Fin-tech is one of the hottest sectors in the startup ecosystem to invest in, and it was one of the key topics that was touched upon during the recently concluded LetsIgnite 2017.
Part I: A chat between Amit Somani and Anuradha Ramachandran
The fin-tech chat was started off by Amit Somani of Prime Ventures and Anuradha Ramachandran of Omidyar Network. Amit gave his insights into fin-tech and how fin-tech startups have really made a mark for themselves in the last five years in the startup ecosystem. 1400 fin-tech companies have been started in the last five years; of them, 400 have been funded, and 125 of them have gone to Series A/B stage. Further, he stressed that 2017 is the year to bet on fin-tech startups and companies.
This point was reiterated by Anuradha Ramachandran of Omidyar Network, who explained how fin-tech is one of the core areas that they are looking to invest in 2017. Some of the key points that Anuradha touched upon include:
- Getting financial services to more and more people at the time that they need it is what makes fin-tech startups relevant.
- Fin-tech startups must look at banks and financial institutions as partners and friends, rather than foes.
- There is no fin-tech product that is more efficient and has lower cost of capital than a bank.
- How important disruptive banking is, which doesn’t mean disrupting banks and institutions, rather disrupting market segments.
- At seed stage, what is important is the fin-tech product and how it can disrupt the market.
- At Series A, what is important is a demonstration of ability to make money.
- Fin-tech startups need to have deep consumer understanding and customer differentiation. The startup team’s experience and the traction they have managed to create are important as well.
- Companies should be able to build great products to fill the gap by connecting to consumer behavior, rather than come up with a product they think is great and try to fit it into consumers’ lives.
Part II: Panel discussion on Fin-tech
The second part of the fin-tech segment at LetsIgnite 2017 was a panel discussion that was moderated by Amit Somani. The other panelists included, Srinivas Njay of Payjo, Mukund Mudras of Heckyl Technologies, Rohit Kulkarni of Payoneer, and Vinay Bagri of Niyo Solutions. The main point that was discussed was how it is relevant to move towards a cashless, paperless economy, especially in view of demonetization.
Some of the key insights from the panel discussion are here below:
- How using AI in banking can be helpful in making it more accessible to people.
- Banks and fin-tech startups need to co-exist, work with, and also compete with each other for a healthy ecosystem.
- A healthy competition between fin-tech startups and banks is ultimately good for the consumer, while it keeps companies on their toes.
- Fin-tech startups are making inroads by catering to the lower ticket sizes of requests that are not possible for regular banks.
- Banks are efficient in managing capital but inefficient in managing silos.
- How banks under-use technology, which is a huge opportunity for fin-tech startups to find solutions for.