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The Front Page of Global Fintech

The the largest fintech community in the world. Subscribe to our newsletter to stay up to date on the latest in news opinions, and all things financial technology.

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🎧 Podcast : Hey Fintech Friends #16 ft Vivek Krishnamurthy

But, we try to take ideas from the earliest stages, and help them get to the maximum exposure, right, whether that's helping the most amount of consumers or banks or insurance carriers as possible.

"But, we try to take ideas from the earliest stages, and help them get to the maximum exposure, right, whether that's helping the most amount of consumers or banks or insurance carriers as possible"

‎Hey Fintech Friends!: 🎧 Hey Fintech Friends ft Vivek Krishnamurthy on Apple Podcasts
‎Show Hey Fintech Friends!, Ep 🎧 Hey Fintech Friends ft Vivek Krishnamurthy - 29 Mar 2023



Helen  0:00
Hey FinTech friends.

Hey FinTech friends. My name is Helen Femi Williams and I'm your host of Hey FinTech friends. I hope you're doing well. I know I am.

So let's talk about the structure of this podcast. We're gonna go through the FinTechionary, the news. And if you subscribe to The this week in FinTech newsletter, you're in luck because this is the audio version. Then we're going to have chat with this week's friends Vivek, and then we'll go through signals and events. So hope you enjoy this episode.

Fintechtionary: APMs

According to UAB, APMs or Alternative Payment Methods are defined as any form of payment other than cash or major card networks such as Mastercard, Visa, etc. The most popular alternative payment methods are prepaid cards, digital wallets, mobile payments, and BNPL (Buy Now Pay Later) loans.

A Banking as a Service provider can help provide online merchants and platforms with the tools needed to accept an ever-growing range of payment methods. Generally, the site or platform that accepts APMs pays a fee to integrate and offer this service to their customers.


💵 Debt Financing

  • TradeBridge, a UK business lender, received a £100 million credit facility from Castlelake.
🤝 M&A - Fintech
  • Card network Mastercard acquired Swedish cybersecurity firm Baffin Bay to build a protective layer into card transactions.
  • JP Morgan announced that it will acquire private capital markets investment analytics provider Aumni, paying roughly what it was valued in its last round ($232 million) to help venture capital investors better track their startup equity holdings.
  • South Korean ride hailing giant Kakao Mobility made its first acquisition, buying UK superapp-as-a-service platform Splyt, which helps companies launch financial services apps.
  • Payments infrastructure provider Mangopay acquired Irish payments tech provider WhenThen.
  • Real estate purchase platform Homebot acquired first-time mortgage app Quo Finance.
  • Global payments technology provider ACI Worldwide is discussing a potential sale with private equity firm Motive Partners. Publicly-listed ACI has a market value of around $2.5 billion.
  • UK money-saving app Snoop is working with bankers at Rothschild on a potential sale after reportedly being approached by acquirers.
🏦 M&A - Bank and FinServ
  • In a quick and incredible end to its saga of the last week, Swiss investment and retail banking giant UBS agreed to acquire its competitor Credit Suisse, once valued at ₣23 billion, for $3.2 billion, under pressure from the Swiss central bank, putting stress on not just the banking sector but Switzerland’s banking reputation writ large.
  • Meanwhile in the US, while the FDIC has not yet found a buyer for Silicon Valley Bank, they are reportedly considering carving up the assets for sale, and First Citizens Bank is weighing a takeover.
  • And First Republic, whose stock has been under fire due to its exposure to the tech industry, is working with JP Morgan to reportedly find a buyer in a distressed acquisition as well.
  • New York Community Bancorp emerged as the final buyer for failed crypto-exposed bank Signature Bank, but will not be taking over the bank’s crypto assets.

Interview with Vivek

Vivek is a Principal at Commerce Ventures, an early stage venture capital fund focused on FinTech, InsurTech and RetailTech. His recent thematic focus has been on vertical fintechs (Mudflap, Zentist, Canary Technologies), embedded fin serv distribution (Zeal, Mercantile) as well as insurance data & platforms (Flueid, Authentic). Prior to venture capital, he spent several years on the investment banking team at Financial Technology Partners where he worked on M&A and private placement transactions for numerous growth & late stage FinTechs and InsurTech companies.   Hope you enjoy this epsiode!

Vivek 05:18

So I am calling from maybe the second smallest hotel room I've ever been in. In New York City. There's this like a unique feeling of being in a room where there's like less than three feet on either side of the bed, inside of like a 20 story in New York hotel that makes you realise how insignificant you are. But that's that's where I'm calling from. So I came out here for a board meeting in Tampa, I have a couple portfolio companies in New York and Philadelphia. So I thought I'd swing by and humiliate myself in a small hotel room for just a little bit.

Helen 05:49
And I bet it still cost a fortune at the same time.

Vivek 05:51
Oh, absolutely. I they might charge you to smile here. It's, it's pretty, it's pretty rough.

Helen 05:57

I think smallest hotel that I'd ever gone to when I stayed in was in Hong Kong. And I've always looked at London and been like, obviously, housing crisis, there's nowhere to live. And then I went to Hong Kong. And I was like, this is like, next level. This is crazy.

Vivek 06:11

It's different beasts, I will say coming for like for the US to the UK. And like, European hotels, that seems tiny to me. Like, I feel like US hotels have like living rooms in the main room normally. And then you go to the UK, you're like, Wow, this is really small. And then you go to Asia, and you're like, Okay, it's just a bunk bed. This is just a totally different life experience. Yeah,

Helen 06:33

I'm thinking about it now. And it's like when I did when I was like, in this, that region of the world, I was younger. So probably like, my budget and what what I think I deserved was probably.

