Keeping a Finger on the FinTech Pulse

Speaker A: Foreign.

Speaker B: Hi, everyone, and welcome back to the Wharton Fintech Podcast. I'm your host, Megan McGowan. Today I'm joined by Ilana Lamonta Vilkova, an investor and writer who brings a really unique lens to fintech. She spent time on both the venture and institutional side of finance and built a strong following through her Forbes articles and newsletter where she breaks down everything from AI and finance to global fintech trends. In this episode, we talk about her journey into vc, how her global background shapes the way she thinks about money, what she looks for in founders, and where she thinks fintech is actually headed. We also get into emerging, uh, markets, the future of the finance function, and what people still get wrong about this space. Ilona, it's great to have you on.

Speaker A: M.

Speaker B: And thank you for listening to today's episode of the Wharton Fintech Podcast. If you enjoyed the show, please leave us a review and give us a follow on social media. We appreciate the support and hope that you'll continue to spread the word to more listeners. If you'd like to keep up with all the content from our fintech community, please subscribe to our podcast channel and find us on X, LinkedIn, Instagram, and Medium Orton Fintech, where you'll be able to find articles, interviews, and much more analyzing all aspects of the fintech industry. As always, thank you to Elona and until next time, this is your host, Megan McGowan. Hi, everyone, and welcome back to the Wharton Fintech Podcast. I'm your host, Megan McGowan. Today I'm joined by Ilana Lamonta Vilkova, an investor and writer who brings a really unique lens to fintech. She spent time on both the venture and institutional side of finance and built a strong following through her Forbes articles and newsletter where she breaks down everything from AI and finance to global fintech trends. In this episode, we talk about her journey into vc, how her global background shapes the way she thinks about money, what she looks for in founders, and where she thinks fintech is actually headed. We also get into emerging, uh, markets, the future of the finance function, and what people still get wrong about this space. Ilona, great to have you here. Thank you so much for joining us on, um, the Wharton Fintech Podcast.

Speaker A: I'm thrilled to be here. I've been a fan of the show since you guys started. Uh, so it's so exciting to finally be a guest on your show. Thank you for having me.

Speaker B: That's awesome to hear. Um, maybe for our audience, could you start us out? You've had a really interesting Path through venture and fintech. Maybe. Can you walk us sort of how you got here?

Speaker A: Absolutely. Um, yeah. So by way of personal background, uh, I was born in Cuba, My dad is from Cuba, my mom is from Russia, and we immigrated to the United States when I was five years old. And um, I grew up in the most logical place that a Cuban Russian immigrant would grow up, which is Louisville, Kentucky. Um, yeah. And so that was a really interesting experience for me because I like to say that it taught me a lot about like listening, observing, translating, um, like cultural context, language. What I learned through that experience though was that by listening and by observing I noticed that there's certain patterns you pick up on that might become less obvious to other people. And that really instilled in me like my interest in finance investing because I was always kind of observing how things were interconnected. So, so with that context I decided to um, apply to Penn and I got into the Hudson program, um, which as listeners might know is a dual degree program between the Wharton School and the College of Arts and Sciences. My target language there was German. And so I picked up, um, German as my fourth language after studying abroad in Berlin and Munich. And from there I started my career in technology working at Netflix for three years. Um, by way of context, the time I joined the company in 2012, we were still shipping DVDs, we were just about to launch originals and we were um, figuring out how to solve international streaming and where to expand to next. So in hindsight, a really formative, um, and transformative time for the company as well as for myself personally. Um, and that way, I think in hindsight really is what instills in me a passion for technology, for innovation and for seeing what it takes to build a best in class tech firm. Fast forward. Um, over the years I've worked across every part of the capital stack. I've worked in private equity, corporate, corporate development. I've been an allocator, um, at an institutional foundation and more recently an investor on the early stage side focusing on pre seed and seed opportunities. So that's a little bit of my professional career. Um, and then personally or uh, as a hobby, a demented hobby one might say, I started really being interested in writing about finance during the pandemic because I kept having friends come up to me and ask questions like, oh Alona, I'm like so embarrassed to ask this or admit this, but how does, you know, how do I do this in my 401k, like what's an ETF? What should I be doing? And so Kind of being the point person for my friends for their money anxieties is what inspired me to just first start writing about finance in a very explaining, educational kind of way. And over time, that's evolved into my fintech column for Forbes, where I cover some of the most exciting fundraising and company announcements, oftentimes before they hit Bloomberg or the Wall Street Journal. And it's also, um, taken me to my own podcast called Money Memories, that's distributed on npr, where I talk about people's earliest experiences with money. So, all in all, it's been a great way to kind of connect within different parts of the finance ecosystem while also working professionally within that space, too.

