Its timing and San Francisco backdrop provided an added dimension to last week’s Finovate Spring conference. A procession of seven-minute demos from 52 fintech innovators remained the main attraction at the event’s annual West Coast edition.
At the same time, the market’s recent downturn—which has hit technology stocks particularly hard and cut into the soaring valuations of fintech startups, several of them funded by Silicon Valley investors in the audience—weighed heavily on many attendees’ minds.
During an “Investor All-Stars” panel, Mercedes Bent, a partner at Lightspeed Ventures, observed that while venture funding for early “seed” stage startups continues as normal, “the growth markets are virtually closed” for later stage (and typically larger-sized) Series A and B investments.
“If you have to raise money this year, it’s going to be really hard,” she added.
There was a notable increase in demoing companies concluding their stage time by expressing interest in engaging with potential investors. This had been a common occurrence in Finovate’s earlier years.
As capital flowed freely the past few years, however, presenters’ focus shifted toward identifying financial institution customers and fintech partnerships. These goals remain in force as well, but the pendulum has clearly swung back to some extent.
The funding overhang didn’t impact the supply of—or appetite for—compelling fintech solutions, however. One of the six audience-selected Best of Show trophies went to Spave, a “financial wholeness” app designed to promote both saving and giving while empowering financial institutions to increase card swipes.
The company is part of Reseda Group, Michigan State University Federal Credit Union’s stable of startup investments.
Also capitalizing on their seven minutes of exposure were credit union service organizations Illuma Labs and Posh Technologies, who alongside mutual customer TruWest Credit Union shared a product collaboration delivering biometric voice authentication for call centers combining voice recognition and conversational artificial intelligence. The solution won NACUSO’s Next Big Idea competition the previous month.
It’s also interesting to consider the topics absent from the stage. There were no pitches involving Buy Now Pay Later solutions, perhaps the hottest fintech category of the past 18 months. And the word “metaverse” seemed to be off limits.
Vicki Huff Eckert, PwC Global leader of new ventures & innovation, opined that while the phrase may have reached the ebb of its hype cycle, the technology is not going away. One demoing company whose solution practically screamed “metaverse” seemed to take pains to avoid the term.
Eckert also predicted that fintech “is entering a buy-or-be-bought market,” and that “the true unicorns will be the ones doing the buying.”
Despite a liquidity crunch likely to have near- to mid-term impacts, consensus among Finovate panelists and attendees is that good ideas and savvy innovators will continue to thrive.
As Patricia Kemp, Oak HC/FT co-founder and managing partner, put it, “If you have cash, you’re in a position to leverage it.”
GLEN SARVADY is managing partner at 154 Advisors.