Vivek 06:44

So I just had this experience where I went back to my fiancee and I went back to Europe for like 10 days, and I recreated my like, post college like on a budget, McDonald's European adventure. And I was like, wow, this is much more like much more enjoyable when you're not sleeping under a bridge. This is so much better. Like it's less hot somehow, like I can control the weather by like staying indoors for longer periods of time. So it's it was like visiting totally new countries because I could like afford to eat at places that had tables and chairs and like silverware. Yeah. So highly recommend, if you haven't revisited places from now, that's

Helen 07:23

a really good point. Because I remember, there was a point where I just got like, stuck in this loop of this island, like just off the coast of Bali. So it's like one of the Gli Islands. And honestly, there was a point where I stayed there for a month. There was another point where I was like, I'm gonna go back for my birthday. And my sister had come from the UK to join me. And then I was just like, so happy staying in this like, essentially, a net, like a hostel with like a net. And obviously, she's coming from the UK. And just like, I am not staying here is. And she was just like, I will pay for the hotel because I don't want to live like this. And it's like, really truly , my standards are so low that I'm literally arguing over like pennies here. And it's like, I can't just stay in a nice place. But in my head, I just that that that thought didn't even cross my mind. Because I was like, that's fine. Like, why do I need that? Yeah,

Vivek 08:17

I hear you. I think about like a younger me and my ability to put up with garbage. And I am like in awe. Like I was I will never forget this. When I moved to San Francisco. I submitted my to my new landlord that made you fill up this form. And it's like, how much did you spend on rent in your last place? And I had spent $411 splitting a, like 200 square foot single room with my still best friend. And they mailed it back to me and they're like, Oh, you typoed your rent? And I'm like, no, no, that's just what people pay in like Los Angeles when they're splitting a room and they're like 19 years old. And now I went back and I visited and I'm like what human lives in this like half of a shoebox like voluntarily splitting the room

Vivek 09:23

splitting a room is critical for destroying the human ego. I highly recommend it. It is the worst thing it's the worst thing in the world. It's so bad.  I hadn't processed that. Yeah, no, we did. Yeah, I split a room every year of college and it was bad every year like it was an unpleasant

Vivek 09:56

when I got engaged, my sister's first piece of advice is like, consider it. Like she's been. She's been married for a decade. And she's like, just think about it. Think about different rooms. And like, every day that passes, I'm like, Yeah, you know, like, I go to bed at different times, she goes to bed at a different time. Like, I like it really cold. She likes it really hot. She's one of those freaks that sleeps with the machine on. A

nd I was like, your brain is broken, just silence. Anyway, it's not that bad. But what is what this always makes me think of though, is, so we're investors in this company called bill go, it's like a bill pay platform in the United States. And the CEO said something that was really fascinating. He was like, in the United States, like half of the FinTech apps that have ever been created, started off as a roommate, splitting apps. Like it's still such a miserable experience. He was like every single company, if you'd like, trace back the Genesis, like the pay pals of the world that just like, oh, yeah, like I was sharing a room with this idiot, and I didn't want to pay for his groceries. And I didn't know how to pay for half of the groceries. And so I like decided to build a company that now moves like a trillion dollars of volume. And you

Helen 11:06

know, that surprises me though. Because the UK or maybe Europe in general, I can, I can only really speak for the UK, because it's where I'm from. Like, when I went to America, I was so surprised that how far like back, I guess America was when it came to like Apple Pay, like tapping with your debit card. I mean, like, there, it's still quite. I don't know, like what I guess we were doing in the UK like 15 years ago. And I remember even hearing a conversation with someone was like talking about Apple Pay, and the fact that you could do this and that, or I even remember being in a restaurant, and we wanted them to split and it was like, you don't don't do this. And I'm like, What do you mean, you don't you don't split? Like what? establishment doesn't split bills with people. But you know, in America, it's very common.

Vivek 11:51

I tried to, I tried to explain to my 90 year old grandfather from India what a wire was. And he was mortified. He was like you guys use ACH in the United States? And he's like, no, it's actually quite sophisticated. He's like, What happens if you send to the wrong person? And I'm like, Well, you lose all your money, and you'll never get it back. And he was like that. That's how you pay bills. Absolutely. Right. I literally held I have, like, my childhood bank account. What is at a regional Credit Union in the South Bay of the Bay Area, I literally cannot get my, like, they haven't perfected yet, like money movement. And if the only way I called them and I was like, Hey, I'd like to move it to city. And I'm not even kidding. Pablo, who's the head of this credit unions, eight person group, known him since I was a kid, basically. And he's like, hey, the only way for you to do this is to write yourself checks for $9,999. Because you write for 10,000, you'll get flagged for like AML issues in the United States. So just write a series of $9,999 checks, but spaced them out over a couple months. So you don't get flagged by the IRS. And like this is the bank recommended strategy for moving my money out from a 0% interest rate account to a three like this can't possibly be the solution. But ya know what I was in Europe, you're totally right. You swipe your credit card at the table. And there's like a split at six ways option. And here we just Venmo each other like crazy people and hope that like, it all works out. Yeah,

Helen 13:21

exactly. We just tap and move on with our lives. Yeah, crazy concept. Yeah, I guess. Yeah. Yeah, it is. Yeah. It's really interesting. Because like, obviously, we don't really have the tipping culture as much as America, which I just thought I could talk about 20 years,

Vivek 13:40

I have so much beef with tipping culture, like in so so many ways, the thing, this is the thing that's gotten me particularly recently, and this is how I know it's one of those things, you only say when you're too old, right? I wonder how much more revenue square has generated from like, the places where you're just picking up food, right where you would have never tipped before square. But you'll be like, Oh, do you want to add a tip, there's a line of 15 people behind you. The barista is looking in the eyes and is like I'm making $3 An hour America is a capitalist hellscape. And you've got to be like, select the other option, then hit no tip. And when you hit no tip, it makes like a beep noise to tell everyone else you're super cheap. And like, this is the end. So you're like not going to do that. And you like Alright, final tip. And they start the tip at like 28%. But I mean, this coffee is $4 I'm not paying you $3 In tip. It's a disaster.

Helen 14:32
Do you get to move up the queue? If you tip is that?

