Welcome Arun to Daily Fintech

Arun (Arunkumar Krishnakumar) is taking over the Friday slot – where we cover how technology is changing consumer banking and finance around the world.

Arun epitomizes our mission at Daily Fintech, which is to create conversations that make things happen.

One reason why senior people give us their attention is that we connect the dots between Fin and Tech. We translate Fin to Tech and Tech to Fin. Arun is equally comfortable in both worlds, as a quick glance at his LinkedIn profile will reveal.

We do that all across the globe because “bits don’t stop at borders”. Arun is from India originally and currently calls London home. Arun has the experience and global mindset to cover innovation wherever it comes from, whether from hyper efficient wealthy economies such as the Nordics and Switzerland or from rapidly growing big population economies such as India and China (and all points in between).

Arun has a particular passion for impact investing.

FinTech is being driven by big agile companies as well as scrappy upstarts and the relationships between the two. Arun’s experience spans both. His big company experience includes Barclays and PWC. In his current role at Angels Unleashed, StartUp Bootcamp and Funding XChange, Arun swims in the world of the scrappy upstart.

Our mission is to enable productive conversations. Our Authors job is to ignite and facilitate those conversations. Please welcome Arun’s unique voice to this conversation.

Daily Fintech Author Search

Daily Fintech looking for two more expert Authors to cover:

  • InsurTech on Thursday.
  • Consumer Banking on Friday.

Our Authors are globally recognized thought-leaders in their domain who are often speakers and moderators at industry conferences and highly valued consultants. Writing for Daily Fintech will connect you with our highly influential audience (currently around 17,000 email subscribers and 7,000 Twitter followers)

Our Authors must be able to:

  • Commit to a weekly post within a specified domain and follow editorial guidelines.
  • Agree that there is no cash compensation and that Daily Fintech owns the content.
  • Be free from corporate policies that might constrain what they could write. We want free agents who want to build their knowledge, network and reputation in this big, fast changing market.

Key Attributes:

  • Domain experience. We look for people who know the subject from real work experience.
  • Intellectual Curiosity. We look for people who are “learn it alls not know it alls” and who recognize that whatever they learned in the past will change in the future.
  • A passion for explaining complex subjects in engaging ways. We believe that real experts can make complex subjects accessible to people who have little background in that subject.
  • You must post on the same day/time every week within your domain. WordPress has a scheduling feature, which makes this easy to execute.
  • Disclose any conflicts of interest, quote sources accurately and link to them, follow the usual rules about copyrighted content.
  • Our subscribers are senior leaders. Offer them something they cannot get elsewhere and respect their time.

Other information:

  • We encourage our authors to write in their own style. Making articles friendly and accessible is the best guide for developing a style.
  • There is no set length. Do whatever fits the subject.
  • Our subscribers are global. Today our Authors are in Switzerland and Australia. We would like new Authors in America and Asia, but any location is acceptable as long as you have a global mindset.
  • Post genre. You can do whatever suits the subject. You can do a trend analysis, interview (text or audio or video), single company analysis, landscape report. Whatever the format, offer new insight or knowledge that is helpful to subscribers.

We currently have 3 Authors:

Bernard Lunn, Daily Fintech’s founder, writes on Monday, Thursday and Friday. Bernard will continue writing on Monday but will dedicate more time to building the brand and the business. Bernard is a thought leader, serial entrepreneur, adviser and strategic deal closer. He started in Fintech before it was called that for companies such as Misys, Temenos and ITRS, as well as smaller startups.  Bernard is a published book author (Mindshare to Marketshare) and has used his media experience with companies such as ReadWriteWeb to guide Daily Fintech since the first post on 29 June 2014.

Efi Pylarinou, writes about WeathTech and capital markets on Tuesday. She brings bold Wall Street experience (Salomon Brothers, Bankers Trust, SGCowen) in a broad range of asset classes (fixed income, structured products, hedge funds). She has lived and worked in the US, France, Greece, Canada, and Switzerland in investment companies, a university, an online education provider, and an executive consulting firm. She brings a strong academic background combined with a focus on breakthrough results. Efi is the author of Fixed income books with Frank Fabozzi. She is a WealthTech expert.

