Trends Watch: FinTech

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Radboud Vlaar, Managing Partner, Finch Capital.

What is your outlook for VC? 

Our view is that outlook for venture capital remains strong, but interest will shift in the U.S. and Europe to more ‘nuts and bolts’ type of companies, e.g., more B2B or B2B2C away from the B2C side; and to companies that have more sound unit economics. This trend was already happening, but we expect it to be even more accelerated now. Additionally, as IPO markets are likely to be closed, or at least more selective for the next three-five years, trade sales to strategic and other technologies will be more the norm. We expect a growing role of Asian buyers as they have more cash and price-to-earnings power post this crisis, as Asian stocks and economies, historically, seem to come out of crises relatively stronger. 

Where do you see the greatest opportunities? 

Artificial intelligence (AI), the internet of things (IoT) and fintech present the greatest opportunities within our investment focus. Outside of that that, we see the greatest opportunities in Indonesia which is on its path to be the 4th largest economy of the world.

What about the biggest challenges and why? 

Cash management is a big challenge. Generally speaking, technology companies are not good at cash management, with many of the current founders having operated in a world were raising cash is one of the easier tasks, and their main focus is ultra-high growth, with cost control not a significant factor as long as the business was growing.

What keeps you up at night? 

Irrational fear and panicked behavior of people both keep me up at night. In addition, both investors and companies during this crisis that may create surprises also keep me up.