
Bain Capital Ventures’ Kevin Zhang: The ‘Unlockable Potential’ in Lending, Investing, and Insurance
Kevin Zhang, partner at Bain Capital, assess the technological tailwinds for emerging players in lending, investing, and insurance....
Amy Cheetham~quoteblock
My focus is primarily on seed-stage B2B fintech companies, which encompass everything from fintech infrastructure to payments to application-layer tools such as CFO software suites.
We’ve seen a slow transition from banks as the only providers of financial services to more innovative offerings from fintechs becoming much more commonplace.
This evolution is still in the very early stages. We’re finally entering an era where banks’ monopoly on financial services is over.
Banks have become extremely vulnerable — they’ve lacked innovation for years and have taken their customers’ loyalty for granted instead of investing in new products and services. This has left them exposed and many are now playing catch-up to try to plug the hole that’s been opened by tech companies who are stealing their customers.
We’re slowly seeing the flow of money transition from being completely controlled by banks to being spread out across many types of technology companies.
All that said, we are still very much in the early innings of this transition. One data point that exemplifies the nascent nature of this market is that, while numerous neobanks have been launched in the last decade, only roughly 11% of the US population has a digital-only bank account. There is so much work to be done to provide far-reaching access to tech-forward financial products here and across the globe.
Q: How are you approaching your contrarian view on fintech investing into LatAm markets such as Brazil?
A: We’re continuing to be bullish on emerging markets while others are retreating. We believe the fundamentals in countries like Brazil remain strong despite weakening economic conditions in other regions. They’ve weathered high inflation and interest rates many times in the past and are set up well to prevail again. They have a highly collaborative regulatory structure that we’re confident will continue to promote and support innovation in the financial services industry.
Q: How do you decide involvement in a market where there may be several regulatory and consumer-dependent risks?
A: Building a company that will create long-lasting change in the financial services industry requires unique insights into a corner of the market that hasn't been disrupted effectively, combined with a differentiated distribution strategy. It's rare to see real innovation - often what we see are slightly updated versions of a previously created business model or strategy. When I see a truly distinct and novel idea, combined with a strong team with deep industry expertise capable of navigating the complexities of the regulatory environment, that's when I get excited.
Amy Cheetham~quoteblock
Look for more fintech products that specifically address underserved SMB markets. “I believe that SMBs remain a technologically underserved category,” says Cheetham. "Financial services targeting SMBs are still in need of continued innovation and investment. This has long been a core part of my thesis since I started investing back in 2015, and was part of the reason we led a Series A in Podium while I was at Summit Partners, which helps to provide payments to brick-and-mortar SMBs."
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Technology, innovation, and the future, as told by those building it.