Jessica Ellerm writes about Small Business Finance on Wednesday. She is based in Australia. In addition to writing for Daily Fintech, Jessica also works for Australia’s flagship Fintech startup and small business banking provider, Tyro. She is also a well-known expert on digital growth hacking and presents financial news and market updates for Australia’s leading online finance news provider, Finance News Network.

For more background on how we view Fintech at a macro level, please read this post.

Announcing our Chief Commercial Officer

I am delighted to announce that we have appointed a Chief Commercial Officer to grow our business.

Julia Spiegel brings lots of entrepreneurial experience in both the commercial and non-profit worlds, with a strong focus in brand development, marketing, sales management, and event planning. Julia is global in her experience and outlook, which is critical as Daily Fintech subscribers (over 16,500 as I write) come from 130 countries. Julia is an American, currently residing in Switzerland, having lived and done business in Singapore, India and the United States.

Julia is fascinated by how history and geography play a role in the development of different cultures. She brings an openness, respect, and curiosity to working across regional and business cultures, looking for common interests to unify groups towards shared goals. Julia is keen to help grow the Daily Fintech brand and business with a clear understanding of the value that our content brings to our readers.

Contact information:

julia at DailyFintech dot com

What Fintech exits tell us about the bubble question


During a few days in London last week, there was a disconnect between public bullishness and private bearishness. The hype talk on stage contrasted with behind the scenes talk about bubbles and down rounds and layoffs.  We have been trashing the Fintech hype all through 2015, so we are clearly not perma bulls and feel OK about now offering a positive point of view amid all the gloomy talk. TL:DR, there is a new sober realism, neither hype nor gloom.

Trashing the hype during 2015

In December 2014, Daily Fintech pointed out how few real unicorns existed.

In August 2015, Daily Fintech sounded a warning bell about the coming downturn and the crash of the “faux unicorns”

In October 2015, Daily Fintech wrote about how it was time for Fintech entrepreneurs to get real and focus on execution. We have reproduced that below as it was one part of a larger post about SIBOS.

In December 2015, Daily Fintech made two Predictions for 2016 that have already come to pass:

  • Momentum Capital (short term hype chasing) into Fintech will slow down
  • The strange inversion we saw in 2015, when private companies were valued higher (on paper at least) than public companies, will end in 2016.The headlines will refer to Unicorpses.

Fintech is leaving the Yellow Brick Road and going to Kansas.

Reposted from October 2015:

For years Fintech labored in obscurity. A few pioneers preached the message that everything was going to change. In the last 12 months the message was received loud and clear – as was evident at SIBOS this year.

It was a great journey “off to see the Wizard” on the Yellow Brick Road.

Some Fintechers remain stuck in the Yellow Brick Road era, still preaching the message. Investors have already got the message and it is time for Fintechers to stop preaching and start delivering.

This means heading back to Kansas (in the “show me state” of Missouri). This is when Fintech ventures have to show serious financial results. This is when focus shifts from prospects to contracts, from long term forecasts to this quarter, from pre revenue metrics to revenue, from revenue to quality of revenue, from revenue to gross margin, EBITDA & free cash flow, from forecasts to actuals. Many ventures are doing this, but too many of the new entrants seem to believe that hype is enough.

Some Fintech Trade Sale Exits over $500m 

$500m is the cut off point. We don’t want to contribute to Unicorn mania by focusing on $1 billion, but we also don’t want to track lots of small deals. Unless you have been overly profligate with capital or done anything silly with preferences, a $500m exit is a good result for both entrepreneurs and investors.

