Sheel Mohnot: From Management Consulting to Taking on the Fintech World

Speaker A: There are a lot of things that we as consumers go through that feel like they could be more efficient. And uh, I thought, let me dedicate my career to do this and I think there's a big opportunity there.

Speaker B: Welcome to the Next Gen Banker podcast where we explore what's next in banking and talk with the innovators responsible for creating positive change in the financial sector. I'm your host, David Reiling and have a big treat for everyone today. So we're going to welcome Sheil Munat. Uh, Shiel, thanks for being on the NextGen Banker podcast.

Speaker A: Thanks for having me. Excited to be here.

Speaker B: Cool. Just a little reminder for our audience, uh, hang out at the end of the episode. We have a musical feature at the end of each episode covering a wide, uh, genre, uh, around the globe. In terms of music, uh, we have some pretty cool features in my opinion. So remember, uh, to check that out. And so, uh, Shiel, co founder, uh, Better Tomorrow Ventures, uh, venture capital firm, uh, investing in fintechs. Uh, you worked as an investor in Fintechs for the past eight plus years as far as I can see. And before that, uh, looked like you worked on, uh, maybe your own venture in terms of thistle in the plant based, healthy, uh, food industry. And obviously you're no stranger to podcasts. And I have to mention the pitch podcast because, uh, I'm hooked. I am hooked. I started listening to it when I found out or learned about you and the podcast and I'm having a blast with it. So I know it's a shameless plug, but it's coming from an authentic place so it's really fun to hear. So that's cool. So just a little dive into your journey as to how you got to fintech. You didn't start out obviously in this industry. So what kind of drew you into this crazy world of fintech?

Speaker A: Yeah, so I started my career in fintech actually on the nonprofit side. So, um, back in 2006, I was a 2005 6, I was a management consultant and wanting to do something different, I saw this cool new idea for a website that let individuals in the developed world make loan to individuals in the developing world for the sake of alleviating poverty. And it was called Kiva, Kiva.org, k I V A. And I thought this is really cool. Um, we can really help people, um, and you can do so from the comfort of your home. And it's kind of a fun, addicting thing to give people a small amount of money towards, uh, whatever they're trying to do and you can be really catalytic to their life. So like you can help them buy an irrigation pump for a farmer in Uganda, you know, like that kind of stuff. You know, that was, I didn't think about fintech at the time and actually very few people did. The word, it wasn't really right, it

Speaker B: wasn't coined yet, as you know.

Speaker A: Um, but that was, that was my first foray. And uh, after doing that I ended up back in consulting, uh, as I was at bcg serving financial institutions. Um, so I was working with banks, insurance, uh, companies, payments companies, that sort of thing. At that point I thought, okay, that's when I thought, man, there's a big opportunity here. Um, financial services are like 20% of global GDP and it's a inherently digital thing. It's numbers. And so the merger of finance and technology is sure to come, but it hasn't yet. And there are a lot of things that we as consumers go through that feels like they could be more efficient. And uh, I thought, let me dedicate my career to do, uh, this and I think there's a big opportunity there.

Speaker B: Yeah, um, that's fantastic. And yeah, I totally understand the um, the addiction and fascination with Kiva at the time, I have to admit, I was in the same type of camp. Um, cool, gosh, especially in my opinion, harnessing the power of that technology to do good and letting everybody participate. I mean you can basically democratize good and give them a platform to do it and put their money where their mouth is in such a way. But, um, I thought it was great. I thought it was fantastic. Um, so let's take us on a little journey with your perspective. So going back from, let's say, the key days forward, I'd love to get your perspective on two things. One is, um, the journey that we've been on relative to fintech in particular. Where do you think we are today from an investment perspective? Right. Love to hear that secret sauce. But you have a global mindset and I would love to hear where you see fintech around the globe. Compared to the US I suppose. What does Asia look like? What does Africa look like? Um, compared to the U.S. but let's start with this. Fintech, particularly on the investing side, past and present. What do we look like?

