Finovate Europe 2022: fintech investment trends – where’s the smart money going?
Identifying the ‘next big thing’ is key for investors in any industry.
Panelists at Finovate Europe 2022 discussed the fintech investment landscape
At Finovate Europe 2022, a panel of three investment professionals took to the stage to discuss what’s front of mind for them and their investment firms when it comes to fintech.
The panel featured Luis Valdich, managing director at Citi Ventures, the venture capital arm of Citi. His focus is on making investments in fintech, particularly.
He was joined by Joe Watson from Albion VC, a UK-based B2B technology investor, which manages approximately $1 billion of capital, investing throughout the UK across fintech and enterprise software. Wilson said fintech comprises about 20% of Albion’s AUM, which is growing year-on-year.
Rounding off the panel was Aman Ghei, partner at Finch Capital, a growth investor which has made about 50 fintech investments in the last eight years, all in Europe. Finch manages approximately half a billion dollars’ worth of capital.
The panelists kicked off by discussing new or emerging trends that they are seeing in the market.
“I think the big buzzword this year is embedded finance. I think it’ll be interesting to see what that evolves into,” thinks Finch’s Ghei.
He adds insurance has led the way in terms of what exactly the embedded finance ‘product’ looks like.
And the reason why the industry is about to hit peak embedded finance? Because, Ghei says, “people have figured out that distribution is really hard. It costs a lot of money and capital. Why should we go and do that when somebody else has already solved that problem?”
Albion’s Wilson agrees with Ghei, adding that embedded finance “reminds me of blockchain in 2017”.
While embedded finance is his top emerging trend, Wilson also listed “anything decentralised”, including Web3, blockchain and crypto products and services. Rounding out his top three investment trends is green finance, or sustainable finance. “Those are three broad topic areas that we spend time on.”
Citi’s Valdich says his firm is also focused on those areas but thinks there’s also many other “very interesting” opportunities.
He says the democratisation of finance, particularly from a financial inclusion standpoint, bringing unbanked or underbanked individuals into financial services, is a key future focus for Citi Ventures.
“Providing access to investment products that before were only reserved for the top 0.01% and the ultra-high net worth individual, there’s a lot of very interesting companies emerging in that space,” Valdich says.
He adds some of these firms may be leveraging blockchain technology or algorithms, while others are embedding fractional trading.
“So, there’s a bit of convergence with embedded fintech, embedded wealth into all types of financial services, or non-financial products.”
Valdich cited a company that Citi Ventures has invested in that provides customers access to fractional stocks. “You can buy $1 worth of Apple stock, for example.”
“I think there’s very interesting trends around democratising access for everyone to these kinds of products,” Valdich concluded.
