This Is Still the Hottest Sector of the Market

TRANSCRIPT

Alex Moschina: Hello and welcome to Venture Spotlight. This is our first video edition in some time. I’m Alex Moschina and I’m joined, of course, by Andy Snyder, the founder of Manward Press. Happy Friday, Andy. How are things up there?

Andy Snyder: It’s Friday. It’s always a good thing. Things are very well and I hope things are well on that end.

Alex Moschina: Yes, they are. Yeah, you’re right, Friday allows you to overlook. It could be rainy, it could be blizzardy, but it’s Friday so it’s a nice even keel. I’m glad to hear things are good up there. I think we’re going to have a really good discussion. Just to be clear, you and I pre-gamed today’s conversation and we’re set to talk about what was the biggest sector in terms of venture capital investment last year and many are saying that for overall investing it’s going to dominate for the next half century or so. So a pretty big deal. In other words, it’s the very definition of the type of growth opportunity that we’re looking to cover here in Venture Spotlight and bring to you all.

But yeah, why don’t I put this in your capable hands, Andy? You can frame the discussion and we can go from there.

Andy Snyder: Sure. I mean, let’s get right to it. We’re talking about fintech. It was the leading sector for VC money last year, up 177% from the year before, which is even tremendous growth then. Close to $200 billion invested in just the VC level. If we include mergers and acquisitions and some public funding, it gets even bigger. Hundreds of billions of dollars going into this sector.

And really you have to look at that and think, why is this happening? Why is so much money going into fintech? We can look at why money went into crypto and we can see some of the promises and the speculation there, but what’s different about FinTech and the technology behind it? And I have a long list of CEOs who are saying digitization of not just money but all things finance, all things investing, is the future of money, and why is that? And, really, it’s just the next step, the next evolution in where we’ve been. We’ve gone from no internet to dial up internet to high speed internet on our computers to internet wherever.

Alex Moschina: To this conversation now.

Andy Snyder: Exactly.

Alex Moschina: I mean, could you imagine this conversation? I remember this being in Back to the Future II, which some people may remember, people talking over video and it’s like, “Yeah, great. In the very far off future maybe that’ll happen.” But now we’re here and I talk to you every day on my computer. Aren’t we lucky?

Alex Moschina: I love it. That’s probably why you like Fridays… because I don’t talk to you on Saturday or Sunday. Sometimes.

Andy Snyder: I mentioned those CEOs, and I’ve talked about this a lot throughout the last week. I mentioned it on a video call with our subscribers this week. I wrote about it Manward Financial Digest. But the folks at Bloomberg just asked several CEOs what they think the next 30 years look like. I read it and went through it and I saw some through lines, some golden threads throughout that. And Adena Friedman, the CEO of Nasdaq, the company that took trading from really open-cry exchange on the floor to fully digital, push things through, again, that evolution, and she says, “The technology will exist to allow for every asset on the planet to be digitized and available to be bought and sold in an instantaneous way.” So that’s that the fintech idea.

David Solomon, CEO of Goldman Sachs, says, “Most businesses are dealing with accelerating trend of digitization around their business and automation.” I happen to think that blockchain technology is an early version of technologies that will ultimately be used to further digitize the infrastructure of financial services. That’s the idea… that blockchain is ultimately where we’re going in that digitization. Then we have Jane Fraser, the CEO of Citi, a company you don’t see shaking too many trees and going out on a limb and saying crazy things, this is pretty fundamental stuff, she says, “We are moving toward a boundless virtual economy in which markets do not open or close, digital asset on and off ramps are limitless, and Metaverse activities are widespread.”

Now listen to this next part. “Digital assets will be widely embraced and securitized and we’ll see asset avatars that exist in more than one form between traditional assets, digital native assets, and tokenized versions of traditional assets.”

That’s absolutely huge because what we’re seeing now is, if you want in on something, you go onto the NASDAQ exchange, you go to your broker, and buy share of it. But what we’re starting to see is the crypto come in, maybe we can buy something on a couple different blockchains or we can buy something on a couple different brokers, and we can buy maybe a tokenized version of that same equity. And that really is the future. And that’s what we’re looking at here and why we’re seeing so much money, so much money in the private sector go into these little companies.

We’ve seen Uber shake up the taxi industry, but that’s just the first of it. Look what Uber was. All it was, was instead of hailing a taxi and dealing with somebody we don’t know and getting whoever pulls over to the side of the road, now we can go to our phone, plug in exactly what we want, get a competitive price, see the ratings on the driver, see the driver pull up, know that’s the guy that’s picking us up. It’s safer, quicker, easier and cheaper.

Now, imagine if we do that all throughout the financial world, insurance, banking, lending, you name it, all these different things. It won’t necessarily be an app on our phone, but it’ll be that same streamlined technology behind it. And that’s why Citi’s getting in on this, Goldman Sachs sees the investment opportunities, all the big banks. If I was Visa and MasterCard, just like Yellow Taxi, I’d be worried about what’s going to happen as this new technology comes in.

