S5E22 硅谷徐老师｜资本涌入金融科技SaaS领域，历史上最大转型浪潮来了？
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本 节目 由 生动活泼 制作 播出。 Hello, 大家好， 我是 丁 酱， 欢迎 收听 全 新一集 next 科技 早知道。 这 一期 是 浩 毅 主持 的 SARS 专栏。 这 一期 浩 毅 和 fin V C 的 创始 合伙人 logan Allen 聊 了 聊 最近 的 fin tag， 也就是 金融 科技 的 市场。 这 一期 是 英文 节目， 按照 惯例 我会 在 节目 开始 之前 给 大家 用 中文 做 一下 本期 节目 的 关键 观点 的 梳理。 因为 是 远程 录制， 所以 这一次 的 音质 不是 非常 的 好， 建议 大家 不要 戴 耳机 收听。 另外 生动活泼 正在 招聘 不同 的 内容 以及 商务 的 岗位。 如果 有 兴趣 的话 可以 查看 我们的 show no， 或者 是在 我们 生动活泼 的 公众 号 下面 回复 暗号 入场券， 来 查看 详细 的 岗位 以及 信息。

好了， 下面 就是 我们的 正式 节目。 根据 cbn 赛 发表 的 2021年 的 第二季度 的 报告， 金融 科技 公司 在 全球 募资 总数 上 达到 到了 22% 这样的 一个 高 的 数字， 也就是说 每 5美元 就有 一美元 进入 了 金融 科技 的 领域。 在 第二季度 达到 了 330亿美元， 同比增长 为 191%个 percent。 在 金融 科技领域 独占鳌头 的 就是 土 币 向 的 企业。 这 期 和 哈维 一起 聊 这个 话题 的 就是 嘉宾 logan Allen。 Logan 是 fin V C 的 创始 合伙人， fin V C 专门 投资 全球 范围内 的 B2B项企业 s as 服务项 的金 融 科 技公 司。 Urban 有着 二十多年 的 金融 从业 的 经验。 在 创建 B V C 之前， 他是 今年 6月份 刚刚 上市 的 S O F I 的 前 战略投资 副总裁， 投资 并且 孵化 不同 的 金融 科技 公司。

Sofa 这个 公司 可能 很多 大家 不是 很 熟悉。 Sofa 是 2011年 成立， 最初 由 四名 斯坦福 的 N B A 学生 建立， 瞄准 美国 名校 学生 贷款 的 市场 放贷。 接待 人 必须 是 毕业于 美国 排名 前 200的学校。 这个 目标 客户 被 他们 称为 叫做 henri， 就是 high earners， not rich, 也 即 收入 较高 但 还没有 富裕 起来 的 人群。 最早 他们的 业务 包括 学生 贷款， 后期 扩展 到 抵押贷款、 房贷、 个人 贷、 信用卡、 股票投资， 甚至 是 数字 货币 交易 和 银行 服务 等等。 另外一个 有趣 的 点 是 sofa 也是 人人 公司 C E O 陈一舟 投资 最 成功 的 海外 项目 之一。

一开始 l organ 介绍 了 美国 金融 科技 公司 的 发展 历史， 包括 几家 标志性 的 提高 传统 金融 银行 行业 效率 的 公司， 像是 配套 mint 等等。 然后 后面 又 聊到 了 像是 最近 很 火 的 sas 软件 独角兽 stripe 的 崛起。 虽然 很多 投资人 因为 这个 领域 的 严格 政策 监管 而 对 金融 科技 望而却步。 但是 如果不是 直接 对 C 端 或者 是对 企业 端 提供 金融服务 的 公司， 只是 提供 工具 或者 是 技术 的 saa s 金融 科技 公司 在 最近 是 特别 吃香 的， 因为 他们 只是 需要 提供 中间 的 技术支持， 并不需要 被 过多 的 监管。