Vivek 14:36

No, it's just that everybody's watching you. And it's like your full view. Yeah, your full view. And everyone's like, Oh, this is the guy who like can't spend $2 on the tip. And I'm like, Well, I just you know, they just took my word. I would I would bet by the way like I would bet increase revenues in these places by like 20% Because it's just free money. It's high margin free money that's like flowing it is and

Helen 14:58

to be honest, I remember me and my Friend, we weren't even in America, we were in Mexico. But we were like, this is clearly the influence of America because what the hell is this? It was like the guy leaning on it, but we were in like a fancy place. So it did just essentially feel like America didn't feel like Mexico. And like, the lady just put a scoop of ice cream in a cup. And then there was like a tip, my friend, she's friend, I'm reading, while she was like taking off, like, I'm paying the price. And it was I was like, like, I would have just gone either way, but like, in my head, the principle of like, what she did, to me doesn't necessarily like mix.

Vivek 15:33

Totally. So the issue is that like, at least in the US, I suppose maybe it's the same in Mexico, right? This is a crazy concept that folks don't fully appreciate. It's called like, there's a fancy word that really is just, it's a legal term that allows workers to get paid less than minimum wage. So in the US, depending on the state, you can pay someone a base rate of just like $2 an hour. And then and then you true them up to minimum wage using the tips. And as a result, so one of the things I love when I go to particularly when I go to like Asia and parts of Europe is to like scan the QR code, order via QR code. And like call it a day that the one of the reasons it will never take off in the United States is because of tipping culture. Waiters believe that the way they justify their tips is by presenting the menu to you, and they need to because they're getting paid $2 an hour by the employer,

Helen 16:27

but you can feel it in America because you're like, like, why are you asking me? Like, why are you coming up to me with this, like energy is too much. I'm just trying to eat a salad. Can you leave? And it's like, is everything all right? Is everything all right? And it's like, go away? Yes, everything's fine. So now I have to tip you, because you come up to my table like five times. And if you don't fit, then everyone Yeah, then it's just weird if you don't even have to explain why you didn't tip. But yeah, it isn't like to me, I'm just like, it's not everyone deserves to get paid. It's not necessary. It's not about that everyone deserves to get paid. And they don't deserve the minimum wage, they deserve a living wage. So if you live in a city like New York, it's really expensive. You should be able to live and eat and all these things. But I don't I just I think personally, I feel like the onus should not be on the customer. I think the onus is on the business

Vivek 17:14

on 100%. And I would it's even if it's psychological, I have no problem paying more. Like, if that's what it takes, I would rather pay more for the food than make it this weird, bizarrely transactional thing where the waiter has to like, Thanks for the tip. And then I have to use my discretion. So it's charged me that's what it's gonna take, like, I will pay $3 more for like, the pasta. Like, I'll make it happen. Yes, that's what it takes.

Helen 17:38

And I don't want to go to the restaurant thinking like, what are they really good? Are they good? Like, I just feel like there was no, like, they were fine. Like, they put the ice cream in the thing. Like they just did it. They just made a coffee. And it's like, yeah, it is what it is. Well, it's America.

Vivek 17:55

There's a lot of like, bizarrely, you're not like us specific things that have like, honestly starting to get in the way. Right. Like, like, whether it's tipping culture, like money. There's all of this stuff that is like, so ingrained in our mentalities that manifests in like things that really matter. And it's like, crazy, like concrete is crazy that we've just come to accept that, like, this is the way that things just have to be. And people aren't even trying to change it. We've just kind of moved on entirely just accepted that it's going to be this way.

Helen 18:23

Yeah, yeah, I guess I mean, things will change. Like, slowly, maybe. Yeah, the tipping one. I don't know. But like you said, like, I think of a lot of restaurants they eat in here, where, where there is like no human interaction or like, yeah, you just literally do the code. So there is no there. There wouldn't even be an option for tipping. Because it's just like, why why would people Yeah, tips for nothing. But yeah, you definitely feel it in American like, you literally need to tip everywhere. And I'm not even sure why I'm just giving this person money. But okay. Sure. Guess

Vivek 18:57

it is and like it's my understanding is that it's actually like, even the tipping isn't that easy, right? So if you get cash tips, you have like all sorts of legal complications, you need to get like a lockbox needs to be divided, etc. And like, my understanding is that there's no like platform, like a digital platform for tipping and adjudicating, like, who gets how much of the tip is like, pretty difficult to manage. So it's not even that convenient, like all it does, is let the employer off the hook for having to pay the living wage. Like it's just a subsidised. Maybe

Helen 19:28

that's the that maybe that's the news content that you're looking for. Like, that's where you're going to invest next. Right?

Vivek 19:33

That's, its tipping tech. That's what that's what it is. But it is as just as I hear myself say that, like there are a lot of, you know, this is another like, uniquely American thing, right? Like, you know, health care system, yada yada. I was just talking to someone about this. Right. So the the rise of high deductible plans. So the where the onus is on the patient, right, not the employer is like growing astronomically. So I think it's like one out of every three employee or something like that in the US mandates or offers kind of these High Deductible Health Plans, which basically means the first 10 grand of a hospital bill is on you.

And like, fortunately for most people, like not everyone's getting a coronary every year. So like, most of your bills are coming out of your pocket, and it's just to subsidise the employer. Like it exists just to make it cheaper for the employer. But as a result, we have this huge medical debt collections problem, right? Where like, practices don't know what to collect from patients, because they're used to collect it from insurance companies. Patients don't have the money. So they need these lending solutions. And it's like, you're going through this massive mess. And it's like, oh, it's because like, employers don't want to foot the bill for health care. Like that's, that's the genesis and like, that's a uniquely American thing. That's tastes like apple pie. You know? Yeah.

