Anthemis Industry Insights: How Does Fintech Thrive in a Bear Market?
While much about the current environment remains unknown, it is important for us at Anthemis to share our knowledge and information on the current market and the opportunities it presents for investing in fintech.
On Tuesday, March 31, I moderated “How Does Fintech Thrive in a Bear Market?”, a webinar featuring our founders Amy Nauiokas and Sean Park. During the forum they shared insights on:
- Why should you continue to invest in fintech in this macroeconomic environment?
- How can fintech startups thrive in this environment?
- What are the top fintech investment opportunities?
Amy began by sharing the history of Anthemis — started on the Monday following the Lehman Brothers collapse. She reinforced that she and Sean have been investing in early stage companies in various market cycles. In fact, Anthemis was built upon an investment thesis, (and continues to focus on) creating resilience and efficiency in the financial system by investing in digital business models that work in collaboration with the existing incumbents to create a stronger foundation for the entire economy.
She stated, “We continue to remain highly convicted that the current events will accelerate certain themes of our thesis and that this market dislocation will provide savvy investors with massive investment opportunities. With market dislocation, innovation and opportunities thrive.” Our focus remains on:
- Enhancing our portfolio success function to support our 100+ portfolio companies
- Continuing to build our pipeline and deploying capital (#weareopenforbusiness)
- Encouraging our employees, founders, investors and other members of our ecosystem to remain composed — we will persevere together.
Following this overview, Sean bifurcated his macro view into two time horizons. “These next two quarters (short-term) will be very challenging. The tactical decisions we need to make as investors and founders are about survival: cash burn, time to market, sales cycles, unit economics and expense/people management”. Due to our heterogeneous portfolio, some business models will thrive during this disruption, others will not.”
Secondly, the longer term horizon (3–10 years) is also very important. Sean stated, “Nothing has changed. We remain convicted of our investment thesis and that none of those fundamental long-term secular trends are really called into question. On the contrary, if there’s any risk, it is that the move towards those end goals will be accelerated.”
Finally, we discussed Amy and Sean’s favorite investment themes. Examples included:
- Embedded Finance
- Digitizing legacy models
- Democratization of financial services
- Venture building
- Infrastructure as a service
- Servicing the Small Medium Enterprise (SME) space
- “Rebundling” of the customer
- Global expansion
- Focus on paths to profitability
To conclude the discussion, Amy and Sean both weighed in with their thoughts on the following in a lightning round of Q&A. Questions asked included: valuations (which we expect to normalize temporarily), fundraising/business development (which will take longer), opportunities in emerging markets (selective), activity within the corporate venture space (this dislocation will separate the good from the bad), and gender equity and how women are helping us win the war against COVID-19.
To find out more about what Amy and Sean shared during the live forum, listen to the replay.