也 是因为 有了 这样的 一个 底层 思考， logan 也 分享 了 自己的 投资 的 领域 和 一些 市场 的 方向， 我 觉得 大体 可以 总结 为 下面 几点， 第一， 它 会 根据 二级 市场 的 动向 来 选择 投资 的 标的。 因为 有 像是 老虎 基金 这样的 大型 基金 不断 在 一级市场 上 出手， 很多 的 金融 科技 公司 在 一级市场 上 拿了 太多 的 投资， 以至于 估值 太 高等 原因， 在 二级 市场上 的 表现 不是 很好， 并 不受欢迎。 那 数据 显示， 老虎 全球基金 在 第二季度 整体 投资 了 81个 项目， 还 不包括 原有 的 复 投 的 项目。 老虎 平均 一天 平均 投资 1.3个 项目。

其次 就是 不管 是 早期 还是 晚期 的 项目， 资本市场 对 更多 的 技术 驱动 的 B2B的项目 更 加感 兴趣。 首先 这样的 公司 有 更高 的 毛利， 二级 市场 的 投资人 追求 60%到80% 的 毛利率。 如果 像是 借贷 的 领域 只有 百分之三四十， 就 不会 对 投资人 有 那么 大 的信 例 了。 其次 sas 金融 科技 公司 有 更加 稳定 的 订阅 经常性 收入， 而 不是 像 sofa 或者 是 老牌 借贷 公司 landing club 这种 接待 服务。 因为 贷款 是一种 叫做 do over business， 每年 都 需要 重新 计算， 非常 难 预测。

第 3 logan 聊到 了 在 区块 链 的 领域。 Logan 虽然 说 自己 从 10年 就 开始 投资 购买 比特币， 但 他 并不是 很 相信 比特币 作为 交易 的 市场 价值。 他 更加 看重 的 是 区块 链 驱动 的 提升 效率 的 各个 技术 领域。 那 比如说 是 他 投资 的 公司 figure， 虽然 说 也是 在 借贷 的 服务 领域， 但是 他们的 侧重点 是用 区块 链 和 智能 合约， 把 传统 银行 在 过去 需要 120天， 需要 经过 数个 中间商 服务 才能 完成 的 流程 大幅度 缩短。 他 觉得 机会 也 同样 在 物流 供应链 金融 代替 传统 的 资产管理 的 领域 里面。 最后 他 还 提到 了 数字 货币 的 全球 市场。 他说 中国 在 区块 链 领域， 在 知识产权 上面 的 申请 数量 是 走 在 很 前面 的那 虽然 国家 在 大力推广 数字 人民币， 但是 从 外部 看来， 我们的 政策 还 不是 很 明确。 数字 货币 对于 很多 像是 委内瑞拉 这样 没有 稳定 法定 货币 的 国家 来说， 比特币 这样的 数字 货币 反而 获得 了 更多 的 信任。 好的， 那 我 就 粗略 的 给 大家 总结 到 这里， 更加 多 的 细节 和 准确 的 内容， 请 大家 后面 收听 how I 和 l organ 的 英文 采访。

Hey, logan, thank you very much for coming to my show. So I actually have a ongoing SaaS conversation with the industry experts and people typically do not necessarily link fin tech with SARS, but I know that you are the expert in the in tech and sets. So I thought I wanted to have a chat with you, give the audience a exposure on, you know there's a pretty good linkage.

You know think tech is not just about p two p is not just only about uh, big coin stuff, right? There's a lot of the enterprise software play. So that's why I want to invite you here. So before we start up, I start with my own question. Do you want to give a quick intro of yourself first?

All right. Yeah, thanks again for having me. I'm log Allen, managing partner of invention capital based here in servants ago.

We have an office in new york as well in opening of an office in london in q one. We exclusively, as you pointed out, invest in B2B sas fin tag. It's is really interesting part of the vent diagram.

You've got a number of investors out there investing in consumer fin tax, S M B fin tax, and we call those the first two waves of fin. We're really investing in this third wave of impact, which we think about is enterprise software is supporting in combat organizations like banks supporting legacy fin tax, new fin tax and sure tax. Protest players.

Acta, my favorite start to sum up why we do what we do is that the financial services industry spends a trillion dollars per year on technology, and yet less than ten percent of their data is in the cloud. So there are number one in the world in spend and their dead last in cloud adoption tion. And the fastest growth area from A N perspective is third parties software.