If they’re not ahead of it, if they’re not taking part of it or if they’re not buying these little companies that are starting up, there’s going to be some trouble there. So we look at the last year or two where fintech has gotten almost $200 billion of investments, but then we hear in the next 30 years, this trend is only going to multiply. And I think back to 30 years ago, what were we looking at? We were looking at the early stages of tech stocks, especially 25 years ago. And I think of something like Amazon. Would I want to buy Amazon today or would I have wanted to buy at 25, 30 years ago when it was just a nascent technology and we’re thinking, “Hm, this sounds interesting. Someday I bet Alex and Andy here are going to be talking on Zoom all the time. I bet someday that you’ll be able to go into your computer or your phone and with two clicks, be able to buy a package and send it to you”?

And if you did that, Amazon, for splits and adjustments for all that, Amazon’s IPO price, again, adjusting for splits was about $0.09. Today, it’s over $100 per share. So if Amazon goes up just a fraction of a percent today, early investors are doubling their money every time it goes up that %0.09. So just imagine that, and that’s the value of getting in on something early. Yeah, you can double your money from here if Amazon goes up to 200 bucks over the next five years, but imagine what that means for those early investors that had just a small bit of cash in at the nascent, the very early stage of all this. So clearly that’s why folks are getting into fintech.

Alex Moschina: You mentioned in the beginning there, you were talking about mergers and acquisitions and you were talking about credit card companies and banks being worried about what could be coming. I think it’s really telling we’re just at the tail end of Consensus, which is a major blockchain cryptocurrency conference that’s happened every year for the past several years, and there was major banking and major credit card companies were present there and they were speaking and they were talking about their commitment to investing in this space or developing their own programs. Many of the companies that are coming out, they’ve either been taken over or they’ve become takeover targets because companies want this technology. They don’t want to get left behind. Everybody has the Blockbuster to Netflix, Yellow Cab to Uber concern in their head right now and they’re trying to get into the next big thing.

And there’s one other thing that you mentioned, which is what’s driving growth in this space. It’s that but it’s also consumer demand, because so many of these companies within FinTech, the larger idea built into most FinTech technology is this idea of decentralization, digitization but also decentralization. And that’s what people want. They want more competition. They don’t want these companies to have monopolies. People should be able to own, be able to buy shares of a stock. Say, “I want to buy Amazon stock, but I’d rather buy it on the blockchain,” or, “I want the freedom to own it or purchase it through different avenues.”

And that stuff is really driving up where VC investment is coming from. These investors are looking at where the consumer is coming from and what they’re pushing for and then they’re seeing the dollar signs and pushing it forward. So, I mean, I think that’s where you get these claims and these predictions that fintech is going to be the space to invest in over the next 30, 50 years.

Andy Snyder: Yeah, absolutely. I mean, over the last few months, we’ve looked at everything from coffee and beer startups. Where would you want to put your money? It’s a no brainer. Somebody that’s doing something new in a huge trillions of dollar market that is setting the tone for how things are going to change in 30 years versus a small brewery down near Cancun, Mexico. The opportunity’s in both of them, but, man, if I’m putting odds on something, the odds are way better with the much bigger, global domination of this fintech and the revolution of what’s happening in front of us. I mean, some of the smartest, most experienced insiders on the planet are seeing it and talking about it. Why would you not want to join in on that? That revolution is absolutely huge.

Alex Moschina: Yeah. And I mean, that’s why, you’re speaking of the big names talking about it. So you recently had a conversation with Buck Sexton. Folks who have been following Venture Spotlight closely have probably heard about the interview that you did with Buck where you were talking in large part about one of the bigger corners of fintech and a development there and one investment, this $5 investment that you discussed with Buck, along with overarching commentary on the sector and this one piece of it that’s looking very exciting. It’s really a new asset. It falls outside. It’s almost like the missing link between startups and crypto, if that makes sense. But, anyway, rather than tack on that conversation to this one – we like to keep these snappy – I’ll just make sure that we include a link below this video so that if you haven’t seen it, you can check it out.

If you’re interested in what we discussed in this conversation and if you want a direct action to take after hearing about all of the growth potential within fintech, definitely click that link. Check it out. I think it’ll be worth your time. You’ll learn a lot more. There’s a lot more specific facts and figures as well if you’re weighing whether or not to get into this space. Although, I can’t really see how any of the CEOs you mentioned or any of the many hundreds of venture capitalists who’ve gotten into fintech last year, I can’t imagine that they’re all barking up the wrong tree.

But we’re all about putting the information in your hands, letting you check it out, and make informed decisions. That’s the point of this series and I think we did a pretty good job with that today.

I don’t know, Andy. What do you rate us at here?

Andy Snyder: Well, it’s a 10 out of 10 always. But just to make it a 10.5, so you mentioned it’s a corner of this market, I’d say what we’re talking about in that interview is the foundation. We can’t go to the next step without it, which is why I’m so excited.

And the other thing within that is, you talked about taking action. I do recommend a ticker in there, so check that out. I get very specific about how to buy it, what to do. So definitely check out that link and check out that ticker. There’s certainly some opportunity in it.

Alex Moschina: Great. Well, like I said, we’ll have the link below this video so you can check it out right now. You don’t have to wait. But beyond that, I think for now, we’ve whetted your appetite for fintech, and we’ll certainly be talking about it more and more over the weeks ahead.

As always, if you have any questions, send them to mailbag@manwardpress.com. And until next Friday, we hope you have a great weekend and a great start to next week.