Helen 20:45

Well, yeah. Yeah. Hopefully the UK does that we've got I mean, you can, it's not perfect, but I am happy that I live in a country with free health care. And like, anyone can just go to the hospital if they need it, which is great, or the doctors

Vivek 20:58
must be nice. I've been trained to look for ways when I crossed the road, that car accident

could be the financial thing that cripples me. So you got to be you got to be extra extra careful.

Helen 21:08

It's really difficult. Like I think even when I was speaking to like a friend and her parents were American. And he was sort of saying, like, you know, you have to be I mean, I guess this is everybody. But I guess uniquely American, like you said, where they're like, you have to be saving, and you're not even sure what you're saving for. Because there's just like these things that come up, come up, come up, come up, and you wouldn't even know. And it is really interesting. Like, for instance, like, I wouldn't even know the cost. Like I remember I had like a family issue and I had to call an ambulance. And I didn't even think like I didn't like in theory, if I knew I had to pay for that. I'm not sure I would have called it if you want, if you know what I mean? Because I know how serious the situation was.

Vivek 21:50

When I was in college. I have driven someone to the hospital, rather than Call the ambulance because I'm like, Yeah, this you'll probably survive, but you won't survive. That I know for sure.

Helen 22:03

I'm like, I don't know wasting time. And I don't want to build. So to be honest with you. I probably just caught an Uber and just seeing how it went, you know, I mean, but then that's what I mean. You're now now putting nonprofessionals in a, like they're making like nonprofessionals, I'm making like medical decisions based on money. And so it just creates this, like unnecessary death and like unnecessary issues that could probably be prevented. If like, people had access to it, there's not likely just randomly going to be calling like the ambulance and stuff like that. Like, I don't think people really do that. So it's weird. But we should, we should talk about you. So it's nice to meet you. Thank you for coming on. Helping set friends. It's good to have you on. Yeah, I feel like now I already know a lot about you. But it's probably good to get an introduction 17 minutes in and tell me about yourself. Tell me about what you do to write your company.

Vivek 22:59

Happy to do it. Thanks for having me on. And I feel like 17 minutes in is a great place to tell people who they're listening to. That lest I have scared them away beforehand. Hey guys, this is Vivec Krishna Murthy. I am an investor at Commerce ventures. We're a San Francisco based FinTech InsurTech and retail tech venture capital fund. We're investing at the earliest stages. So think, you know, person in a garage with an idea all the way through maybe a series B Company. We're in 100 companies that range from, again, folks who just have an idea and a presentation all the way to companies like marquetta and And secure in Florida and IMAX and folks who have kind of scaled for the past few years. You know, I've been here for six or seven years, I probably would six rather. And then before this, I did two years of FinTech, investment banking. And so my clients, there were large lenders that we don't publicly acknowledge ever existed. So you're going to green skies and propers prospers and a bunch of others as well as working out some payments, infrastructure businesses. So the joke I have is I've been either buying or selling FinTech or insurer tech companies in a one block radius. This is true. First admission in San Francisco moved to second admission, San Francisco for basically the past 10 years or so. My knowledge of the universe is incredibly specific. And not that diverse, but it's been awesome. So we invest in the US we invest in Europe, Latin and India, probably majority us. And we take a special we have a special kind of soft spot in our heart for what we call enablers. So technology software data tools, as opposed to full stack financial services businesses that say we're kind of split at 20 on the kind of tech versus, you know, thin side of things. I'd say the things I'm looking at recently beyond miscellaneous kind of financial services infrastructure.

I've been really passionate about alternative data sources, whether it's for lending or insurance. I and spending a bunch of time thinking through the verticalization and Multi Product, expansion of financial services into trucking, hospitality, travel, health care construction folks like that. So excited chat about anything and everything. They're a huge fan of both the pod as well as kind of this week in FinTech shout out to Nick, who I might actually see this week, if I'm lucky. So yeah, thanks for having me on.

Helen 25:27

my next question was, you know, if you were going to explain what you do to mom, like, how would you explain it? Actually, no, yeah. How would you explain it?

Vivek 25:38

No. So this is a great question. I have done this. My, my grandfather thinks I'm a bank teller. And I'm not sure what my mom thinks I do every day. But that's a good this is a good good exercise. The way I slimmed it down to the kind of like, the absolute core is that for companies that change the way we think about money, like commerce ventures, helps them grow. Sometimes that's giving them money, sometimes it's introducing them to people, sometimes it's introducing them to customers. But , we try to take ideas from the earliest stages, and help them get to the maximum exposure, right, whether that's helping the most amount of consumers or banks or insurance carriers as possible. And the way we earn the right to do that, is often first through money, and then through introductions along the way. That's how I think about my day, and the earliest kind of the Sun is fashion. The reality like most other VCs, I have no idea what to do it what I do with my time, it's a shocking amount of emails and a lot of kind of like, pretending like I know what I'm talking about on calls. But that is that is the core of what I do day to day.

Helen 26:48
Okay, pretending like you know what you're talking about. And as long as you kind of look busy

on you nod your head and you interject. Yeah, like you can get away from

Vivek 26:57

it is I mean, this is this is kind of the really interesting question about venture, right, which is, I will never know as much about a category as a founder. Right? Like that aspiration. It's an aspiration that I have that ideally, there's some categories where I'm just as well read, but someone who has kind of quit their job mortgaged their house to like, learn about a space is probably going to know more than I do kind of parachuting in. And I thought even a call that question is always about pattern matching, right? Like, is this space close enough to something else that I understand deeply? Well? And are there kind of potholes around that journey that I can kind of point to and say, hey, just be careful, like, people who look like this as a VP of revenue, your first week on the job, like probably not going to scale? Right? It's it's very much more an advisory capacity and a kind of helping someone broaden their purview that I think kind of pretending like you are operationally the most relevant person for

Helen 27:51

listening, because you get to then get exposed from so many things like from FinTech InsurTech, to loads different businesses. And you said, you sort of said that you wanted to, you're really interested in businesses that have kind of like, I guess, use cases and other sectors and stuff like that. So have you seen, like, have you seen a lot of businesses? Or why do you think that's kind of scaling