And you can guess that's a function of lowering their cost space and really trying to move as much of their capabilities, data functionality, acta into the cloud. That's why we invest in the space. Uh, we invest exclusively in the U S, U, K. Europe, but certainly are looking to add additional geography over time.

Thanks for the intro. Look, you know the as you mentioned, the right, you know when turning dollars spend only ten percent of that on on the cloud. It's not necessarily true that if you are not on the cloud, uh, you are toast.

But on the other hand, the percentage or or the cloud penetration is a measure that how to uh, your business is so so I really like the states. So before we go to deep, let's actually zoom out a little bit, right? You mention about your own investment.

This is about different phases, right, of the things that this is the third stage. I remember you told me before that the way you look at a fin tech, you know, from historical point of view, right, there is a long history. Maybe you can just give us a little bit more historical perspective in more details. First, in particularly, you mention about recent evolution about decoupling and then the coupling. Can you give more more insights about this topic to our audience?

sure. So if you look at the history of vintage, could actually dates back to eighteen and seventy one in the U. S. With western union, when the first money transfer service came to be right, moving money.

So eighteen, seventy one, very first thing.

tech eight.

to know that.

Yes, very first, even remotely fin tech oriented business with western union and that was moving money uh with basically horse carriages and then ultimately over telephone signal right? And that has evolved really towards the early two thousands when you had the first wave of thin act, which I call the decoupling wave which was principally B2C uh， companies.

So consumer facing companies like paypal, like prosper, like lending club amid duck com, emerged in two thousand and six. In there you also had the beginnings of beat S. M.

B. Square started in two thousand and nine. All these companies had one thing in common, which was they were B2C or bea t SMB, and they were completely monolog decoupled. So you look at a traditional bank.

So so when you say d coupling, can you talk about what d coupling from what?

yeah. So when you look at a traditional bank, you effectively have a platform that is integrated and they have a number of services. So when you go into a well fargo here in the U S, for example, you can get banking, checking, wealth management.

And that is, is an integrated multi vertical multichannel strategy versus the initial fin tax that were all a single product, single channel. And that's what I mean by decoupling. So they d coupled the traditional bank into really focusing on to enable ment with one vertical.

So for example, landing club started in personal loans, and they persisted in in personal loans, while front focuses on robot advisory wealth management. That is this decoupling and what you're seeing now across the number those companies so far. Where I started, my entrepreneurs cares a great example.

So if I started in student learn origin and refinancing and then started to recover those services that you would expect from a traditional bank by adding wealth management capabilities, broken age and trading capabilities is acedera. And so that's what's happening in fin take you have the beat c and B, S, B waves. Uh, they were all model line d coupled solutions.

They've all started to recover and really add additional verticals and solutions onto their growing platform. And in the third wave, where obviously we focus uh is this B2B ent erprise sof tware wav e and tha t rea lly kic ked off wit h str ipe ah and pla id. Stripe started their business in two thousand and eleven. H blood started around that time as well. Uh and uh, we think this is going to be the largest and most long term transformative wave in history of index.

So when I kind of I started looking to fin tag, some of my friends told me that, hey, fin tag is not that interesting because it's heavily regulated. What's your comment on that?

I agree. I think fin tech is definitely heavily regulated. But I think because it's heavily regulated, that's pretty interesting. Um if you look at B2C and b t o SMB p la yers. Um they had to overcome a significant amount of technical chAllenges.

They had to overcome business model chAllenges and they had to really fundamental change the way that they were serving consumers or commercial customers. And they had to go and ask for permission from the regulators. So so far, early days, we basically invented student lending in the private markets.

And so we had to go to O C C fera, S, C, C extant, say, hey, is this cool, right? Can we do this? And so we had ask for permission veris, asking for forgiveness.

And that's a big reason why we focus on in a Price software. These are companies that are not regulated themselves, but they are selling into regulated businesses. So they need to be intimately familiar with the regulations. They need to be compliant uh, in enterprise, ready in their own ways, think soc compliance and P S D two and so forth. That's a key part of the readiness, but they're not answering to the regulators like the traditional B2C neo bax uh and BDS a nd b p la yers are whi ch mak es the muc h mor e cap ital eff icient and fre e fro m the com plaints, not head that you typically say.

yeah, I think this is very good because you know most people when they think about the thing tag, they are thinking about the consumer facing kind of the things tech, right? But what you are seeing is, hey, there is actually a big part of the business you are enable the thing you know that the financial business you are enabled, you enable 了 technology and that， that alone is not regulated.