Speaker B: That's awesome to hear. So you talked about being at Netflix sort of the early part of your career. What really was that turning point moment from pure tech into more of this finance and fintech, uh, space? Was it truly just Covid and the, the experience around that?

Speaker A: Yeah, um, yeah, I think Covid certainly was like a catalyst, um, or, yeah, Covid was certainly a catalyst for that. In hindsight. I've always been, um, a good writer in, in high school and, you know, even before. And Penn, certainly at Penn. Uh, my strength was always as a writer. Uh, so, like, I love. I enjoyed writing essays, I enjoyed writing my thesis, but it was because I studied economics, international studies. I never, I never thought I would become like a writer. It was just, you know, part of my job, a part of my studies was to distill information, um, and, you know, especially working in, uh, financial planning and investing. I think sometimes people don't always, uh, assume or understand, like, how much, how much narrative is involved. Um, and I remember, like, oftentimes, um, when I was working in private equity, yes, building the model was like, super important, but. But more important than that was an investment committee presenting the case, um, on market comps, on the team dynamics. And those were really, really, I think, formative experiences for me. Um, and I had to always remind myself, if I was going into an ic, for example, to be like, there were so many times I would spend all night on this model. And then the first question, okay, who are the competitors? And I would just stare blankly. And I was like, right, it's like the bigger context of things, right? So I feel like this three. Throughout my career, there was always kind of that underlying, yes, I work with numbers and data, but for anyone to care about numbers and data, you have to present them in a way that makes sense. You have to present the story around it. And so in hindsight, it all Seems like all the pieces were there, but it was really like Covid and the pandemic where I had. It was a different time. I had much more time on my hands. Suddenly working, uh, at home, I have all. I was like, what am I doing? All this free time? But I had all these ideas. And so it's. It just felt kind of like a natural confluence of, okay, people are. Keep asking me these questions. And I think, you know, the one thing I'll say about the COVID times, too, which is crazy to say, like, the COVID times, because it really feels sometimes like it was so recent, but there was so much financial anxiety, right? We had, you know, like, the government was having programs to, like, set, you know, for, like, emergency savings, um, and people were relocating and not understanding, like, what are the tax implications. So I think it was like a. In addition to, like, health anxiety, there was a lot of, like, financial anxiety that people were feeling at the time too. So I think that that being at the forefront of my mind, um, and having the experience that I had breaking down really complicated financial models lent itself really nicely to then explaining things like, Here's a Roth IRA. Here's a 401K. And to be honest, it was a great journey for me too, as, uh, an education, because it was a time where I was able to sit back and reflect around my own, like, personal finances. I was like, 30 at the time, and I was like, okay, like, yeah, like, what have I accomplished? Um, financial. Where do I stand? So it was just kind of like a perfect, um. Yeah, the perfect storm of, uh, factors.

Speaker B: That's awesome. And you mentioned you do some writing for Forbes. You have your own newsletter. Um, you've always sort of been a writer. What was that transition like from writing in an academic setting or a professional setting to writing publicly? How did you decide to do that?