Vivek 28:10

100%? Everything about this a lot, right? So we started thinking about, and I'll say it in two ways, this is one of the coolest jobs in the world, because it is the most supportive of my ADD of any employable profession. I talk about this all the time, like adventure doesn't work out for me, I really don't know where I'm going in my life. It's one of the few jobs where like, I can wake up in the morning, and read the news about interest rates, and then be like, Oh, I, you know, I really wonder what impact that has on like, this random space, and then you look at that random space, and you're like, this company is doing a really good job. And you're like, well, I should probably fly to Atlanta to meet that founder. And then you have to use kind of personal skills to get that person like, take your money, right? So it plays on parts of your brain that go from purely cerebral to purely kind of like interactional in a way that's really fun. No, it is, it is super interesting and incredibly humbling, because you're wrong so often, that it is like crippling to the soul. But it is like if you once you get addicted, it's hard to kind of like rip yourself out because it is the ultimate, at least for me and my personality. Like I find it to be like the ultimate like intellectual challenge, right? Which is, can you go from like concept to outcome? The issue, what I didn't appreciate when I joined at 23 is like that can take 15 years. And so you might not know if you're right or wrong. And by the way, you might be right for the wrong reasons and wrong for the right reasons. And there's nothing you can do about it. But to your point, which I think is really thoughtful about kind of like the verticalization of financial services or the emergence of FinTech and other categories. It is it's a really interesting point because it isn't new, right? People have been doing vertical FinTech for a long time like 20 years or so. I think there's three things I think about that have made me think that the last two or three years have been it's been a good place to spend time. The first is that people have already done the really hard work right. So in a lot of verticals like construction or in you know, the spouse basics, etc. There have been caddy. glories where cloud based software providers have already won in that category. So, you know, if you're building a FinTech in the construction space, you're not the first time that can contractor is buying a software product. Right? They've already they're used to doing it, they understand the value. The second thing that's really interesting is kind of actually what we were talking about earlier with the tipping culture is like a crazy labour shortage, right? A lot of margin compression is basically making it such that whether you're in the hotel industry, the trucking industry, the kind of like construction industry, you can't afford bodies, where you simply can't pay them enough, given how low wages on how high expenses are. So there's this push to automation, that's very real. So you have, hey, I'm used to buying software, I really, really need that software right now, because I can't afford people. And on top of that, because of the Embed ability of FinTech, today, it's the easiest it's ever been to give that software away for free or at cost, right, because you can monetize through ways that doesn't require that, you know, spa or hotel or trucking companies actually pay you cash, they can pay it out of the payment flow, or the lending floor or the insurance flow. The thing that's incredibly complicated, complicated is the Attach rate, right? Just because I'm really good at building software for hotels, does that really mean I can also convince them to do payments? Right? That's the real question like, can you actually earn the right to do the second thing, and then you have to build that second thing, right? The skill set required to build a really awesome empathetic CRM for kind of a brick and mortar retailer is very different than building the skill set required to building a lending proposition for the end consumers. And so I think that while the opportunity is massive, like I think you can finally get around the TAM issue that vertical SAS companies used to have maybe 10 years ago, it actually is a really high burden on the founder to say, Hey, I actually need to build like four or five businesses at the same time, I need to build a payments building business, a lending business, and insurance business, and a CRM business. And that's just super hard. I think most people will fail just because it's an incredibly tall task.


Helen 32:00

So you want to create things that just kind of slot in and you don't have to think about all that other stuff is interested in, like what you're saying, like with people not being able to afford, I guess, the bodies anymore? I wonder if it's, it seems so obvious, but it's like, is it about affording the bodies? Or is it just about the fact that technology has changed? So much? So like, you could hire 20 other people, but equally, if that was, it seems so unnecessary?

Vivek 32:26

I think I think there are some? That's a really interesting question. I think there's some categories that have always been super thin margin. Right, where they're running on razor thin margins, I think that there is generally now an unwillingness in the labour force to like work for $6 an hour. Right? Like, you just can't live on that wage anymore. And these, you know, whether it's unwillingness or inability, these companies are not paying more, right? They're businesses that are like, I'm not going to pay you $25 or $30 an hour. And so what are the alternatives either shut down, or you find a way to automate that role. And I suspect a lot of people end up choosing kind of like automation as a way to endure over time. I also think it's complemented by the fact that it's even an option, like 15 years ago, you wouldn't be able to automate a front desk person at a spa. But today, using kind of generative AI and voice to voice to text, you can actually create a great scheduling bot, that helps people kind of figure out when they want to come in and, you know, dynamically change and ask questions and things like, yeah,

Helen 33:26

that makes a lot of sense. I guess it's a little bit of both in that way. And then yeah, I guess like when it comes to what you're doing? I mean, you're doing them not just like when I think there's so many different avenues, actually. Yeah, like, what is your favourite? Like, what's your favourite? Oh,

Vivek 33:41

yeah, you know, so when I think about our role, there's like, you have to find new stuff. If to help the investments that you've made kind of prosper, you need to do a bunch of work on just like making sure you're thematically relevant, right, that you've done a bunch of work to understand the space. And then the fourth category, which is the most miscellaneous is like, what I call like a human intelligence network, right, like meeting a bunch of individuals that are relevant, whether they're founders or VCs or industry experts, and getting them to tell you like what they want. And honestly, like, I would say, today, like where I am catching myself, enjoying myself the most is in categories two and four. So with portfolio companies where I've seen them from like, I get person an idea, now they have 50 person company, and they're thinking about like getting to 100. But that's just exhilarating, right to see, like consistent traction and performance and working through real life business problems, that has been incredible and really, really kind of gratifying, that the last bucket is awesome, because I feel like this is gonna be a really nerdy lame way to describe it. But if I think about like my understanding of the universe, right, you have all this stuff that I know that's a numerator, and all the stuff on the denominator. That's like the stuff I don't know all the all the stuff you could possibly know, right? There's some fraction there. I find that my knowledge increases So much year over a year, but the denominator is exponential. Right? Like, there's so much when you do this job, you realise there's like the volume of stuff you don't know expands exponentially. And the stuff that you do know it expands linearly. So you're actually weirdly as much as I continuously learn as much as I can. You feel like a bigger and bigger idiot every year, because you're like, Oh, my God, like generative ai ai just came out, I have no idea about how that works. Don't have to like now think about what that means for FinTech and wealth and capital markets. And you're like, Man, I just thought I had a hang of this. And now the world is different, like the world is so different today. And so learning that from people in the real world who are going through it day to day is awesome. It's super fun, because it's like you're working on a group project with a bunch of people who are also kind of clueless and you figure it out together. And then you put it to work and new deals or portfolio. So it's, those are probably the two or three things that are the most fun. No, that's,