They are kind of helping people whose regulated their businesses regulated. It's two different things. So from that point of view, you are big fan of the enterprise customer. You know for the startups, you know you are investing that pretty good. So along this line, right? So we just recently were last months also, uh, this company called the Robin hood when I P O A, it's almost the forty billion dollar company.

And do you consider Robin hood a consumer facing? Or do you consider that a enterprise company? Part of the reason of asking this question is if you look at their revenue, right, they don't really make money out of consumers directly, but they make any are out of the enterprise and take on this.

yes. So Robert hood, in our definition is definitely A B to c consumer business. They are out trying to acquire consumer companies a, but to your point, they are making a portion of the revenue off of what's called peace off for payment for waterfall and that in a roughly seventy percent of the revenue with cattle being the largest player.

And i've been quoted in the financial times and other publications about you know the chAllenges I see with Robert od business model, they know have effectively try to game ify ding um which is a very serious business and they're doing IT with consumers that don't have the sophistication or the knowledge or the training or education around just regular uh equity trading, but also options, which has become a significant part of their business and is even more complex. And they are also offering leverage and margin loans as part of that trading process, which means that their game fine trading for novice investors and then giving them leverage to do more trading and then they're taking the other side of that trade um by selling away uh those positions, they're not giving best execution to those retail investors. Um to to your point, they have a bit to be elements in their business because they are selling off order flow that's generated by the consumers on their platform.

Um but they are very much a consumer brand and they are positioning with consumers as they want to democratize access to. My problem with that is the way that they're structured and a the lack of alignment they have with those consumers in terms of what they're providing and you know they holding themselves out there is as Robin hood. And the problem is that they're not really providing meaningful education to those consumers to actually learn what IT means to trade and particularly how to handle options on the lake.

So that's how we think about Robin hood and and they are definitely in that consumer. Then think the chAllenge you're going to have with Robin hood, the public markets and you're seeing the volatility in the trading and it's become a means stock um is that they will get comes to swap T D mara trade who trade at seven times trAiling sales. And you know there is can be a lot of multiple and valuation compression as a result.

So there are two things here, right? One is, uh, Robin hood as a business, whether that's really good for the novice investors or not, there is a question mark, right? But on the other hand, a different business point of view. It's almost like a uh, the traditional google business model that they give you some consumer facing product for free, but they kind of sell your behavior in the way uh, to the enterprise and I make money out of IT. Is that my understanding correct?

Uh sort of I think with google um they're providing obviously a really important service with search and then they're serving up advertisements. But you as a consumer have to opt in to those advertisements, right? So they've got advertisers who are big corporate and enterprise customers, you spending ad dollars to get know in front of consumers who are obvious ly using google for search and other features.

The issue with Robin hood is you're not opting in or out. They're doing IT t. So if you're robbin hood user, you have the ability to opt in, opt out on margin loans, certainly, but you don't have the ability opt on is what's happening to your trades. And on swab and T D, my trade, he traded and all their peers. They guarantee best execution. Meaning if you set a limit order and you say I want to buy apple at a hundred and fifty dollars a share, which apple is not treating, i'm just using an example um you're going to get at least one hundred and fifty dollars to share or Better versus Robin hood where you know you're probably got ta get a much worse Price for that stock um because they're trying to make some margin or some spread in that position and then they're trying to sell IT off to set IT all or one of the other partners who may be going short or long or the lake. That's how I think about Robin hood is is different from google on the sense that they really are driving that behavior.

Well, in the way you are saying that you are screwed, but you didn't know you are screwed even opting right. So let's focus on the enterprise a little bit before we talk about you know what kind of the opportunities do you see? I was curious who's the first fin tech service company .

out there put the category. So you think about when they started back in two thousand and eleven, they were really one of the first. But if you go away away back to the kind of the nineties, right, it's a paypal started ninety eight.