Speaker A: Yeah, that's a good question. Yeah. So as you mentioned, I've been contributing fintech writer for Forbes for almost six years now. I started my newsletter, Bear in the Bull, initially as, uh, a year ago, initially as a way to connect my, my podcast audience with my Forbes audience. Because I realized, hey, like, I write about fintech innovation here, I talk about personal finances here. I have an audience, but they don't. Like, they don't hang out with each other. And so my initial vision for my newsletter was to just, like, if my audience was in two different rooms, was to open the door and. And then asked them to. I was like, hey, hang out with each other. Cross, cross the room. See if you Guys like each other. But that evolved into being its own. Like, now I write about tech and culture, so it's evolved into its own platform, which has been incredible. And it's opened up so many opportunities for me. But in terms of the shift from, like, academic writing into, like, maybe, like, more personal finance blogging style and into more of, like, the editorial writing that I do today, um, it's interesting because, like, as I mentioned, I studied economics, international studies. I wrote a lot of essays, but by no means did I study journalism. Um, I did. Even when I was at Penn, I remember, like, the feedback that I would get on my writing from professors was that I had a very distinct, like, voice as a writer. Um, I remember one of my classes, and it was in ethics, and it was taught by a law school professor. And I was so intimidated because in my opinion, like, lawyers are the best writers. And so it was like our first essay for the midterm, and they were giving us feedback, and they gave it to us in person. And. And I was like, oh, my God, this is going to be terrible. They're going to sit here and be like, okay, that was cute. You put together two words. Um, but I'll never forget, the professors sat down and they said. They sat me down. They said, aluna. They said, um, is English your first language? And I was like, no, it's Spanish. And then I'll never forget, he goes, the professor said, you're prose. He goes, I could weep. I never forget that. He goes, I could weep. This is so beautiful. The sentences are punchy. And I was like, what? I remember, I was like. I was like, this is like a fugue state I'm in because I've always enjoyed writing, but I've never gotten that kind of, like, wow, like that. I have, like, a distinct voice. And so I think that was really formative for me, hearing that kind of feedback. And so that kind of gave me a confidence that I can. That I can actually write. And I do write well. And so I think then many years later, when I started writing personal, when I started writing as a blogger first, before becoming a Forbes contributor, I always had a unique point of view because I knew that I had a specific voice. And I also just felt confidence in the written word. Um, and so, uh, how I came to Forbes is actually just applying through the contributor program. At the time, there was just a link. You applied, you sent some writing samples. And so because I started writing on personal finance, I sent some samples. I interviewed with the editor. I shared. I was working at Vanguard at the time. And I shared some perspectives on, like, they're like, if you could write a story today, would you write it about? And I was like, oh, I guess payments at international markets or something. And they, they gave me that beat. But I definitely, like, this is a lot of words to say that. What I've learned throughout the years is like, writing or the act of creating something is something like, um, something that the Forbes editors always remind us of is like, you can't just like, sit there and wait for an, a brilliant idea to come to you. You just have to keep writing. And I think that the difference then, like, I really increased, like, my velocity and my volume of writing, and people are like, how do you keep up with it? But I'm like, really? In a perverse kind of way, the more you write, the better at it you get, and the faster you can come across with that point of view. So that's a long way of saying, like, I, I, I just, maybe it's a, I think Lin Man, Lin Manuel Mirando once said something like, if you're an immigrant, then you're a writer. Um, and without going too deep into that, I think there's something to it.

Speaker B: That's awesome. And as you've sort of picked up your velocity, how are you deciding on what topics are really worth writing about?

Speaker A: It's such a great question because, um, having a platform like Forbes and NPR means that suddenly you're on the radar of a lot of PR people. And again, as someone who works in finance and not media, I had no idea what was happening when my inbox was getting flooded with talk to this person. Can I have 30 minutes here? Um, and so it's really been like trial and error. So I've learned over, over the years, I've learned that while it's wonderful to have PR be on the radar of PR people, and I've been able to speak to companies, massive companies like Capital One, MasterCard, Visa, you know, by virtue of, uh, some of these relationships. I've also seen that, like, some of my best performing content is ones like, for example, like, last year I wrote a story based on my experience as a homeowner where I was, I think the headline literally was like, have you noticed that houses are kind of old? You take away. Um, but it was just like an observation on the state of the market. Um, I had, you know, I did a little bit of research. You know, the average home inventory, age, like the condition of houses hitting the market and prices. And that was my best performing article. But like that went pretty much like viral almost. And so uh, to your point of like how do I determine? I would if I knew. I've tried to replicate formulas, I've tried to regulate hooks, but I found that it's kind of like at the end of the day it has to also be fun. And so it's a balance between uh, seeking out guests who I think are in companies that are doing really meaningful work while also having a perspective on, you know, being really observant of what I'm seeing around me and recognizing that the more I spend time in these spaces the more that even just like my experience as a woman, like as an immigrant in these places, especially for fintech, that's enough too. We're uh, just like experience. Like I can tell you, for example, like, oh, like I think I wrote an article for a couple like last year about how a lot of um, marketing and advertising for fintech products is still very centered like towards men, even though like women are obviously all seasons of fintech. So I've kind of leaned into like trusting my own experience and my own voice and instinct, balancing that with getting access to really fantastic people. But um, it's more of an art than a science for me.