  • Skrill fka Money Bookers by PaySafe fka as Optimal Payments. Over $1billion but born in 2001 so another proof that value creation takes time.
  • Xoom (Paypal). Post IPO they were acquired by PayPal.
  • 360T (Deutsche Borse). Very little publicity for this great Fintech success story out of Frankfurt Germany

Some Fintech PE Exits over $500m

To an entrepreneur, a trade sale or a PE buyout is pretty much the same, particularly if trade sale has an earnout.

Ironshore (Fosun)

Fintrax (Eurazeo)

Note: both are cross border deals and both are tech enabled Financial Services (the same as Regulated Fintech after the Great Fintech Convergence).

Fintech Public Exits over $500m 

The valuation is calculated in April 2016, so after the market crash. We have only included ventures born after the Internet – so PayPal makes the cut but not Visa or Mastercard for example.

  • Worldpay.
  • First Data
  • Lending Club
  • Ondeck
  • MYOB
  • Square
  • PayPal
  • Ondeck

Notes. Worldpay is the big IPO success story in London, but it took 20 years. Only Square and Lending Club meet the Momentum Capital requirement of a Unicorn ($1bn in under 10 years).

Expect more Acquire Hire and IP exits

One Fintech exit in 2016 is Holvi to BBVA in March. The terms were not disclosed, which usually means the valuation was low. They had raised less than $6m in VC, so a low exit was probably not a disaster. BBVA looks like repeating what they did with Simple – focusing on the UX layer.

Expect a lot more of these. There are many great ventures (good market, good IP, good team) that simply ran out of time. You can only score a goal before the final whistle blows.

The Unicorn deadline is a big problem

It is always hard to build a hugely valuable business. It is statistically almost impossible to do that within the time constraints put on by Momentum Capital. There are some companies that got to $1 billion realized value within the 5-10 years but they are so few as to be statistical outliers. Even those that did so by getting out the IPO door usually suffered during the market downturn. The attempt to get to $1 billion valuation within the 5-10 years to keep Momentum Capital investors happy drove some entrepreneurs to make these 5 mistakes:

  • # 1: Focus too much on the concept story at the expense of execution. You can only sell concept at the first round of funding. Beyond that it is all about execution.
  • # 2: Accept egregious preference terms that only work out if that hockey stick projection becomes real. Any downturn in investor sentiment leaves you with a burn rate induced deadline to close funding and then if investors start not returning your calls you will have to accept a down round that wipes out your common stock.
  • # 3: Use aggressive sales tactics that cross a regulatory line. Think Zenefits.
  • # 4: Believe in your own story that incumbents are asleep at the switch. Some are, there are enough that are not to give you real competition.
  • # 4: Go to IPO before you are really ready for quarterly bottom line scrutiny. The effort to do this detracts from execution and that can lead to a vicious spiral ending in a trade sale where you get less than if you had done the trade sale instead of the IPO in the first place.

Big blowups

Lots of little young ventures fail. That is the norm. It is more significant when a venture fails having taken in a lot of cash. The two big ones in Fintech – Powa and Monitise – could leave you with one of two conclusions:

Either: the Fintech revolution is over

Or: these companies made some egregious execution errors and the problem is company specific.

The latter conclusion is more likely. They can both become part of entrepreneur business school “anti case studies” i.e. what not to do.

It is interesting to compare Powa and Monitise with Zenefits. The latter had similar egregious execution errors but took decisive action by replacing the CEO. It is in situations like this that those oft-reviled VCs earn their money.

Advice for entrepreneurs – check out RIP Good Times. 

This was the famous presentation given by Sequoia Capital to their portfolio companies in October 2008. Skip the macro stuff unless you enjoy history. The advice to entrepreneurs who took on a lot of capital and ramped up their burn rate is still relevant:

  • Get aggressive with public relations communication strategies; cut marketing that doesn’t work
  • Offer a product that reduces expenses and drives revenue
  • Preserve capital over trying to gain market share
  • Begin with zero-based budgeting to help prioritize necessary expenses
  • Have at least one year’s worth of cash available
  • Reduce expenses around products and boost sales; if product is ready, cut engineers (wow)
  • Build essential product features first
  • Reward salespeople based on commission, not base salaries

Getting consumer confidence has always been hard and it is harder in Fintech. Getting people to part with money is not the same as getting them to hit a Like or Retweet button.