You have insurance in ninety eight. The kind of original sas company in vintage is using, right? So usually started in one thousand eight ninety nine.

You can think about them as the first situation of plaid. And what uly was providing was the infrastructure which ultimately mint com leverage to build its personal financial manager platform. And so uti is uh, day aggregation.

So they went to the banks and they said, hey, you know, consumers want to aggregate all their accounts and have a single view of other assets um and they also want to be able to move money between bank accounts for C H and other means so we're going to help you do that. And see, italy was actually the first SaaS player in nineteen ninety nine. And then if you think about kind of the most transformative SaaS player there after IT was stripe twenty thousand eleven.

And the reason they were so transformative as uber and other tech enable platforms would not exist without stripe strike formed. A very simple you know couple lines of code for payment acquires on tech able businesses like you were so you can pay for your ride instantaneously like inter card um so that you can have any point sale payments processing like tord, ash seta. All these players needed a means of payments that was super easy to integrate into whatever business bottle they had and strike offered that and strikes.

Now the most valuable private a phin tech in the world right then, one of the most valuable is not the most valuable private company in the world, and that's how they're get scale. So I would point to stripe as the kind of most valuable example and the clearest example of the third wave. But we've had enterprise software dating back to ninety nine.

I would also point to VISA mastercard. VISA started in one thousand fifty eight. Master card started nineteen sixty nine.

Both of those are you know examples of network providers who are sit in the middle and in our B2B rig ht? They're working with merchants and taymor acquires and they are truly facilitating as a marketplace uh, credit card and debit transactions. And so I think it's pretty fascinating.

yes, dating back all the way to nineteen fifty eight, the software enabling the enterprise to do such financial applications. Uh, usually I I clearly remember that time, right? You know, because I was a customer of a few companies such as fidelity, vanguard.

I remember that usually you know there's powered by usually somewhere, somehow you know for this kind of the data aggregation parts. So a strike you right? No hundred and fifty two billion dollar valuation, just a very recently, only this year, they raised around a largest unico.

As as you said, there are more than that a in the last week alone, right? There was another fun raising news time, twenty five million revolute, thirty three billion dollars. But those are kind of the consumer probably closer to consumer side.

On the enterprise side, uh, there is a cloud one hundred list. I looked at the top ten companies, and the first one is strike one hundred and fifty two billion dollars. And then the other two on the top ten list is played thirteen billion dollar and then check out fifteen billion dollar. So so when I look at the you know everywhere right um thing tag is a big component of is a big portion the entire SaaS ecosystem.

I remember seeing some data about in q uh the quarter we just finished, uh there was like a hundred fifty billion dollar uh fun raising uh activity in the V C land and a twenty two percent of that actually went to fin tech and pressure you contribute to so maybe you can give us A A little bit understanding of you know twenty two percent of a hundred fifty six billion dollar investment. That's a big amount, right? Where are people investing? What what kind of categories do you see within the fin tech says.

yes, it's amazing that such a huge percentage of tech investments now are going specifically intervened. C, we think about things that in a pretty diversified way. So if you think about in embedded finance.

As one category that's banking lending payments. A second category would be as of management capital markets that things like wealth tech, it's things like trading and exchanges, it's things like market data. Third, we call IT the CFO text tag. Um but that is everything from budgeting, forecasting, expense management, the treasury function and so forth worth in show tech.

Ah so we include that within the broader fin tech world mainly because a number of financial services organizations and fin tax are certain off insurance products and there's a lot of cross over and insures are out there wanted offer checking, banking services and so forth. And so that's the other category we think about, and that's new recent technologies. It's helping insures digitize.

There's a huge number of things that are going on in that world. Fifth, we a think about blockchain and the crypto and digital elastic world that could be enterprise blockchain use cases or could be sas software, uh, that's being used by banks and ask the managers to work with literal assets. And then lastly, the six category we think is is very attractive as infrastructure and enabling technologies.

So that's a red tech, uh, cyber, big data analytics and quantum computing as well as cloud migration technology. And so those are the six categories we think about within the fin tech world. Um others will include project within that and kind of project is an adjacency, and you certainly have some companies that sit in the middle of of that intersection product and vin tech.

