What are the most sought after Fintech & Crypto segments after the crisis?
We analyzed the evolution of the segments that attracted the greatest number of investments from funds specializing in Fintech and Crypto, before and after the market crisis, considering the period from January 2020 to March 31, 2022 as Pre-Crisis and April as Post-Crisis. to August 2022.
The sample consisted of 229 investees from specialist funds QED Investors, Quona Capital, Multicoin Capital, Andreessen Horowitz Crypto, Parallax Ventures and VEF considering the hypothesis that these funds are more likely to anticipate the most relevant trends.
We noticed strong changes, even with only a short Post-Crisis period and knowing that the effects of the adjustments in the markets have not yet fully matured. Sectors with a large volume of transactions in 2020 and 2021 such as Digital Banking, Proptechs, Crypto Exchanges and Payments had much lower representation, either because the market spaces are already occupied, or because these funds have already chosen their “champions”, and...
...more defensive sectors and associated with the spread of Embedded Finance and Blockchain models such as Financial Infrastructure and Crypto Infrastructure became more relevant, while Marketplaces and Digital Lending models remained present, especially those focused on ecosystems of professionals and companies still poorly served by the market.
In the financial services sector, which globally reached approximately US$25 Trillion, we see Fintechs with a penetration of less than 5% and therefore we are sure that new waves of transformation in Fintech and Crypto will increase this share in the coming years, including as resulting from innovations in Open Finance, Pix, LGPD, DAOs, DeFi that barely had time to develop.
Additionally, and this is not reflected in the short space of the post, we noticed a discreet increase in investments in fintechs with at least part of their products based on machine learning, a.k.a AI, and we bet that this trend will radically accelerate in the next few years.
RELEVANT SEGMENTS 2022
Financial Infrastructure:
Business models that allow non-financial institutions to have revenue from financial transactions and customer retention, especially in underserved sectors such as professional classes, SMB, Creators.
Marketplaces:
Marketplaces that solve customer needs and matchmaking investments, payments, professional services and physical or Digital remains attractive, even though marketplaces are difficultto build.
Digital Lending:
Digital lending for segments underserved by institutionstraditional financial institutions, lending associated with low-liquid assets, focus on communities and specific segments such as creators, drivers, foreign trade, Crypto Collaterals.
Crypto Infrastructure:
Tools that facilitate and accelerate the construction and management of solutions for Crypto, Blockchain and Metaverse, from platforms for DeFi, DAO’s to building avatars for the Multiverse.
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