Speaker B: That's awesome. And so you write these personal stories, you write a lot about demystifying finance. What's an idea you think in fintech that people consistently kind of misunderstand, um, or want or seek for guidance to understand?

Speaker A: Uh, I think there's a lot of people's a category that I see this coming up a lot in on the innovation side which also kind of bridges some of my work as an investor is um, bridging the gap between like financial awareness and literacy with technology solutions. And so I think over the years we've seen that manifest in a number of different financial wellness apps, some Neo banking solutions, new, um, like what new robo advising platforms and things like that. Um, but I think it's ah, I don't know, I don't think I, if you were to ask me, I would say I'm a bit bearish on the space probably because I spent some time with the vanguard and I saw like the, I saw what it meant to have like a true flywheel and economies of scale. Um, when you manage a trillion of assets and you, you know, you provide these ETS and mutual funds. So I definitely think there's something, yes, like financial literacy, financial awareness, education, these are all super important. These are evergreen topics because there's always going to be new, there's always going to be, you know, kids being born, who needs to understand money. And there's going to be people moving around, you know, to different countries. And like my parents had to, when they came to the US had no credit and they had to, you know, build up their savings from scratch. So it's always going to be, yes, financial education will always matter. However, I'm not entirely sure whether like, technology is the right solution for it or how technology is best served for it. So I think that's an area that, um, I see a lot of, um, whether like innovation or approaches around or conversations around, um, and they all kind of like dance around some of the, some of these like, core themes without ever kind of coming to a consensus on what is really actually what actually moves the needle. Um, uh, for, for improving like, financial outcomes especially, uh, for like underserved populations and overlooked populations. So that's one that I keep an eye out for. Um, like a skeptical eye, but a very intrigued eye because, you know, also by virtue of like my, my podcast and things like, I believe, I believe I really advocate for like, talking about these kinds of things. So I think as long as we're having those conversations, um, to me that that's, that's also really good.

Speaker B: Yeah, no, I totally agree. I think there's so many new apps and neo banks and solutions that pop up every day that, that people just want to understand if this is going to be the cure all. But you, you kind of described this bridge between some of your writing and, and some of your professional, um, experience. Do you think that your writing has influenced like your investing, uh, funnel when that was a part of your everyday.

Speaker A: Absolutely, absolutely. And I think that there's. For a while I struggled with like, making sense of how exactly like, writing informed my like, investor perspective. But, uh, perfect. But yeah. So to your question of, you know, writing, informing, investing, as I, yeah, it took me a while to really understand what the magic was there because, um, you know, initially I was just like, okay, the more, like, the more I write about things, the more I learn and the more they're able to synthesize information and present it in a logical way. Um, and I think I finally cracked it. So when I started writing my newsletter, my initial view on that was that, um, you know, having been an LP and as an allocator, I saw firsthand that some of the best gps in my opinion, were also exceptional communicators. They were able to articulate their ideas, even if they weren't necessarily the most like, innovative or novel but they were able to articulate and present them in a way that was exciting, compelling, that was structured. And so I developed the belief that to be a best in class investor, you have to be a best in class thinker and a communicator. And writing is one way to do that. And so when I started my newsletter, I was like, okay, I want every week, I want every week to be basically like a mini thesis. So if an LP were ever to invest in something that I was building, they wouldn't have to ask, what does Alona believe about financial wellness? They could just go and read one of the 50 articles that I've written about it. So that was point one and point two is that a really interesting thing happens when you're part of the media landscape, which is evolving so rapidly. And that is more often than not when I approach a company or a founder or a team. And this has happened to me several times if I approach them as an investor lens, you might sometimes hear, oh, we're not raising right now, we're not taking conversation with investors. However, when I approached him I was like, oh, I have, I'm interested in learning about this first story. I have yet to meet a team who does not want to speak to media, whether it's like on the record, off the record for a conversation. So it's been a fantastic way to like build relationships in a setting that's very like um, uh, that's very like mutually like just like very um, like less pressure. Right? Because the only thing that's on the line is just like understanding a story. And then in the other third thing I would say is that it's given me incredible like competitive landscape analysis. So I think in the last several months I've probably talked to almost a dozen early stage companies building in the AI CFO stack. Um, and in the first one, I know, yeah, it's like I might be, I was joking with one, I was like, oh m. I'm like AI CFO girly this year. But you know, the first one or two that I spoke to, I feel like my questions were like more surface level. By the time I got to number five or six, I was able to ask, I was like, what about the ERP integration? How do you handle for these cases? So basically it's like, um, you're taking the similar lens as an investor. And so as a result I think it's helped sharpen my. Because I'm constantly getting information either from large companies and incumbents and what they're going to announce or Smaller early stage companies. It just adds to your pattern recognition. And so that's what a lot of early stage investing is about. And, and so I think these are the three ways that it's all come together in terms of like, access, in terms of being able to synthesize my thoughts and share that to an audience so that I can build momentum for what I built for the fund. And in terms of market mapping competitive landscape. And, um, it's been. On that point, what's been really exciting is getting to talk to founders and ecosystems that are not often covered. So, um, I've spent some time in New Orleans. I write about Latin America, what's happening in global context where there's really fascinating work, but people maybe aren't reaching out to them in the same way, or certainly not U.S. investors. And so once you get access to those companies and teams and ecosystems, then you really see like global trends and pattern. And that's when I think the real

