Consumers in every country are getting squeezed on all sides. Globally, sluggish wage growth and rising inflation has encouraged shoppers to defer payments on everything from groceries to durable goods.
Affirm, Afterpay and Klarna own 75% of the sector in the U.S., which leaves little room for startups hoping to join the fray. Founders who target emerging markets like Latin America and India may have a slightly easier time, but only if their products and services are clearly differentiated.
To learn more about the state of the industry, Karan Bhasin interviewed four fintech investors:
- Frances Schwiep, partner, Two Sigma Ventures
- Melissa Guzy, co-founder and managing partner, Arbor Ventures
- Jonathan Whittle, co-founder and partner, Quona Capital
- Jason Brown, partner, Victory Park Capital
In addition to sharing direct advice for fintech founders, they talked about managing fraud and default risk, BNPL’s growing popularity as a point-of-sale option, and what kinds of investment opportunities they’re looking for.
Several predicted that consumers will soon be able to make installment payments on recurring expenses like rent and subscription services, along with healthcare expenses.
“We also see opportunities for new BNPL products for small businesses that are looking to reduce cash flow strains or avoid maxing out credit lines,” said Jason Brown, partner at Victory Park Capital.
This is a maturing market, so it won’t be easy for new players to buy into the game, no matter how strong their idea.
According to Melissa Guzy, co-founder and managing partner at Arbor Ventures, “a new entrant will need a significant amount of capital from the start for marketing and winning a position on the checkout page,”
Thanks very much for reading TechCrunch+ this week,
Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist
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