By Peter High. Published in Forbes.
Matt Harris has been investing in FinTech companies since before the term was coined. He was initially drawn to the field partially due to the lack of attention it was getting 20 years ago. As he notes, “In the beginning, the incumbents ignored the startups because they thought they were insignificant, and then once the financial crisis hit, they ignored them because they had far bigger problems to deal with.” This was to his advantage.
Now, with a great number of winning investments to his credit, Harris has developed deep perspectives in and made investments to follow those insights into the core four segments of FinTech are payments, lending, investing, and insurance. He also argues in this this interview that real estate is worthy for consideration as a fifth segment. This interview is a remarkable overview of FinTech.
(To listen to an unabridged podcast version of this interview, please click this link. This is the 30th interview in the Tech Influencers series. To listen to past interviews with the likes of former Mexican President Vicente Fox, Sal Khan, Sebastian Thrun, Steve Case, Craig Newmark, Stewart Butterfield, and Meg Whitman, please visit this link. To read future articles in this series, please follow me on on Twitter @PeterAHigh.)
Peter High: You are a Managing Director at Bain Capital Ventures where your area of focus is Financial Technology [FinTech]. Could you define some of the discrete segments that have emerged in FinTech?
Matt Harris: While I had invested in FinTech companies since before the early 2000s, it did not become my sole focus until roughly 17 years ago. At the time, there were not many VC firms that were similarly focused exclusively on FinTech, so I saw an opportunity to get involved. Back then, FinTech was mostly around vendors and about companies’ ability to build technology and sell it to financial services organizations. I called the buyers the incumbents, which were the existing banks, broker-dealers, and insurance carriers. From my view, these companies typically preferred to buy technology from other large organizations, such as Fiserv, FIS, Jack Henry, Accenture, and IBM. Because of this, the opportunity to build new vendors to help the incumbents be more successful was not there.