Now for the good news

  • Fintech is no more overvalued than other assets. After years of central bank loose money everything is overvalued. That is not damning with faint praise. Investors work on relative valuation.
  • There is still a lot of cash waiting to be invested (“dry powder”). Entrepreneurs will have to accept lower valuations, but deals can get done. Investors of all types are looking for deals – VC, Angels, PE, Strategic Acquirers – but the price has to be right.
  • There have been some real exits as we outline above. That is real money where cashed out founders are now becoming angel investors.
  • The opportunity is real. Financial Services is 7-10% of GDP in major economies and most of it can be digitized.
  • The disruptive tech is real. More than 50% of the 7 billion people on this planet with mobile phones, artificial intelligence, Bitcoin/Blockchain – pick your favorite disruptive tool and have a go at that 7-10% of GDP.
  • The best ventures have always been born in down markets. You have a longer runway to exit and the costs are lower as the talent supply/demand equation changes.
  • The Q1 funding numbers look good and April has seen some good deals as well. Accel announced a new $500m European Fund.

I would class the current environment as more sober and realistic, avoid the extremes of both hype and gloom.

The exits lists are not exhaustive. Please tell us in comments who we have missed. The aim is to spot common patterns across successful exits.

Daily Fintech Advisers provide strategic consulting to organizations with business and investment interests in Fintech. Bernard Lunn is a Fintech thought-leader.


Announcing Daily Fintech Advisers

We interrupt our normal programming with a short commercial break.

The folks who bring you the free Daily Fintech content are:


leading your transformation and growth

Daily Fintech is an open source research platform written by entrepreneurs for entrepreneurs. You can tune in while we do our research in public – fresh analysis every day. This content will always be a free open source research resource for the Fintech community (some of whom contribute by “filling in the blanks” in our research).

Daily Fintech Advisers is the commercial part of our business (the site is ad free).

We work for three types of organizations:

  1. Financial Institutions using Fintech to drive transformation initiatives.
  1.  Fintech Ventures in their scale up phase moving into new markets.
  1. Tech companies moving into Fintech.

Our focus is market development. This could be your go to market plan for a blue ocean market or moving into adjacent markets or expanding geographically.

We are dealmakers who are 100% focused on Fintech.

We get deals done, but we always come at deals from a strategic point of view – so we focus on getting the right deals done. That is why we spend so much of our research on figuring out where the puck is headed. That direction will inform your strategy.

Deals that enable this market development could include acquiring a company, forging a partnership, acquiring clients, finding talent or raising capital.

We differentiate through;

  1. Domain Expertise. We have Partners who are experts in sectors within Fintech (e.g Efi Pylarinu in Investing and Rick Huckstep in Insurance).
  1. Thought Leadership. We create the conversations about where the puck is headed in your market because we believe that Mindshare precedes Marketshare.
  1. Cross Discipline. Our Partners understand financial services and technology and marketing/sales. We use all three to define and execute your strategy and to improve time to market.
  1. Network. We know who can turn your plans into reality. Our network is global. If we don’t already know the person/company, the Daily Fintech brand means that most people respond quickly when we reach out to them.
  1. Experience. Our Partners advise based on decades of hard-won experience. We are entrepreneurs and senior executives who know what it takes to make things happen.
  1. Partnering. Our philosophy is that wirearchy beats hierarchy. We choose to remain a small agile partnership so that we can execute by partnering with specialist firms and individuals.

Discretion and trust are our core values. We can initiate conversations on your behalf without revealing your name until you are ready. We build long-term exclusive relationships with winners in the Fintech market.

To start a confidential conversation, please send an email to bernard at daily fintech dot com or find us at one of the Fintech conferences.

