? In my latest Forbes column, I wanted to answer two questions: 1. When does it make sense to execute M&A as a technology startup? 2. How can you avoid the most common pitfalls? Thank you as well to Ross Buhrdorf from ZenBusiness, Jake Nice from StoicLane, Simon Khalaf from Marqeta. https://lnkd.in/gr4WG3mb

Mom, the Camel made it to the Economist! https://lnkd.in/gFtBzEaS