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Last year, more than 20% of venture dollars went into fintech startups globally, according to CB Insights. Equally notable: one-third of all unicorns created in 2021 were fintech companies.

The 2021 Matrix Fintech Index reported that public fintech companies outperformed the market by 3x, driven in large part by favorable IPO debuts, SPACs, and increased adoption of digital payments and e-commerce, BNPL in particular.

Even though those companies saw a draw-down of approximately 30% in the year’s closing months, investors are eagerly looking for new opportunities: in the final accounting, VCs funded private fintech startups to the tune of $134 billion, Crunchbase found.

This is a great moment to launch a fintech startup, but which firm is best to pitch if you’re an early-stage embedded finance company based in Latin America? Who might be your best bet if you’re a later-stage B2B payments company in the U.S.? To give TC+ readers specific knowledge about what fintech investors are looking for right now and what you should understand before approaching them, we interviewed ten active investors over the last couple of weeks.

Spoiler alert: crypto came up more than once, and LatAm is hot, hot, hot when it comes to investor interest. Each respondent was kind enough to let us know how they want to be pitched, and for grins, one shared an example of a cold e-mail that worked.

Here’s who we surveyed:

• Anish Acharya, general partner, Andreessen Horowitz (a16z)
• Christina Melas-Kyriazi, partner at Bain Capital Ventures
• Ethan Choi, partner, Accel
• Pete Flint, general partner, NFX
• Munish Varma, managing partner at SoftBank Investment Advisers
• Nigel Morris, managing partner, QED Investors
• Tyler Griffin, co-founder and managing partner at Financial Venture Studio
• Mark Fiorentino, partner at Index Ventures
• Sheel Mohnot, general partner, Better Tomorrow Ventures

Anish Acharya, general partner, a16z

Fintech startups were the recipients of huge amounts of venture dollars in 2021. As a firm that has been investing in the space for a while, what differences in the landscape did you see? Were deals much more competitive?

Overall, there are two ways to look at fintech — the narrow view of the space is as a set of financial services delivered via technology, a much broader view is fintech as a new business model for every internet company. The latter opportunity is 10x larger than the former and the infrastructure that supports this change could yield some of the biggest yet-to-be-built companies in fintech. We’ve only just begun.

The domain is still technical enough that founders can get more value from experience and expertise and where many generalist investing patterns may not hold. For example, exponential growth in consumer products is almost always a reason to invest, except in consumer lending, where giving away money always has product-market fit and growth matters less than one’s ability to get repaid. So, investors with real expertise, rather than those who may be experiencing fintech FOMO, have the ability to pick and win more of the right deals.

What in particular in the fintech space is getting you all excited? What do you feel might be overhyped?

I have a belief that the products are becoming the primitives of financial services — that the traditional financial products we think of (banking, lending, insurance, payments) can now be integrated via a single line of code, which gives founders an opportunity to create higher-order and more interesting consumer experiences. As we look forward, it’s no longer good enough to just offer a standalone product; the most compelling value propositions will rethink and remix these primitives in unexpected ways.

What criteria do you use when deciding which companies to invest in?

Successful founders in the financial services domain have a rich history of understanding the patterns of the past as a meaningful competitive advantage. We care a lot about how authentic the founder is to the problem they are solving and how much work they’ve done to understand the history of the domain — what’s worked, what hasn’t and why their approach is different.

What markets (in and/or outside of the U.S.) in particular are you as a firm drawn to, and why?

Being rooted in Silicon Valley, we increasingly view it as a set of networks that exists to foster new thinking versus merely a geography that founders are building within. We’re seeing a lot of activity in budding fintech ecosystems across LatAm.

Additionally, many markets that may have been considered “small” (like my home country of Canada!) present rich opportunities for fintech. For example, the LTVs are enormous for categories like wealth management, where a founder can build a multibillion-dollar business with just a few million of the right customers.

If a startup wants to pitch you, what’s the best way?

Let’s talk! It’s the best part of my job. (Email preferred.)

Christina Melas-Kyriazi, partner, Bain Capital Ventures

Clearly, fintech startups were the recipients of huge amounts of venture dollars in 2021. As a firm that has been investing in the space for a while, what differences in the landscape did you see? Were deals much more competitive?