Daily Fintech Advisers are:

Bernard Lunn is a serial entrepreneur who has done startups, scale ups and turnarounds in America, Asia and Europe (and now lives in Switzerland). In the past he has worked for Misys, Temenos, IMS and ITRS. He learned the digital media craft while COO of ReadWriteWeb. Bernard is the Founding Editor of Daily Fintech, wrote Mindshare to MarketShare (on Amazon), provides mentoring to startups and is a speaker and moderator at Fintech conferences.

Efi Pylarinou, covering InvestTech every Monday. Efi brings bold Wall Street experience (Salomon Brothers, Bankers Trust, SGCowen) in a broad range of asset classes (fixed income, structured products, hedge funds). She has lived and worked in the US, France, Greece, Canada, and Switzerland in investment companies, a university, an online education provider, and an executive consulting firm. She brings a strong academic background combined with a focus on breakthrough results. Financial innovation in the investment process is her focus.



Happy birthday Daily Fintech: notes on a digital publishing experiment

This post is not about Fintech. It is about digital media, specifically digital media within a niche domain such as Fintech.

I started Daily Fintech exactly one year ago when I made the commitment to write every day about a business that I knew very well and which was entering hyper-growth.

Here for the record is the first post. It is worth a read and as it had only a handful of page views it is quite possible that you missed it.

Daily Fintech was not much more than a hobby at the start. In fact it was not called Daily Fintech when I started; that seemed a bit presumptuous, because I did not know whether I could maintain the daily writing commitment. Fintech fascinated me and I had to scratch that itch and blogging was a way to learn more and connect to others in the market; that was the extent of my strategic plan at the time.

All I I knew was that if I kept to my daily writing schedule that it would lead me to somewhere interesting.

It did. A year later, the audience is growing strongly each month in both page views and engagement (email subscribers and people reaching out to the writers who don’t simply want to push a press release onto the media). This is a niche audience. It is not a populist subject and we don’t chase hot news, but it is a very influential audience – founding teams, VC Partners, heads of Innovation/Digital at big Financial Institutions, senior execs at big tech firms moving into Fintech.

A few months ago, I started to bring on board other people to write regularly. They are like me – entrepreneurs who blog rather than professional bloggers – and experts in segments within Fintech. Our tag line is

“written by entrepreneurs for entrepreneurs”.

Daily Fintech should not work in theory. We create original content that takes a lot of effort to produce. We then give it away free. Our content is free, open and ungated. Many choose to leave their email address in order to get a daily email, but we don’t push that in any way and it is certainly not mandatory. However Daily Fintech does work in practice because it leads to insights and connections and that leads to fee based projects and investing opportunities.

If something works in practice but not in theory, it is interesting to figure out how it works in theory.

The Daily Finech media experiment is about how to monetize quality writing/analysis. This question has fascinated me ever since I was COO of ReadWriteWeb in 2009.

Which is more valuable:

  • A post that gets 500 views from CIOs and VC Partners spending $ millions who influence how huge markets develop?
  • A post that gets 50,000 views from people who spend very little and have very little influence.

Logically, the answer is A. However the digital publishing business, monetized through advertising, has a very clear answer. It is B.

In short, the digital publishing business is broken. The business of writing software to aggregate free content is doing very well (Facebook iand Google are worth $ billions). It is the business of writing content that is broken. The word “content” annoys writers because it implies fodder for the ad beast – but that is the reality.

There is only one currency online – page views – that get converted to money via advertising. The problem is that companies who do not pay for content (such as Google and Facebook) set the conversion rate from page views to money (aka online ad rates). Writing has become a low paid job that you can outsource via Mechanical Turk (or program a writing bot to automate it entirely). This is like the 19th century artisans losing to the factory machines – except that writers can write about the problem ad nauseam as an alternative to smashing the machines.

