Born Multi-Product; Wells Fargo’s strategy map; How to get started with BaaS - Five key things to look for in a BaaS provider;
Welcome to this week’s Fintech Wrap Up, where we dive into the rise of multi-product strategies in SaaS, Wells Fargo’s fintech partnerships driving innovation, and the latest surge in global crypto activity.
Insights & Reports:
7?? State of Crypto Report 2024: New data on swing states, stablecoins, AI, builder energy, and more
TL;DR:
Hey everyone, welcome back to this week’s edition of Fintech Wrap Up! We've got some exciting insights and updates in the world of fintech, payments, and banking, so let's dive right in.
First up, we explore the multi-product strategy, which is becoming the holy grail for software businesses, especially in vertical SaaS . By expanding product offerings to existing customers, businesses can boost their ARPU and TAM , helping scale faster and more efficiently. This approach is particularly useful as companies navigate the delicate balance between prioritizing ARPU growth versus expanding to new locations.
Wells Fargo has been busy partnering with fintech startups to enhance their offerings, especially in business banking, wealth management, and payments. From AI-driven fraud prevention to cross-border payments and virtual cards, they’re building an impressive fintech ecosystem that’s worth keeping an eye on.
Payment orchestration platforms are also making waves in Europe, helping merchants optimize their payment flows and reduce fees by connecting to multiple payment processors. This is crucial for handling different markets and ensuring operational resilience.
But it’s not all smooth sailing in the payment world. The days of easy growth are over, with a significant slowdown expected in North America and Europe , while Latin America and Asia-Pacific are still showing strong potential for growth. This shift is prompting payment companies to rethink their strategies as the market matures.
On the crypto front, activity hit an all-time high with over 220 million active addresses, primarily driven by Solana and emerging platforms like Coinbase’s Base . And let’s not forget the global rise of mobile crypto wallets, especially in regions like Nigeria and Argentina , where crypto adoption is thriving.
In other news, Klarna is offloading its UK BNPL portfolio, freeing up billions for future growth, while Monzo celebrates hitting 500,000 business customers with the launch of its new transparent blue expense cards. Meanwhile, Robinhood expands its desktop platform with new features aimed at attracting serious traders.
That’s it for this edition—thanks for reading, and I’ll see you in the next one!
Insights & Reports?
Born Multi-Product
Multi-Product is the holy grail for software businesses. Acquiring customers is usually one of the most expensive aspects of building any software company. Selling multiple products to the same customer allows you to amortize that sales and marketing expense, expanding ARPU and TAM.
Vertical SaaS vendors (VSVs) are inherently multi-product. Their merchant customers want a single point of accountability; by leveraging a control point.
When: ARPU vs. Locations?
The two levers of growth for a VSV are locations and ARPU. Most companies are limited in resources, and opportunity cost is real—so when should you prioritize multi-product/ARPU growth over locations? All situations are unique, but two concepts tend to drive the answer: control points and TAM. If you are confident you are focusing on the right control point and you have sufficient GTM economics, always default to prioritizing locations. If you truly occupy the control point, you can sell other solutions later. Keep scaling locations until you see a horizon where location growth will decelerate.
At some point in your company's journey, you start hitting the ceiling of the location count in your geography, and growth slows. As you saturate your ideal customer segments, you will start to see increases in CAC and close times. Before that happens—ideally a couple of years before—you should consider expanding your geography or segment. Expanding tends to be high-risk and requires a significant investment, so you want to give yourself a couple of years to get it right before your core location growth slows.
Wells Fargo’s strategy map
Wells Fargo is the fourth-largest bank in the US by total assets, with a market capitalization of around $138B. Its customer base of over 70M spans across 8,700+ locations worldwide.
Over the last few years, the company has turned to fintech startups to help meet customer demand for secure, seamless, and customized banking experiences. Its recent investments and partnerships have targeted solutions that enhance its offerings to business banking and wealth management clients.
For example, Wells Fargo and its primary investment arm, Wells Fargo Strategic Capital, have backed several cash and spend management automation fintechs to better address the needs of business clients. On the wealth management side, Wells Fargo’s partnerships have allowed it to embed AI and natural language processing (NLP) into its back-end processes, such as market intelligence research and user onboarding.
The banking giant is also investing to amp up its core processes, focusing on quick cross-border transfers and virtual card offerings.
1. Accounting & Cash Management: Wells Fargo has advanced cash management and automation for business banking clients by investing in companies like Trovata for cash forecasting, DadeSystems for accounts receivable (AR) automation, and Bill com for integrated AR/AP solutions. These investments streamline financial operations for businesses.
Curated News
Klarna sells loans to hedge fund Elliott to free up ￡30bn for growth
Klarna is offloading most of its UK “buy now, pay later” portfolio to US hedge fund Elliott for undisclosed terms, in a deal that will free up as much as ￡30bn for new loans, according to people familiar with the matter
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Nicely done
Strategy & Digital Transformation Consulting Partner | Board Advisor | AI | Cards, Payments & Open Banking | MBA, INSEAD AMP'19Jul, CGM'20 and IDP-C'24Mar | MPE2025 Advisory Board & Ambassador
1 个月Very insightful Sam, thanks!
CVO童子军投资者风险投资基金2025PE FO LP GP. 文字:+971551704781Botim/WA. 全球搜索引擎优化：国际搜索可见性交易流量-24SIX9，ITIL，CNCF，ICANN，GITEX，银行，OSINT
1 个月#FinTech