And so we think that's another really important and obviously massive asset class. And then just taking a step back and looking at whose funding these deals, one of the biggest trends in venture capital private equity is that public market investors recognized that they couldn't wait for the I. P.

O. anymore. There was just too much valuation increase uh, in the private markets. And a lot of the money in the multiple expansion was being made in the private markets, on the public of markets.

So fidelity, T O Price, willing ton, Frankly, temple ton, eeta all started making late stage private equity investments. Coupled with that, you have traditional hetch fun investors who were also actively playing in tech in the public markets, who also decided he wanted to make private market investments to get in earlier. And that has become a slippery slope, uh, meaning uh hatch fun investors and even some of the mutual fund and traditional public market investors have started to come earlier.

So we're seeing tiger and koto is examples in series A A rounds. And so what that's created to just a massive amount of dry powder accumulation on the sidelines going after private markets more than any time before. And fin tech is an area that has traded well in the public markets, particularly the B2B pla yers, think square and paypal.

And you know that is something that obviously poke market investors want more exposure to. There is a significant time, significant part of innovation happening in the space, and that's really IT what's created the the massive intensity. And then I was say, last but not least is larger fun sizes and more L P capital going into venture. And private equity um obviously has driven more capital to put to work in fin tech is is one of those sub sectors were clearly private equity and venture capital uh players can drive returns. And so that's created uh this opportunity for all us.

Right, right, right. I mean, you see that you know fidelity of the world, the public market, the hatch friend of the world come into the private market. It's not just the fin tech, right? It's actually for almost all of the private market, uh, in the way.

And then there is a squeak going on from that point of view. And I know that you actually are not as impacted because you are you do a lot of the early investment, so speak of that. Do you see like today, you are investing in very early stage versus, you know, the public market, write the darlings, the square of the world.

Do you see that there is a very different theme going on like, you know, hey, in the public market, those out of companies that are thriving. But in the very early stage, this is the category that are you know more likely thriving, you know in five or ten years. Do you see like a different categories in this scenario here?

yes. So I would say that a lot of the public market companies, right, we're for part of the first and second waves of b to C B S N B. And because, you know, there are all the waves and have been around for longer, they are, in some cases, public or and we're going public.

The recent acquisition of the after pay by square, maybe another .

example, right? Companies like square so far, a firm funding circle, acta, that are all now public companies and they are public. And h, in a word, the original players and those first two waves, you're going to now start to see B2B pla yers goi ng pub lic mar kets ble nd, great examples, strikes likely going to go public and this year, next year time frame.

And so it's time now for the B2B pla yers go pub lic. And if you look at broadly the return profiles of these businesses, the ones that are more B2B in the ir bus iness mod els are get ting val ued hig her and are per forming Bet ter in top of mar kets ver sus the con sumer buy er. So as an example, landing club has really struggled in the bubble markets, and that's principle because the public bar investors look at the business and their like, right? This is a lending business.

IT doesn't have really a lot attack IP. We're gonna value this as a baLance sheet tangible book value business, and that's what's happened. And so public market investors have valued the business at a lower level than the private market and investors gave the company credit for because they view that as more of a technology business verses appear baLanced, tangible book value business. And that's what's happening in the public markets are square.

And paypal, because of their strong B2B ori entation, are actually getting a significant amount of attack multiple credit as our companies like marketer and blend versus lending club, Green sky funding circle and even so far to a degree, I think get public market investors look at so far and they see you know a marketplace learning to business where they are uh, relying on lending as a significant part of revenue. You have to remember, lending is a do over business, meaning you're making a bunch of loans during the year. And then in the minute the new year starts january first, you gotta start all over again.

You started zero again, right? So if you make a hundred million of loans this year, next year, you're not going to a get credit for those loans. And so, so far as a very difficult business to great predictability, an installation in their profile, they also tend, along with the other peers, to have lower gross margins, which public market investors do not like, h public market investors want to see sixty, eighty plus percent gross margins, and they do not want to see gonna thirty, forty percent cross margins because those are very defensible.