Speaker A: Yeah, so I mean as we talked about, fintech wasn't really a thing 15 years ago. The word really started getting used about 10 years ago and really has uh, grown significantly and we were on a pretty like straight line, upward trajectory I would say from about a decade ago. Until 2019. And then um, in part due to Covid and zero interest rate environment, um, we really spiked and spiked hard. 2020, 202021 was just wild M. Every one of our companies was raising money, ah, at some just absolutely bonkers valuation, uh, but also they were doing well. Many of them were selling into other fintechs who had also raised money at a crazy valuation. So these companies were doing just super, super well, but also had raised too much money. And in some ways it felt like when everybody becomes a fintech investor, that's actually bad for the sector. Um, there's a bit of prisoner's dilemma where you don't want everybody to do it because it becomes a crowded trade. And in our world, a crowded trade. An example would be I'm building a company, uh, or uh, we invest in a company, let's say. Then instantly there are like four or five other companies doing the exact same thing and they're all well funded, they're all great entrepreneurs or good entrepreneurs at least on paper. And what that means is it's just harder for any one company to be successful because you're sort of selling into the same customer set and it becomes very hard. So now, um, we went from being the bell at the ball two, uh, years ago to falling completely out of favor. And it happened rapidly. There was this whiplash uh, from 2021 to 2022. And I'd say I'm still as excited as I was a few years ago. Um, probably not as excited as I was in 2021. I think like a lot of folks, I thought, okay, man, as an investor we're geniuses. Everything we invest in turns to gold. And of course that's not really true. But um, you know, I think the things I believed then, uh, which were what we talked about, financial services are inherently digital. They're still not as touched by technology, there's still opportunities to improve. Um, all of that stuff remains true. And so I'm excited and I think really the way to look at it was just we had a two year blip. 2020 and 2021 were just this crazy blip and we're kind of reverting to the mean, which is an upward trajectory. And I think there's that famous chart of E commerce growth where you're on a line and then it's this crazy upward slope. And you could have invested thinking that upward slope was going to continue trending upwards. But the reality is that 2020 upward slope did not continue turning upwards. And we're on the same Upward trajectory that we were at 2018, 2019. So that's how I feel, don't you think?

Speaker B: I mean, as maybe painful as it is to experience, but you kind of, you shake out a little bit of the crazy or some of the irrational money and now you're a little bit back on. I would agree with you. I think there's just enormous opportunities and the question obviously, which are the right ones? But it seemed to be getting a little out of hand. Like anything with a business plan seemed to get funded. So it seemed a little, I don't know, irrational to me.

Speaker A: But backseat driver definitely seemed irrational to me too. Um, not to say that we don't have our own irrational companies in our portfolio. We do, but I think largely we stayed.

Speaker B: We stayed largely saying, okay, no, that's great. So let's just take a lens. Let's just zoom out a little bit from a global perspective, again, uh, you know, just from your view, how does fintech in the US in your mind compare to like Africa. Ah. Or to Asia? I'm just curious. I'm always curious. It seems like they're moving faster and I'm always like, what can we do to move faster?

Speaker A: But yeah, they are moving faster. Africa and Asia are different. Let's start with Africa. Africa, um, in some ways here we're constantly telling regulators like there's too much regulation on what we're doing. Um, it's funny, in Africa, it's actually the opposite. There's not enough regulations.

Speaker B: We need some guidelines.

Speaker A: We need guidelines and you need to stop bad actors because they're making us, the good actors, look bad. And if consumers can't, um, trust what's out there, then they're not going to believe us, the same way they shouldn't believe these other companies. So, um, that's happening in Africa. Um, but there's tremendous growth in both Asia and Africa. There's just tremendous growth of middle class. And they really are starting from a place that's much worse than where we're starting from. We have healthy card penetration. We have a pretty good banked population. But if you're starting from a unbanked population, you can grow a lot faster getting people into the formal financial system.

Speaker B: Yeah, I would agree. Uh, it, um, working in that space of the UN and underbanked and underserved. It is. Um, but again, to your point, the trust factor, very important in terms of scaling a business in that. So let's move on. Again, an entrepreneur at heart here, um, in, uh, the owner of the bank. So I Think in terms of this mindset. So I have to go back to the pitch podcast, um, because I do think it is a rudimentary skill for almost everyone. Now, granted, I'm an entrepreneur, so I think in this terms. But you're listening to pitches. Um, in your background of the pitch podcast, are there some elements that you listen for in terms of a good pitch or the quality pitch or maybe the difference between investing enough?