I did not know how I was going to monetize Dally Fintech when I started. The early blog entrepreneurs such as Michael Arrington (Techcrunch) and Arianna Huffington (Huffington Post) and Richard Macmanus (ReadWriteWeb) cashed in early enough to not have to worry about how to monetize quality writing online. One company in the B2B niche of tech blogs – GigaOm – raised Venture Capital and worked all the angles (such as paid reports and events) and did it with great intelligence and diligence. The founder – Om Malik – loved the craft of great writing/reporting. Still they failed.

Digitization is remorselessly slamming all of the niche B2B media monetization techniques:

–        Advertising: ad rates are set by giant platforms that don’t pay writers (Google, Facebook etc). Niche means small audience = small $. Getting the balance right – paying writers very little and still getting quality content, chasing page views and still getting quality content – is very, very hard. Adblockers going mainstream takes a sick patient and gives it a big whack over the head.

–        Paid Research Reports: Somebody who has a market research business told me that there are two types of research. One is “know to tell”. The customer wants a big brand (Gartner etc) to validate what they want to do (never underestimate the CYA motivation in corporate life). Unless you are a big brand you are in the “know to act” game, aka actionable insight. This is when customers buy market research reports and don’t care about the brand; they just need it to be accurate and actionable. Entrepreneurs think this way. The problem is that entrepreneurs watch every $ of spend like a hawk and are good at aggregating all the free content online. So Paid Research Reports is viable but hard.

–        Events paid by Sponsors and/or Attendees. MeetUp is the digitization truck hitting this revenue line. There is still value in the mega events but these are expensive to create and only a few can be successful. You have to invest a lot of money to create events that people will pay to attend. This is not game for bootstrapped startups, nor does it have the highly scalable revenue model that VCs seek. So Events is viable but not easy.

What the digital media business has failed to do is monetize offline influence. You can track online influence through tools such as Klout. However you only have to think of a few hugely influential people who have no Klout score because they don’t self promote online. So I discarded the idea of trying to measure the influence of the Daily Fintech audience. The Daily Fintech Experts (aka Writers aka Entrepreneurs) know the influence by the quality of people who reach out. So, it works in practiceIt does not work in theory because there is no way to measure the real influence of people who interact with online content. Some entrepreneur will crack this problem; if you have the solution, I am happy for Daily Fintech to be an early adopter test case.

There is one example of a site where quality niche content is monetized very well without any of the normal media monetization techniques. That is a blog called AVC written by Fred Wilson (a Partner at Union Square Ventures in New York). He writes every day and has been doing that a long time. His daily writing commitment was my inspiration. I am sure he explains why he invests so much time in one his archived posts (which are a treasure trove for entrepreneurs). From the outside I can see that it works for him in two ways:

  • He gets more qualified deal flow because entrepreneurs can understand what he thinks about various subjects before they meet.
  • The “people formerly known as audience” provide crowdsourced research.

I am not running a VC Fund, so I don’t benefit from 1. However Daily Fintech is definitely working as a  crowdsourced research tool.

This is the counter intuitive thing I learned during my year as COO of ReadWrite (formerly ReadWriteWeb or RWW). The business side of ReadWrite was not exciting – get in enough ad revenue to pay the writers. So I agreed with the Founder (Richard Macmanus) that I could write about any tech subject whenever I wanted. I learned from this that if you have a high quality audience (which ReadWrite did) and if you do enough research to not look silly, the real experts will pop up out of the woodwork and tell you what you missed. They then become part of your network that you can reach out to when you need insights into that specific subject. As the old saying goes “it is not what you know, but who you know”.

That is why I refer to the “people formerly known as audience”. Audience implies a passive, lean back, traditional media experience. I could just say “community” and that does sort of capture it, but the term has become over used.

I now call Daily Fintech a “market intelligence platform” as a way to describe the value we get from this crowdsourced research. We use this platform as part of our Daily Fintech Advisory services. The content is the free in freemium.

This is only my baby’s first birthday and I don’t yet know what it will become as it grows up. Like any startup, it is an experiment to find product fit to market and I can only promise to keep iterating on that journey – and to report back on the second anniversary.