The other thing you'll see from public market investors is they are not only do they love occurring reverdy models and substantial models, but they're not fans of businesses that are purely relying on interchange fees. And so pure interchange business models market is in this category. Although market is actively trying to build more software to support their business and to monetize around software, there is just pure interchange.

And that's another kind of knock on, uh, pure payments businesses that really struggle to add additional layers of sticks, sticky revenue. So so that's how to think about IT. So I would say, generally speaking, the best performing companies still in early stage proceed all the way through the public markets have more of A B to b orientation. And if you think about that, it's the public market financial investors and the most open htike ted of those versus the retail investors that are really set the tonality. So for me, I got ta look at what's eventing the public markets in order to make sure, particularly in my growth equity companies, where we're looking to potentially put more money to work that, hey, this is going to be a company that's going to be embraced and well received by public market investors because otherwise you're investing in something that potentially all the value will have been you know, brought in the in the private markets and IT won't be that interesting of a public market outcome for you.

right? I think you know that's probably why you are kind of a doubling down your investment in the enterprise B2B thi nc com panies, right? You know there growth margin, their stickiness, right? It's actually uh, just more superior than a business model, just a setting to S M B or the consumer.

So any conversation about fin tech or financial related sort of investment conversations, probably I wouldn't do IT justice without mentioning a bitcoin, right, a broad chain part of the market. You know some people perceive that, hey, bitcoin, blockchain, uh, whether fluffy or not, you know there's a lot of uncertainty, right? And then you know the market go up and down a lot, uh, at least from bitcoin Price point of view, to say the least.

And what's your point of view about enterprise software for this segment? Like I know as a fact, you actually recently invested in a company caught on chain is a in the block chain part of the business and why? What's your perspective in this market?

So i've been buying bitcoin since two thousand ten, and it's still my best trade of all time. But I view IT. Is that right?

I ve never been a big believer in bitcoin as a store value and you know, as a means of creating commerce. I've view IT as a asset can be speculated on, quite Frankly. And the most interesting part of bitch coin and the broader cripes space is the underlying technology of blockchain.

It's various instantiation in different chain opportunities, uh, that we see today. So the two areas that we invest in, in the space or one enterprise blockchain solutions, this is where blockchain can be very simply cheaper, faster, Better. If you think about that, it's really use cases where there is a bunch of expensive intermediate.

So if you see expensive rent tigers in the middle of a process, you have an opportunity to potentially put block chain uh in their place. Are using things like smart contracts, validation nodes and obviously the inherent immediatement and distributed nature of the letter. So that's the first area, a great example that is figure in our portfolio who's using their blockchain protocol, prevent on stock I O in a number of different ways, but the largest of which is assembly security zone.

So the aspect captivation market off chain, so to speak, is a three trillion market. IT takes one hundred and twenty days over the counter OTC to securities, a pool of loans, one hundred and twenty days. Uh, this is a market has been around for twenty five plus years and IT costs the original.

So if your bank america, you want to securities, a pool of one hundred million mortgages. It's going to cost you one hundred and fifty to two hundred thousand points and take you one hundred and twenty days. Um and the reason for that is there's five really expensive intermedia sitting in the middle and I won't go through all of them.

Um but figure is basically put a blockchain in place that distance immediately and takes out of all five of them. I should say four out of the five one of them has stayed, which is the rating agency because you still need to read the paper. That's pretty fascinating.

And you think about other use cases like supply chain. We have a company called to shift focusing on that. And book chain becomes a very powerful solution for specific use case.

Now it's not a solar bullet. We get presentations all the time from founders that are no block chain for x and if you replaced word blockchain with the word database, it's a Better business. And so just because, you know, blockchain is a hot commodity and a hot technology, does that mean it's gonna fix everything?

The second area is where anche and others play, which is enterprise software solutions for corporate and other players around the digital sa community that need those solutions from back office through the front office. And so when I think about back office setting about custody, I think about clearing and settlement. And if I think about middle office setting, about red tech and and chain plays in this reg tech or regulatory technology category for visual assets.