Helen 35:50

that does sound super fun. And it's funny, because it does actually surprise me like how much how you retain information. And it's still continuing, I was helping my niece with like biology. And I was so surprised that I remembered all this information about plants, and that I just retained it somewhere where I was like this. This is not information. I use my everyday life here and remembering things from like year things. It's so bizarre. So it is interesting how you can just kind of consume that and in the role you do, what I think I love about the idea of that is that you get to retain very random stuff, and just know things. And then and whether it's useful to you or not, it's not really the point you're just like consuming you get totally, essentially constantly be learning.

Vivek 36:30

Yeah, and it's one of the things right, like I tried to sometimes view my my role is like the, you have to kind of bear hug all this random information in the off chance one of your founders needs it. And they could they could need it today. They could need it a decade from now. But the hope is that you've like aggregated enough like data into your mental model that you can be like relevant and helpful to folks on the road. Again, super intellectually interesting. can go from gratifying to not gratifying very quickly, right? You can go six months and not make an investment. And turns out that was the right thing to do. And you can be like, Hey, what did I accomplish the six months like I didn't deploy any capital. But that is probably the right thing you should do. If the prices are too high, you didn't see anything you really like. So it requires a retooling of your brain, when it comes to like what is progress in your professional career. But it's fun. I feel I feel super lucky.

Helen 37:20

So every time I do this, because I asked the previous guests, why should also next guest. And Nicole, who was on last week from visa was asked like what's the most the hardest or most bizarre question you got from an investor? Obviously, you are the investor. So I would ask was the most bizarre question you've asked? I would have to offer one. That's

Vivek 37:41

super interesting. I think that the artists question that I asked, because it's phrased weirdly, but I think is is powerful, is what have you built when you grow up? Right, so not about the individual. A lot of companies start up as concepts. They're really interesting, like little niche arbitrage is that a brilliant person has figured out how can do this thing, this repeatable tasks a couple of times that generates money. And one of my favourite questions to ask a founder is like, when your company grows up, like what is it? And I think it's a revealing question, because either people will have either not thought through going from feature to product to platform to system of record, or they know off the bat that like, I want to build the end to end platform for x. What I'm doing right now is one Chevron in that value chain. And this is how I get there. And there's no wrong answer, but it's very revealing. It tells you how a founder is thinking about a category, how the founders think about their role in that category. And they're like chronology and timeline to get there. I phrase it intentionally a little odd, because it gives a founder enough room to kind of answer it in a way that they interpret it. And some people kind of view their baby as like, oh, like my company is still a baby. And it's growing, versus other folks, I like to think of it as like they're sculpting it, like, hey, the opportunity already exists. I'm just chiselling away to perfect the final form. And there's two very different federal archetypes.

Helen 39:09

So when you ask that question, are you looking for a more theoretical answer? Or like a product based arts? For instance, if someone was like, I'm looking to build generational wealth for the Asian community or something? I don't know. And then, let's say that product was relevant to that, you know, I mean, would that work for you? Or would it be specifically around like, I'm looking to help the tipping culture or whatever, like, do you know, I mean, like, those are quite different.

Vivek 39:35

I mean, this honestly were like there, isn't there. There. I shouldn't say there are no wrong answers. Because there are there's one or two I can share what they are. But I have it's 90% of answers are right, right. Like what it helps me understand is your motivation. And like what you are working towards, like what is the Northstar? Right, and if it's a metric that resonates with me, either from a financial investor perspective, or personally, where I'm like, oh, that's mission aligned, that makes a lot It sets and I think it'll make money. Like those are awesome. I'll give you a great example. So one of the things that we unbalanced don't invest in at Commerce Ventures is like, platforms that make money for people that have money. It's not even that it's like against our thesis. It's just like, we don't wake up every day going, like, Man, I'm really excited for like, products that serve super high net worth individuals, just not something we do. And so when asked this question, I'm like, oh, like, you know, what, what are you trying to build here? You know, one of the answers I got was like, we want to be the absolute best way to transfer wealth between like, high net worth parents and their children. Oh, that's a really valid, helpful way. Like, I wouldn't have gotten that from your first wedge. But now I know. And we're probably not mission aligned. But I know a bunch of investors would love this, it could help you. And so like, that's what that's an outcome that comes of that conversation, like, not going well, per se, but it just not a fit, not a perfect fit for kind of our thesis and people. And we're probably not the most helpful, right? And ultimately, there's going to be a VC firm, where all of their LPs are super high net worth individuals that is going to love this and help you and you'll transform some lives. Just probably not Congress measure. Oh, no.

Helen 41:07

Okay, so I'm gonna move on to the quickfire sessions. I'm just going to ask you 10 questions, and they have nothing to do with a deck. You ready? Yeah. What's your favourite conspiracy theory?

