Husband. Dad. Co-Founder @localglobevc @latitudevc @phxcrt @weareplatoon @zincvc @teamkano @seedcamp @lovefilm
the best content stays fresh h/t George Henry flagging Julian Rowe excellent post - incredible wave of fintechs are maturing
Almost a year ago, my partner Julian Rowe wrote a post on “why we’re entering a golden age for fintech scaleups”. In a time of doom and gloom for the fintech sector, he observed that “the strongest fintechs will look like a profitable mashup of software and financial services. Like great software companies, high-growth fintechs can benefit from significant gross margin and operating cost leverage as key cost lines grow modestly in dollar terms, while shrinking as a percentage of revenue. For instance, Nubank’s efficiency ratio (opex / net revenue) has fallen from 92 percent to 47 percent in just 2 years.” As Nubank is expected to report $1 billion in annual profits (see chart below, link to FT article in comment), this conviction is playing out in the public market. The most successful fintechs are indeed demonstrating that, as they start to reap the rewards of their operating leverage, they become much more profitable than traditional financial services. In our own portfolio, we're seeing a similar trajectory with Wise as a public company but also with private companies like Tide, Monzo Bank and Raisin. Revolut, which released a set of impressive numbers at the end of last year should be another example. It will be exciting to see markets become more familiar with this new breed of financial services companies. Read Julian's post here: https://lnkd.in/eQFK-gta
