Illustration: Allie Carl/Axios
What's in store for fintech in 2023? We asked some leading dealmakers and fintech executives for their predictions on what to expect in the New Year. Here's what they're saying.
Note: Some answers have been edited for brevity and clarity.
Brian Dixon, managing partner of Kapor Capital:
- One — BNPL will be a feature of traditional credit cards in 2023 versus a solo product as it currently stands. I expect many credit cards will adopt this feature.
- Two — Generative AI meets fintech. I expect robo investors to roll out new AI-assisted robo advisors.
Lule Demmissie, CEO of eToro US:
- Tech has been through a painful year. That’s unearthed a lot of opportunity for the strongest firms and a fight for survival among the weakest.
- Dealmaking tends to pick up toward the end of bear markets, and I expect we’ll see the same situation this time around ... Consolidation is normal in a maturing industry, and crises can accelerate that process.
TX Zhuo, GP at Fika VC:
- Don’t expect a slowdown in dealmaking at the seed/Series A stage, but a greater focus on unit economics early on, and B2B fintech will be more popular.
- At the later stage, rounds will be predicated on companies having a clearer path to profitability. [We'll see] consolidation of direct-to-consumer fintech distribution plays across all sub-verticals as CAC gets challenged, [and] more M&A to get to economies of scale faster or for product breadth, so cross-sell lowers blended CAC.
Rex Salisbury, founder and GP at Cambrian:
- 2023 will be an awesome year for pre-seed and seed-stage fintechs to hire top talent.
- If you’re a seed-stage company, not only are you facing less competition for job seekers, but you are also better equipped to poach from later-stage companies, where many employees are depressed because of layoffs and underwater on their equity grants.
Jillian Williams, partner at Cowboy Ventures:
- I think security/compliance/ fraud and risk are going to be extremely top of mind next year ... FTX is a driver that will push increased scrutiny from regulators.
- We’ve seen fraud grow drastically across the board, and a lot of the security measures have fallen to the wayside at the expense of growth. We will see a lot of new entrants in this space.
Mark Batsiyan, partner and COO at Inspired Capital:
- Incumbent financial institutions will go on an acquisition spree fueled by strong profits by banks and insurance companies and the opportunity to buy startups at much more attractive prices.
- And fintech for SMBs will be a huge area of focus as SMBs look for innovative solutions to help them through the economic cycle.
Justin Overdorff, partner at Lightspeed:
- One: A few consumer neobanks are going to either fold or be forced into exits/m&a scenarios.
- Two: A wave of new payment entrants building more flexible APIs and primitives will start slowly taking share from Stripe and Adyen in areas like marketplaces and vertical SaaS payment layers.