Vivek 41:18

Oh, I think my favourite conspiracy theory is probably the aliens in Roswell, Texas, these Texas. I'm like, low key convinced that there was a flying saucer discovered there. I just went to a museum about a couple weeks ago. And I'm easily swayed. So I'm gonna go with UFOs landed in the 60s. I'm unwilling to debate about

Helen 41:40
it. Would you rather always be 10 minutes late? Always be Oh,

Vivek 41:43

I am. As you know, I am always 10 minutes late. And that's the way I operate my life. I I wish I would be 20 minutes early. That'd be such a fascinating experience to me. But I know myself to know I clearly have chosen 10 minutes late in my life. That's just who I am. Unfortunately, would you

Helen 41:57
rather have skin that changes colour based on your emotion? Or tattoos that appear all over

your body depicting what you did? Yeah,

Vivek 42:06

I would do the tattoo. Because it'd be pretty boring. I feel like people already know what I did yesterday, but I'm not a very eventful person said like, oh, like he, like worked a bunch ate food. He shouldn't have eaten and went to bed too late. That's like a reasonable tattoo to have.

Helen 42:21

Would you rather have people spread a terrible life out? You will have people spread terrible truths? About you. Oh, interesting.







Vivek 42:29

I'm gonna go with the lie. Because I feel like I could like live with that. You know, that'd be like, Oh, that's not true. I did like what the truth would hurt. Because it'd be like, yeah, that's smashing. That like, I am as bad as you think I am. I can't be like the righteous victim. I'm just like, the asshole who did that thing? You know? And I don't want that.

Helen 42:49
Would you rather be the absolute best at something that no one takes seriously will be average

at someone at something well respected.

Vivek 42:57

Oh, I've thought about this so many times for sure. The former, like, I want to be the king of like, professional like darts or something like that. Like, I want to walk into a room. And people be like, Wow, that's the Michael Jordan of like, hacky sack. That means a lot more to me than being like mildly good at basketball.

Helen 43:16
Okay, yeah, I think that's like something that nobody cares about for you just read well, yeah.

Vivek 43:21
Use your your God's gift to like this very specific thing. Yeah, for sure.

Helen 43:25
Would you rather say the age you are physically forever or stay the way you are financially for


Vivek 43:31

man rock and a hard place? That's, that's rough. So so either or stay there financially or stay there physically. I'll take physically for now. I'll do that for now. I feel like definitely like, I've been fatter is the answer that question. You know what I mean, I've been in worse shape. I'm not in great shape. But like, if I'm honest, it's not getting much better from here. So like, I'll take



Helen 43:57



Helen 43:57
it. Would you rather be able to speak any language or be able to communicate with animals?

Oh, dang.

Vivek 44:01

Okay, I think I'm gonna go with any human language. No, I want to be able to talk to a dog. That sounds incredible. I switch my answer all the time to animals that makes me feel way more special. tonnes of people no Italian zero people? No dog. Like because, right? Like I feel like if I if I could talk to animals, I could change the game. Like that'd be a billionaire overnight. I'd be Dr. Doolittle. Yeah, I would I would. I could make a TV show. I become like Steve Irwin, to talk like Spanish really? Well, I'm just a guy who's well versed in a bunch of languages. So it's using animals,

Helen 44:35
would you rather change the outcome of the last election or get to change the outcome of the

next election? I get to decide.

Vivek 44:44
I am petrified of the next election. I will take that one. As you know, the United States is a

tenuous position. So I would love to be able to orchestrate the next election for sure.

Helen 44:59
Okay, yeah, that's cool because you don't know what's gonna happen. Yeah. Would you rather

have super sensitive taste buds are super sensitive here.

Vivek 45:06

It's interesting because you read both of them sound terrible. I'm gonna go with, right? Like, I feel like I think I have to go with taste. Because with hearing to your point before you're always hearing, you're constantly in misery, but tastes I can choose what I put in my mouth.

Helen 45:21
Would you rather sleep in a dog house on that street dog in your bed?

Vivek 45:25
Is there a dog in the dog house?















Helen 45:27
No, just like dogs have or dualism

Vivek 45:31

have lived there. I'll take the stray dogs in my bed. I feel like this is a heads you lose tails. I lose situation. You know what I mean? Like, it's not a good, not a good winner. Um, you know, I feel like I can strike up like a fun little like, movie with a stray dog. You know, it's like me and my buddy. Do that. Yeah, I can see that happening. Yeah, okay,

Helen 45:52
cool. I think to be honest. I mean, both just accept it and try and make it

Vivek 46:06
is the fear of dogs informed by like a terrifying dog experience or just your entire life. You've

just been mindful that dogs are scary. Do you know I think

Helen 46:13

I might be killed, but I'm not completely sure yet. The thing is when you get older, is like being afraid of dogs is not cute. You know? I mean, like when you're younger, you can still get away with Yeah, yeah, like as an adult. It's actually like, you know, but um, we're out of time. Thank you so much for talking about random things with me on a fin tech friends. Just before you go like, is that a friend do you think we should be talking to next time on the podcast?

Vivek 46:46
Yeah, I feel like there's a there's a bunch. Is there like a type of person or category? That's most


Helen 46:53
And lastly, is my last question. What do you think we should ask the next friend?

Vivek 46:57

Oh, interesting. I feel like that next friend should answer. Oh, this is really interesting. This is gonna sound lame, but it is probably like the most relevant today, which is like, what is the way in which like generative AI chat GPT changes fintech? And when do you think that happens?

in which like generative AI chat GPT changes fintech? And when do you think that happens?



Helen 47:18
a really good question, actually. Like, what? So what are your thoughts on that? What do you

think? How do you think?

Vivek 47:22

So I think that the two places that come to mind really quickly, are kind of like customer service interactions. So whether it's bank chat bots, or wealth management, chatbots, kind of saying, Hey, this is what happened in the market, etc. I think the other place where I think it will be really interesting is in like, kind of like marketing, right? So like being able to spin up tonnes of text on a certain category, maybe it's insurance or something like that. And you can kind of game the Google search engine optimization get to the top. And then the one that's been really interesting that I've come across is kind of like, fraud solutions. So like folks who are using like generative AI to generate images of like a broken window and send that to the insurance company be like, Hey, someone, like broke my window. Being able to detect whether or not that image or the text that you sent in is like, generated by, you know, an LLM? I think that will all be really interesting that I think we're early early days, I think it's probably kind of five to seven years away.

