¡Viva FinTech!


At John Battelle’s NewCo event last week, I had the opportunity to meet a founder of a FinTech startup seeking to revolutionize payments in Mexico. After spending time with team at Clip, I decided to write on a few FinTech startups focused on Spanish-speaking and LatAm markets.


Rather than go into detail on Clip’s story, read the PandoDaily article on them for a recap of its business model and history.

In a nutshell, Clip is looking to be Square for Mexico, a market where cash dominates, merchants keep multiple card reader for different banks – and where credit is often as scarce as finding good customer service, according to Clip.

60% of the Mexican market (over 75 million people) is considered unbanked: Many line up to cash paychecks; cards are not as prevalent with consumers or merchants. Clip is trying to disrupt the market with technology, superior on UX, and through exceptional customer service.

I’d lower its reader price to compete with Sr. Pago, but I found Clip’s goal to deliver “customer happiness” vs. Comcast-like service found at Mexican banks was a compelling vision. Their energy and passion for the SMB and bringing change to banking in Mexico was inspiring.

They could, if successful, achieve a double bottom line impact in Mexico and Latin America – a topic on my mind after last week’s CFSI Emerge event.

iZettle and Klarna & Latin America

Beyond Sr. Pago and Clip, startup iZettle  (which does business in Mexico today) is looking to grow across Latin America (bypassing the US market, which it sees as too competitive). It Screen Shot 2015-06-19 at 2.04.31 PMrecently rolled out a low-cost card reader for Apple Pay.

Another startup, Klarna, is targeting the Latin American market: It just announced the hiring of an executive from American Express to lead growth efforts, noting he had led business development for Latin America.

Klarna, unlike iZettle, is also targeting the US market.


I spoke this week to another innovator in the Spanish FinTech category, Sergio Chalbaud, CEO of Fintonic, a startup founded in the wake of the financial crisis in Spain, whose PFM application has a 70% market share in Spain.

Fintonic aims to be more than a PFM solution. Rather, the goal is to be a “bank of banks” and help consumers meet their financial goals. fintonic logoFintonic offers a lending and insurance centric mobile solution that “goes beyond a traditional PFM using, using proprietary algorithms and data” said Chalbaud.

The aim is to reduce the hassles of entering data and provide better transparency and terms for consumers. After success in Spain, Fintonic is expanding to Mexico and Chile.

“The reality is that the majority of Latin Americans are still ‘unbanked’ but our research shows this population wants to learn about their finances such as how to obtain loans.” – Serigio Chalbaud, CEO of Fintonic

BBVA and Simple

Simple, the online bank that was acquired by BBVA in early 2014 is yet another example of the marketplace involvement of Spanish banks in FinTech.


Simple won praise for its product usability, elegance and corporate culture that was unlike that of a bank. Dave McClure of 500 Startups backed Simple in 2010.

Although Simple gained just 100k customers in the US, never earned a profit or – a critical show stopper – obtained a banking license, it inspired a lot of admiration.

In fact, as the NY Times reported  the chairman of BBVA, Francisco González, was intrigued by its co-founder criticizing banks’ technology and service. González wrote a letter to Simple’s founders that later led to BBVA buying Simple.

Banco Santander & Innoventures

Another Spanish connection to the FinTech world is the role of Banco Santander, a well-run and acquisitive Spanish bank known for its global expansion under former CEO, Emilio Botín.

santanderHaving advised Abbey National, a large building society in the UK (similar to a savings and loan) later acquired by Santander, I’ve followed its global growth.

It’s worth noting that FinTech thought leader, Bradley Leimer, is Santander Bank USA’s Head of Innovation. Santander made news last year when it set up Santander InnoVentures. Its $100 million fund in 2014 will help the bank get closer to the wave of disruptive innovation.


Another great FinTech story in this market is Oportun, formerly known as Progresso Financiero.  The startup bank is run by Raul Vazquez, the former global head of e-commerce for WalMart, and widely admired business leader.


Providing affordable loans for the Hispanic community, it’s a new style bank with a tech-like culture and amazing  customer service.  Backed by FinTech venture capital firm, CoreVC, Oportun is expected to IPO in 2015-6.


For more information about FinTech and innovation in the Spanish-speaking and Latin American markets, I’d suggest looking at Finnovista, an organization that is 100% focused on innovation in financial services for Spanish-speaking markets.

Screen Shot 2015-06-19 at 1.43.04 PMI’m hoping that I’ll collaborate with Finnovista in the future, so watch for updates on this.

Look into Finnosummit, its annual event taking place in Mexico City in September.

(Sign up at this link)

¡Viva FinTech!

