Investing in Fintech: Experts’ Thoughts from Slush

News05.12.2018 03:05


Mash goes Slush

Investing in fintech companies, and likewise in all types of companies, might be at one of its biggest turning points in a long time. When companies start offering bond tokens and we can make investments using cryptocurrencies, how will that change investing as a whole?

We met with experts at Slush and asked them to offer their insights to these questions.

Here’s What You Need To Know When Investing in Fintech

Investing in a fintech company follows many of the same rules as investing in most other types of companies. But it does have its own special aspects as well. What would seasoned investors consider most if they were to find an interesting fintech company?

If you're looking at a start-up, Antti Kosunen, co-founder of Nestholma, has a very clear answer: "The team, the team, the team", Kosunen says and adds: “The basic idea of the company should also be such that it can be pushed to the market quickly enough and big enough.”

Rafael Aldon, Director at VenturesOne, also emphasizes the importance of finding a good team and lists some simple yet highly essential questions to consider. “Ask yourself if this is the right team bringing the right solution to a big enough problem, and in a way that is more likely to succeed than others”, Aldon advises.

Investing in a fintech company can also involve plenty of regulation for example in the European Union, reminds Phil Dardier, Senior Partner at Avolta Partners. “You need to have regulatory mastery of your topic. Second, you need to make sure that you can scale and that you are responding to real needs. Whether there’s competition or not is secondary.”

Are We Soon Buying Shares with Cryptocurrencies?

There have been some examples already where companies have stepped into the future and taken advantage of bond tokens and cryptocurrencies. So the possibilities are real. Will they play a big role in buying shares in the future or are the current traditions going to prevail?

"This question would deserve a book of its own", Aldon says. "The big wins in tokenising asset classes come via efficiency gains from leveraging the unique properties of blockchains."

He sees great possibilities to many financial instruments leveraging distributed ledger technology, such as bonds and equities. "This sounds like an incremental advantage over traditional methods. But early cars weren’t that much better than a horse and cart – and we know how that played out."

Dardier is a strong proponent of the idea that cryptocurrencies are here to stay. "It's been professionalizing itself. Now it's no longer the geek community, now financiers are getting involved with very stringent requirements which originate from the regulatory world."

Kosunen doesn't see cryptocurrencies as such taking off quite yet. He agrees that blockchain as a technology will have an effect on investing, but the current currencies will prevail.

"Except if we're talking about very long-term. Then I believe in currencies that aren't tied to any one government or state."

Fintech Taking Over Slush

This year Slush is packed with big fintech names and speakers, such as PayPal COO Bill Ready and iZettle CEO Jacob de Geer. In Kosunen's view, this shows that fintech has already entered the mainstream.

Aldon thinks it also tells something about the event itself, that it has the power to attract influential speakers at a time when there is an abundance of different conferences competing with one another.

"It means Slush really delivers a great experience. Something different, more relaxed and welcoming, and perhaps a bit less stiff than other events.”

He sees that since it's a non-profit event and everything works thanks to volunteers, it creates a really strong feeling of community. "It's people that build companies, after all."

The start-up atmosphere of Slush can also be attractive to huge companies, speculates Dardier. "I think all big firms want to be seen associated with the dynamics of a start-up. They like to go back to the roots, or being seen with that.”

He also thinks bigger companies and even larger banks prefer something like Slush as opposed to traditional banking conferences. "They want to see what's happening so they don't get caught off guard", Dardier says.

It's the ecosystem of today.

P.S. Read also what it's actually like to work in the fintech field?