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8 fintech VCs discuss the changing investment landscape and how to pitch them in Q3 2022 – londonbusinessblog.com

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According to CB Insights, more than 20% of venture dollars went to fintech startups worldwide last year. Equally noteworthy:
One third of all unicorns created in 2021 were fintech companies.

This year, market conditions are dramatically different in every sector, including fintech. But while the pace of funding in the fintech space has been noticeably slower – and declining – this year, the fact remains that the sector still accounts for a significant portion of global venture capital funding. For example, in the second quarter, about 18% of global venture dollars went to fintech startups.

To give londonbusinessblog.com+ readers specific knowledge about what fintech investors are currently looking for and what you need to understand before approaching them, we’ve interviewed eight active venture capitalists in the industry over the past few weeks. Their answers have been edited for brevity and clarity.

Here’s who we polled:


Paul Stamas, managing partner and co-head of financial services, General Atlantic

Globally, fintech startups raised $131.5 billion in venture capital by 2021. As a company that has been investing in the space for a while, what differences in the landscape have you seen since this time last year? Were deals much more competitive last year?

There is no doubt that the deal environment is now slower than last year at this time, especially with regard to late-stage growth. Many companies are rightly internally focused on optimizing their business and wait to test the market. There still seems to be a bid-ask spread in private market expectations relative to, for example, public market valuations.

Deals feel a little less competitive, but there are still many lenders — General Atlantic being one of them — eager to continue investing in great opportunities and supporting great entrepreneurs. The environment has caused the pace of a deal to slow down, which frankly is probably a good thing. It gives companies and investors more time to get to know each other and exercise due diligence, both ways.

“Adversity breeds tenacity and we predict some exceptional companies will emerge from this market cycle.” Justin Overdorff, partner, Lightspeed Venture Partners

Many people call this a downturn. How has your investment thesis changed in recent months and are you still closing deals at the same speed?

Our position has largely remained the same. We are still excited to invest in longstanding themes related to the transition to the digital economy and the globalization of entrepreneurship, and we are actively seeking opportunities to support visionary entrepreneurs with proven business models. What has always been the case is that we are drawn to situations where we believe, and where the company believes, that we can be a trusted partner and add substantial value. As we move into a more challenging macro environment, that promise may resonate even more. We would like to think that our 40-plus year track record in some complex operating environments allows us to help.

Fintech companies often have multiple sources of income: adding new product lines, building in payments, etc. How viable will these levers be for fintech companies in 2022 looking to defend their 2020-2021 growth rates?

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