And a big issue in digi assets is around somewhere IT is banks and active managers wanting to work with digital assets but not feeling comfortable with IT, right? They can't diligence sit. They can't do K Y C M L, uh, if they want to really track down you know, bad guys, so to speak, who have you know, issue rent somewhere or using blockchain rails to try to steal crypto and using smart contracts and all these other functionalities I just mentioned that are doing good.

In some cases, you need a really powerful solution for effectively following down them down the chain, and that's what in chain provides. There's other players like analysis out there. But what we found with and chain is they just have such stronger technology capabilities and they can look at mixers and and smart contracts in these other areas that are new innovations.

And you just got to stay ahead of the curve, much like red tech in traditional banks in the crypto asset world, things are evolving so quickly that you need powerful tech AI machine learning other means to stay head of that curve. In addition that I would say in other the front office tools. So think about for crypto research and analytics trading systems.

Obviously, we've all seen the exchanges like coin base cracking in germany. I and we've seen etf and new products emerge effectively. The traditional as management world is being replicated in the asset management in the crypto world, and that's huge. And so getting exposure to that as an investor is really important.

By the way, i'm a big fan of doctor Victor fan as well. It's good to hear that you have a such a positive view on on chain. Uh, one last question I want wanted to discuss with you is really the global of you, right? So for instance, you you know that china is pushing the money quite a bit.

Do you see that having some impact or chAllenge on pretty much A U. S. Dollar dominant the world in the recent few decades, to say the least? Uh, how do you see the landscape evolve here?

yes. So I think every government and sovereign gonna have ultimately some kind of stable coin against their fio. T I think that's inevitable.

Obviously, china has already developed their own solution there. I think obviously, U. S. Dollar continues to be the reserve currency, but it's very clear that china wants to take a leadership position in that regard and potentially by for that type of position.

I think the chAllenge in china has been really trying to manage regulatory messaging. It's not clear from the regulators how they view crypto and block chain. And obviously, with recent enforcement mechanisms on traditional technologies like financial and ten and so forth, um it's really hard to read.

So I think entrepreneurs, even though china from A I T perspective is massively ahead from at least of filing standpoint on chain related applications, I think in actuality, the maturity of the block chain encryption world in china has been chAllenge because the regulators really haven't given them a path and clarity on those fronts. And so I think that's how we think about IT. We think that it's a blockchain is a really critical application for governments to embrace the digital currencies to supplement with the theater obviously providing the backing and the stable uh aspects of that is really important.

And we think ultimately, every sovereign going to be able to provide for that. But if you look at where crypto has really thrived, it's actually in countries where their own home currency is highly valuable and a subject to inflation. See, look at venezia a some of the land american countries, a lot of their citizens have more faith and trust in bitcoin uh were either than their own currencies because theyve been so dramatically devalued. And I think that's an interesting take away um because obviously U S china others have fairey stable value in their fight and home currency um before other countries, that's just definitely not the case and it's not very easy to move money cross border in those countries as well. So viga wall serve multiple .

yeah this is actually fantastic talk. Give me a pretty good overview of how you think about the fanta x as industries. You know, what I heard from you is this a one thirteen dollars spent right in the financial industry? Only ten percent of them the spend is on the cloud.

And then there's we expect massive newer spending or the newer movement onto the cloud, obviously. So that give you and give all of us, you know an opportunity to see that the fin tech, the business to thrive and to do more. And and you know you also mention the law, you know even though fin tech financial industry is a regulatory business, but the fin tech SaaS business is relatively speaking, lower regular or a scrutiny that's actually a pretty good for this segment.

And then you know device model, right you know recurring model d you know high growth margin and then pretty light capital investment compared to the B2C sid e of the fin tec h. You know the B2B rel atively spe aking, a more capital light. So overall sounds like you know the private market the public market just give the south fin tech that part of the business more higher multiple, right? They give you more premium value the business.

So it's actually a pretty good business to be in. It's good to hear from you that is think that is not just about B2C rig ht to con sumer kin d of bus iness. There is so much money, so much spend, so much in the enterprise. Thank you so much for taking the time to chat with me about pi n tag SaaS business.

My pleasure, Harry. So good to be with you and look forward future conversations.

Okay, thank you. Have a nice one.

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