Speaker B: exciting step is, yeah, you're basically like doing the diligence, uh, for the investment already. And have you ever invested because of either something you wrote or some of the access that you've been able to gain?

Speaker A: M. That's a good question. There is, um, yes. The short answer is yes. Um, I remember a couple, two years ago, um, it was basically like three years after the pandemic, when the markets were kind of stabilizing in some kind of way. Um, I read an article from the Wall Street Journal about how basically the nature of small medium businesses has changed. And one of their key insights was that prior to the pandemic, the average SMB, like was, let's say if they started with like two employees, they would increase to four employees within a period of 18 months. So basically like double in size within a certain period of time. But they were seeing that post the pandemic, small businesses weren't higher. They would stay at the same size for a longer period of time. So that was like a very, I don't know, I really sat with that, right, Because I was like, huh, like that. What does that mean? Right? Does that mean that they're, they're constrained? Does that mean that they're doing more with less? And so, um, I started to explore more, like just dig into the data, what's going on? And I discovered like many people know small businesses are like engines of global economies. Not just our local economies, but global economies. Small businesses, um, tend to be operated by women and underrepresented minorities. And so they're also engines for like, economic mobility. Um, and things like that. So it was just all these really interesting things. And I said that like, that was like the core of my first ever thesis of like SMB infrastructure. SMB technology is not being served adequately by a lot of these like enterprise SaaS systems. Um, and that led me to uh, and I think I remember I wrote about that on my LinkedIn and I made a post about it and then also my Forbes column. And then, yeah, a founder that I had known for like a very long time reached out to me by virtue of that post and said, hey lona, like we haven't connected in a really long time, but I'm actually building like an infrastructure solution to provide retirement plan retirement solutions for small businesses in the US with international teams. And so it was just like a, it was like a perfect confluence of like, I saw a trend, um, I wrote about it, someone reached out and yeah, we did investment. So that's definitely one example. And I, I, I found a couple of other companies through, I found a company on, via TikTok. We just met in person in New York. Um, I'm like, it's been, yeah, I definitely found the more like you articulate what you're thinking about or what you're interested about. People are, love to connect, um, whether it's like on LinkedIn or social on TikTok or Instagram. And especially for some of these founders who are building in for solutions for younger, you know, for like more, younger audiences or for tools that maybe are like more needed to them, uh, it's kind of like an edge. Sorry, this is not meant to be a show about like TikTok, but that's been my experience.

Speaker B: No, that's, that's very cool. And, and on this sort of investor trend, you know, you've been an allocator, you've been venture. How has that sort of changed the way that you underwrite fintech and some of these smaller companies?

