Fintech Focus Rewind: What Does Venmo's First Investor Think Is Missing In Fintech?
The Fintech Focus Rewind is a recurring feature in which we revisit previous episodes of Benzinga's Fintech Focus Podcast. To get the Fintech Focus delivered to your inbox weekly, subscribe to the Fintech Focus newsletter. Don’t forget to check out upcoming programming at Benzinga events.
The fintech revolution has changed how we operate our finances, but why are digital platforms for things like mortgages still hard to come by?
Listeners to episode one of the Fintech Focus podcast already have some insight into that question. In the inaugural episode, recorded last October, Benzinga talked with Venture Capitalist Kamran Ansari about his history shepherding many of the titans of the fintech world while they found their feet, and his thoughts on what is lacking in the fintech arena.
As a partner at Greycroft, a private equity firm focused on technology startups, Ansari was among the first investors in companies like Venmo and Braintree. The firm has also invested in companies well-known by consumers, such as Bird, Acorns, and Shipt.
A Bite From The Tech Bug
Ansari first became interested in tech as a graduate student at Stanford, immediately joining a Silicon Valley-based venture fund upon graduating. One of the first startups Ansari consulted was My Yearbook, a social networking site focused on reuniting high school classmates. He helped the company, now known as Meet Me (NASDAQ: MEET), rebrand and go public. After these initial entrees into the startup world, Ansari joined Greycroft in 2012.
“What I like about it is being involved with technology companies and working with great founders,” Ansari said. “Especially from the earlier stages where it's just a few guys or women in a room thinking about an idea all the way to some of the companies I've been involved with now have multiple hundreds of employees and offices. It's just an amazing experience to kind of see that ride from the beginning.”
Ansari also served as head of corporate development and strategy at Pinterest (NYSE: PINS) for just over three years in addition to his role at Greycroft.
The Eye For The Next Fintech Star
Greycroft’s investment in Venmo, now owned by PayPal Inc (NASDAQ: PYPL), spearheaded the firm’s specialization in fintech. After that, Ansari led the team working with Azimo and Fortuno, both digital payments companies, which eventually led the firm to invest in personal finance app Acorns.
Ansari is now looking to invest in other industries like mortgage-tech because he thinks this area is in need of more innovation.
“I still don't think we've seen a ton of innovation, as I mentioned, for example, around mortgage,” Ansari said. “Mortgage is a subset of lending, but it is the largest subset. It is by itself in some ways a super-category. And a lot of folks have tried and they've come after it. It's been very, very, difficult and messy area because of how complicated mortgage applications are. Which, I think, is an opportunity, right? To make that simpler. So that's why I think that's a space that I'm excited about and looking for interesting concepts and have met with a few companies in that domain.”
How He Chooses His Investments
Ansari said he prefers finding a start-up that is further along in the funding-gathering process when he’s evaluating companies. He also prefers companies that will let him be involved in some decision making.
“I think if you can get involved at the seed stage and write a meaningful check and really be involved in the company as opposed to just a passive investor that writes a $100,000 check and checks in with the team every six months, that's a different thing,” Ansari said. “But if you can put in half a million, a million dollars of a two, three million round and be closely involved with the company, that, I think, is valuable and there aren't that many funds doing those kinds of deals.”
Ansari said he prefers investing in companies where the CEO has relevant industry experience. But at the end of the day, the most important thing a CEO can do is to never lose the scrappy attitude, even as the company grows.
“I think the best companies have managed to maintain a scrappy entrepreneurial nature even if they've scaled, which enables the smartest and best people to feel like they can actually have an impact as opposed to feeling held back,” Ansari said. “So I think that is so critical because I think when you find that talented people leave companies, it's almost entirely for that reason. It's not because of money. It's not because my stock wasn't enough. It is almost entirely because they're stuck under a manager who's not letting them flourish because of processes in an organization and they don't think they have an impact.”
Listen to the full podcast below to hear more.
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