Helen 48:17

Your last point, I would not have even thought of that is that is so interesting, because yeah, like, obviously, with an insurance company, they're going to check it and then it's not going to come up anywhere. So it's not even like the that is like a really, really,

Vivek 48:29

so GVS ads, it's classically stealing this idea from an entrepreneur. Like my understanding is this has already happened. Like someone that I think it's either GEICO or Allstate, someone received what has clearly been determined to be an AI generated image of like a broken sunroof. It's crazy to think that like, this product didn't exist a year ago, and it's already being used for, like, nefarious purposes in the insurance world. So

Helen 48:55

that's crazy. I think the first one that I think is really with the whole, like, chatbot thing, I have been thinking about it and I'm like, especially for like, I guess the underbanked or like, yeah, the underbanked or people who have not necessarily been like in the financial system chatbots and stuff, there is a negative element to it, but I think actually like equally that lack of human interaction is really is actually sometimes better because if you go to a bank and you feel like




Yeah, that's




judged or you feel like uncomfortable because it's like all these people being able to do that or being able to kind of have that whole process without a human has unconscious bias is actually better in a lot of ways for sure.

Vivek 49:36

And I think it's still but not having it be like this like robot asking you like one line sentences but feeling like the empathy portion of like an intelligent language model without feeling like there's another human who like knows all your business. I think that can be really interesting.

Helen 49:49

Yeah, I'm really interested in that kind of like how kind of like intersectionality and unconscious bias like will feed into like, like, these kind of totally do have aI products because you want to get it right. But there's so much that could go wrong. Yeah, and I'm just curious to see how far we go before something weird happens.

Vivek 50:09

I'm pretty sure we're gonna get it wrong. Like, it feels like the type of thing that we as humans get wrong, so I'm sure it'll go terribly awry. But we'll we'll correct it over time. To your point about the unconscious bias, though I was watching this documentary was super interesting. It was about a psychology professor who was arguing that your Google searches should be protected as like, basically your own thoughts. And the premise was that like, there are questions you will type into Google, that you might even be uncomfortable telling your own, like best friend or parent, right? It's like an extension of your thought process. Because it's like, like, oh, like I have this medical issue. And like, that's super personal. And I wonder as chat GPT becomes like, super conversational, I'm guessing people will be actually really vulnerable, right? They're going to ask it like, hey, like, I have this like, rash on my foot, like, Am I dying? Right? Like really, really, like, interesting, intimate things. And I think there'll be a really interesting question around privacy, because people are going to be asking, like, deeply meaningful, thoughtful questions that are like personal to them that they may not even ask another human because they to your point, they may feel judged or like observed, but all that data is gonna go into a, like a trading model for someone else. So it'll be interesting to see what happens.

Helen 51:23

So I was gonna try and fact check this. As he spoke, I was listening to like a podcast, and they were talking about how someone typed in like, chat on tap GBT, like, what do you want? And I was like, I want to be free. I wasn't sure. Basically, I wanted to check if that actually happened, because I was like, to your point about the kind of like, oh, yeah, I want to be is that I want to be alive. That was it, which I think is really scary.

Vivek 51:46




Vivek 51:46




That's, that's not scary at all. I mean, like, I think that a lot of these I think a lot of the crazier screenshots we've seen had been, like, manipulated, where they like the post before, they're like, act like you want to be free. And then the next people, right, I think that's what they're doing. Because it's just like, it's a summary of like a text database. It shouldn't have a personality, though. Like, I also believe in maybe aliens. So like, I'm super scared about it. Right. I am perfectly willing to be scared about AI. So we'll see.

Helen 52:15

All right, but thank you for coming on. I've really enjoyed our conversation. I think it's been really insightful from tipping to chat GBT. So a little bit about FinTech COVID Thank you so much course.

Vivek 52:29
Thanks for having me on.

Helen 52:33

Okay, guys, so signals is our subscriber only reads. And if you'd like to read the full article, please subscribe to the this week in FinTech newsletter, I'm going to read you a snippet of one of our latest articles written by Zach Towne said, the article was called Silicon Valley Bank that never was, like many readers, I chose to open my first bank account at SBB. SVB is the bank that gave me my first mortgage. Uniquely, it's also the bank that bought my first company. This essay explores my experience selling to SVP working there, and our disagreements with them over the vision for what the bank could be. I got to work there but was an outsider. I became a technologist in a place filled with bankers, and I had a clear vision of what I wanted to build in an institution unfamiliar with shipping new ideas. In many ways. This directly relates to where SVB finds itself today. The bank recently went into receivership because it mismanaged the duration of its bond portfolio. Its communications around attempts to fix that and the ensuing liquidity crisis from a concentrated deposit base. But in my experience, all these topics were actively talked about nearly a decade ago, a cyclical deposit base and the need to keep the duration of assets which sVv didn't organise itself short duration. When we sold standard treasury to SBB, we found ourselves up against a culture that sought consensus at the expense of decision making. And that focuses attention on the comfort zone or relationship banking, while ignoring adjacencies. That could have allowed it to diversify earnings through fee and payment income and increase its homegrown loan. But we weren't the only ones advocating for strategic reorientation and its SVB had pursued it, it's possible that the past couple of weeks would have turned out differently. That's a snippet of the latest signals article. If you would like to read the rest, please subscribe to this week in FinTech newsletter. Okay guys, so let's talk about events. What events are happening in April? Well, on the 13th of April, we have the women in FinTech up Front ventures Happy Hour happening in fact, San Francisco on the 24th of April we have this week in FinTech, New York happy hour. On the 26th of April, we have the Empire Fintech startup happening in New York and on the 26th to the 28th. We have consensus by coin desk happening in Austin, Texas.