Speaker A: Yeah, totally. So there are a bunch of things that you see that are just like red flags. The one that irritates me is people who just haven't done math properly. I'm kind of like a math nerd, so I quickly am able to do it. And if. If these folks have been thinking about it for a long time, they should have these numbers top of mind. Um, I think other people just haven't prepared and they don't know their competition. They don't know, like, what we invest in or who we've invested in. And I think the best folks know that stuff quite well and can speak to it. And the other thing is, I think a lot of folks, um, get stuck behind measuring things and getting excited about things that frankly do not matter. And we, you know, we really want to think about where is the business going, what matters, like, if you won some magazine award, that's great, but, like, I don't care as an investor. Like, I want to see something that's going to drive towards becoming a big business and ultimately, you know, driving ebitda.

Speaker B: Right, Exactly. Um, yeah. Know your audience for sure. Know your numbers, Totally agree with that. And it's so interesting to hear when you're listening to the podcast. But if you're, if you have an ear for math, particularly you can you really pick it up quickly? Um, it.

Speaker A: It's absolutely.

Speaker B: So. All right, so I have to take a somewhat of a left turn and I'm going to start with some congratulations. Uh, I think you may know where I'm. But I kind of can't get through this conversation without talking about your recent wedding. Um, which is fantastic. And you won. You and your wife won a contest to have your wedding in the Taco Bell metaverse now. That's correct. I just, I need to take a breath in that and go, wow, that is fantastic. Um, and one a wonderful mate because she obviously gets your crazy to some. Regardless. But tell us a little bit about that. How does that happen? And how was it?

Speaker A: Yeah, so, okay, so how it happened? Um, it was. So we got engaged, uh, last August, and, uh, shortly afterwards, Taco Bell had this contest, um, that they wanted to choose one couple to get married and Taco Bell Metaverse. And people kept tagging me on Twitter, hey, you should do this.

Speaker B: You should do this.

Speaker A: And I thought, um, okay, this is interesting. I'm a fan of Taco Bell. Don't really care for the metaverse that much, but I'm a fan of Taco Bell. But is my wife going to come? My then fiance. And, uh, so I brought it up to her. We were on a road trip and she said, hey, you know what? Like, it'd be fun. You had to make a two minute video. It'd be fun to just make a two minute video. We were on a seven hour drive, so we spent like 20 minutes penciling out what we would say on this video. And then we stopped for maybe 10 minutes and recorded a video. Uh, and then we didn't think we were going to submit it. We were like, it was just kind of a fun exercise, a mental exercise. What would you say about ourselves? And then we thought, uh, you know what? We came back from road trip. We thought, you know what, let's just submit this thing. Who knows what's going to happen? So we submit it, and then Taco Bell gets in touch with us and they say, hey, we've chosen you. And we thought, okay, uh, we don't know if we actually want to do this. What the hell is the Taco Bell Metaverse anyway? Um, so they tell us, no, this is going to be your wedding in this metaverse, Decentraland we've chosen. And it'll be fun. You'll get to do whatever you want and all this stuff, and you'll be part of the Taco Bell family. And when they said Taco Bell family, I said, I'm in. Uh, and so, you know, over the course of the next four or five months, um, we plan the wedding together with many folks from Taco Bell and their. And their ad agency as our, uh, wedding co. Wedding planners. And we're both Indian. Myself, uh, m. And my wife and we decided to do an Indian wedding in the Taco Bell metaverse, which sounds absolutely crazy. Even. Even now that I've heard it so many times, it still sounds crazy. Um, and we had a bunch of Indian things. We had, there's something called a bharat, which is, uh, the groom rides in with all of his friends dancing around. And I came in on an elephant in this metaverse. And I have to tell you, um, the elephant was a big ordeal, actually. And ultimately Taco Bell told Me, it cost more to build this elephant in the Metaverse than, uh, it might have been to just get an elephant at a wedding. And, uh, it's because there was no concept of writing. They had to engineer the concept of writing an object.

Speaker B: Oh, wow. Ah.