IPO’s: I’ve Got Five on It


As I wrote last week in my first story on TheStreet.com, I’m bullish on the prospects of FinTech and wider tech industry’s recent and upcoming IPO’s, so I’ll shift focus my this week from marketplace lending to marketplaces for equity markets.

Etsy_logoLast week, well known New York startup – and yet another success story from Fred Wilson‘s Flatiron Ventures – Etsy, went public. Although not a FinTech company, my interest in Etsy’s IPO is due to equity crowdfunding aspect of its IPO.

You may think it was just another IPO – just as OnDeck, the fintech company, went public in Dec. 2015. But, while my former colleagues at investment bank Morgan Stanley took Etsy public, what was unusual was a portion of the offering was reserved for crowdfunding – in keeping with the company’s focus on individuals, and it’s story of empowering individual artists and designers.

Beyond the company’s desire to do something with its public offering to reinforce its brand, it was pretty surprising to me that Morgan Stanley allowed individual investors without a relationship with Morgan Stanley to get shares.

In my experience, high profile anticipated IPO’s, such as last year’s Nimble Storage, are very hard to get access to as a regular retail investor. In fact, this is often touted as one of the benefits of doing business with a full-service broker.

Marketplace for IPO’s

What’s going on? Why would a very traditional investment bank, especially Morgan Stanley – with its core strategic wealth management business – be open to equity crowdfunding that in some ways undermines its business model?

As part of broader development of crowdfunding – from new products (e.g. Kickstarter), stakes in startups (e.g. CircleUp, AngelList), loans (e.g. Prosper, Lending Club) – equity crowdfunding is finally growing in acceptance and importance.

lc logo newIn fact, the biggest FinTech IPO of 2014 offered an equity crowdfunding component: While underwritten by Morgan Stanley, LendingClub offered crowdfunding using Fidelity Investments (where I began my career).

In the case of Etsy, last week, however, Morgan Stanley used not the market leader, LOYAL3, nor Fidelity, but rather its own in-house global stock plan services (GSPS) capabilities, along with its platform partner, IPREO.


(Morgan Stanley is a leader in stock plan services from when Citi’s contributed GSPS to MSSB joint venture; Colbert Narcisse, the long-time leader of the unit is a well-known innovator).

Bottom line: From the conversations I’ve had with those who in this industry, what’s driving this change is increasing market validation of the role and value of equity crowdfunding.


Another recent success in the context of the IPO market is this month’s underwriting of GoDaddy, where LOYAL3 played the role of partner to enable retail investors to participate in IPO.

LOYAL3 is a great company that’s a “marketplace” for direct investing and getting access to IPO’s. Like many leaders in FinTech, it’s based here in San Francisco at border of the Financial District and SoMa, near Prosper and Lending Club. It’s the industry leader in its space.

LOYAL3 signs up companies – from tech companies like Amazon, Twitter, Yahoo, Facebook and Apple, to others ranging from Mattel, Hasbro, and McDonalds – so that individuals can buy their stock directly at low cost.

Direct investing in companies has been around for a while, however LOYAL3 brings innovations from its technology to make it easier to focusing on the “brand building” and relationship aspect of “investing in what you love,” its earlier tag line. It makes sense – an example of investor Peter Lynch’s rule to invest in what you know.

I expect to see LOYAL3 and others riding the wave of giving individuals access to low-cost investing and access to IPO’s in 2015 and beyond. Strategically, they might expand into the pre-IPO crowdfunding market (where CircleUp competes).

Regulation: Watch This Space

For those interested in this area, watch for the continued word on the final regulations and clarifications of rules for equity crowdfunding arising from the JOBS Act.  Recently, in fact, I tweeted a link to California’s draft crowdfunding framework:

Screen Shot 2015-04-20 at 5.26.12 PM

FinTech IPO’s to Watch in 2015

Although it’s really anyone’s guess as to which companies will go public, the legendary Morgan Stanley IPO team I saw at 2725 Sand Hill Road – including Andy Kearns, Dave Chen, Paul Kwan – will offer VC-backed tech firms advice on timing.

But based on public information I’ve read in the press, several of the big FinTech names are all considered strong contenders to go public in the next year, including Oportun (formerly Progresso Financiero), PayPal, Square and Stripe.


Others, such as Ant Financial (Alibaba’s finance arm) and Avalara, a cloud-based solution for taxes may follow: the pipeline for FinTech IPO’s will be interesting to watch.

Since today is 4/20, I’ll wrap up by saying when it comes to IPO’s:  I’ve Got Five on It. It’s not a lot of money, but the individual investor should be able to participate in this asset class, and hats off to those who make it happen.

Roll Video: Link