Speaker A: And it was really fun, the whole thing. It sounds crazy and it sounds stupid, and in many ways it was. But we have really had a good time with it. Our friends from all over the world were able to attend. We had a group where people were sharing stuff, and it was really fun. We loved it.

Speaker B: Yeah, I, uh, smile every time I think about it. And, you know, since, uh, you brought this up, the one advantage that I did not think of is especially family members across the globe and friends across the globe can, can witness it or participate it or, um, at least engage in some way, shape or form so you can really open it up. Um, but I have to, I have to bring up maybe the more sensitive subject in that. I have several friends of Indian descent. The, um, their parents in India. Uh, it's very much a family driven. There's intensity around the marriage, in my opinion. For my. It's like, how did you sell them on it would be the question I have for you.

Speaker A: Yeah, uh, great question. I mean, number one thing is I'm old and they were just like, get this guy married. They've been trying to get me married for 15 years plus.

Speaker B: Yeah.

Speaker A: So, you know, they were like, okay, he's crazy. We always expected something crazy from him. Let's do it. The other thing is, um, this was actually, this is our legal wedding. This Taco Bell Metaverse wedding was our legal wedding, but it actually was one of five, um, that we have this year. So we started out the year in India. It wasn't a wedding, but it was a wedding related event where our families meet each other. A lot of my family in India can't come to the US for visa reasons and frankly couldn't afford it. Um, so it was an opportunity, something for them. Then we did this talk about Metaverse wedding two months ago in end of February. Uh, and then, uh, in July, we have a wedding at, uh, my wife's family's place in Cleveland. And then we have the one that we're most excited about in Mexico in September, and then one where I grew up in November. Uh, so it's really quite, uh, quite a lot of celebrations that, you know, that appeased our parents.

Speaker B: Yeah, I get it. Okay.

Speaker A: You're absolutely right, though.

Speaker B: Well, thank you for sharing that. Um, I was just wondering how that would fly in my family, and I couldn't quite get my head around it. Um, all right, so, Sheila, I have one final question for you. Uh, so please indulge me in this. So with your mindset and background, what does the next. This is a hard transition. What does the next generation of banker look like in your mind?

Speaker A: Yeah, so I really think there's, you know, we talked about this merger of, uh, finance, uh, and technology not yet having happened. Um, I believe that the next generation of banker doesn't necessarily look like, like the old generation, which I think relationship banking probably is here to stay. And I think that makes sense. I think commercial banking is here to stay, but I think it maybe looks different. And I think if we think about a small business these days, they are operating in some software world where they have some system of record, some operating system for their business. If it's a restaurant, it could be toast. If it's a yoga studio, it could be mind, body, all these other things. And we think that those companies are, well, set up to also be a portal into your banking journey. And, uh, I think bankers that work in an integrated fashion with that system of record will be better than those that aren't. And that system of record might actually have more information than you could possibly have as a bank. And I think that that's one element of it. Um, but I think in general, um, there's a lot more software that's going to be used in banking. And, uh, I think some of the banks are recognizing this and moving forward. And I think the big banks are building their own teams. I think the smaller banks, um, are working more closely with vendors.

Speaker B: Yeah, that's a good assessment, but I agree with you in terms of, um, the software and what it's telling us and the data that comes out, um, makes for a different banker, um, and hopefully a better one that's more informative and consultative and quick, um, just given today's world. So, uh, very cool. Well, Sheil has been super fun to talk to you today. Thank you so much for your insights and sharing a bit of your personal story with us. Uh, Ben, delight to have you on the NextGen Banker podcast.

Speaker A: Thanks for having me. It was really fun.

Speaker B: Cool. And for our audience, thanks for listening to the Next Gen Banker podcast and we will see you soon.

Speaker A: For this episode's musical feature, we're showcasing our Virk. Our Virk is Darren King, flexing his skills as a producer with a tasty mix of beats and synths, determined to inspire movement. Here is Love U by Artver.

Speaker B: Sam m. M.

Speaker A: That was Love you by aardvirt. You can find more of aardvirt's music on Spotify. If you would like your music featured on the next job uh Baker podcast, email davidextgen-banker.com with a link to your music and website. Thanks for listening to the next gen uh Banker Podcast. We'll see you soon.