Speaker A: That's such a good question. Um, so I think the biggest lesson I learned was jumping from the allocator side to the early stage manage direct investing side. I was an allocator with a $7 billion institutional foundation in Los Angeles. And you know, we were, if there's any allocators listening, allocator language coming in. But we were very like swimsy in style, so very classic. So by which we mean like we were manager selection. We really relied on the manager thesis and then that would help dictate like how we construct the portfolio. And so after having done that for like two, three years, I really felt like I was like, I get. I. We had seen some of the best managers come through. You know, we had a really strong portfolio. So I was like, ah, yes, I know, I know what it takes to build to be a best in class, like early uh, stage manager. For I have seen. For I have seen. And I walked in the valley of the shadow of venture capital, like hundreds of funds, right. Um, but then like when I came to the direct side, I was like, oh my gosh. I was like, so all the things that the managers are telling you they're doing around edge differentiation, I was like, a lot of it is just kind of this mad like it's a lot of just like magic and kind of what I mentioned, like a thesis, a TikTok. And then before you know it, you have an incredible opportunity. So that was like an aha moment for me in terms of like, okay, like what it takes to become like an institutional backed GP. Um, at the early stages of like funds 1, 2 and 3, it might look a little bit different, but you're still going to get there if you have like the right processes and systems and point of edge. And on m. The fintech point in particular, you know, it's 2026 right now. Um, I, you know, we can probably look back and say like 2022, 2021 were peak years of like fintech. You've seen, we saw like entire funds built in that category. You know, some exceptional funds like Ribbit and QED and a handful of others have come up. But since then, you know, we can kind of, we can call this. I think it's like a fintech winter where I don't know if you could, I don't know, it's just been a more difficult time and this, you kind of seek a saturation in the market in terms of at least the United States States like new ideas or what's really backable or what's really exciting. But this is where having like the writing platform comes to play is because I've been writing about fintech, uh, globally. And so I noticed things like I was in Mexico City a couple of months ago and every single billboard, like all over that city was about fintech, where there was like mercado pago, mercado libre. Like something was, I was like, wow, all the advertisements are about money movement, right? And so that was a very like, that was very aha moment for me because I was like, yes, well in the US some funds might be saturated or from the institutional perspective it might be difficult to back it's still like a living, it's a very part, it's very much a part of people's day to day lives wherever they live. And the innovation is still happening and there are still opportunities and it might not look like a Neobank, it might look like maybe like a horizontal like integration across different systems. But yeah, I think for me it's been like uh, a. To answer your question about having how does that all come together? It's like there's the theory and there's practice and there's also the experience. And I think that those three come together have come together for me in really interesting ways where like now I can go back and hopefully like educate ops on um, like uh, on what they're missing potentially like when they're backing certain managers or like here's the layers that actually matter. So it's interesting because like money and commerce is like a living, breathing, moving thing. And so things that are living and breathing and moving like can't possibly ever go out of favor because then like we die.

Speaker B: It's, it's interesting that you, you bring up Mexico. I think south and Central America are really pioneering right now, sort of their fintech peak. And you've written about, you know, the new banks of the world. What do you think signals that something is culturally inevitable versus a good startup with defensibility in the market?

Speaker A: Yeah, I think that's a good question. Um, I think like uh, part of it is just like in terms of like traction and go to market acceleration. So obviously there's metrics that you look for like at those early stages, right. In terms of like is this like how is this being accessed, how much revenue is being accelerated and things like that. But I think when it comes to like at a certain point like a uh, technology then shifts away from being a tech solution. It's like a brand. And so I think like what's one thing that Nubank did really well, right Is because it shifted away from being not just like a, like another like banking solution, but just like a, like a brand and something that's like really exciting and like, and like associated with like a specific movement or associated with like a specific um, what's it called, Like a solution. Right. And so I think that shift from like solution or like one product or featured into brand is like where the magic really happens. Um, and we've seen that across whether it's like Nubank, um, you know, you might select Brex to a certain other extent, uh, in the, in the US or um, seen that with stripe and things like that. And I think we're also seeing like, that's why some companies are also like investing more into like um, uh, like content marketing. We're seeing right, like in hiring, like hiring future partnerships and um, content marketing and writers. And so I think there's something to that. Right? Because at the end of the day like how money moves is very like, it's, you know, there's like one way it's, it's not like that. What's it called, like exciting, like evocative. But at the same time like if you can become like the trusted, like space for that, then you can get like capture more than just like wallets and you become like the automatic resource. So I definitely think like brand is the key.

Speaker B: And from an investor perspective, how do you make sure that you're not getting in too early? I think financial services is unique in the sense that there's so much regulatory spaghetti and technology spaghetti that exists when companies are trying to get off the ground that a lot of times I think investors don't have the timeline or stomach for. So what does that sort of um, trade off look like from that standpoint?

Speaker A: Yeah, um, I think that's a great question and I think it's to be determined or to be seen. Uh, I definitely think of the early stages. Founder market fit is really important. So oftentimes you'll see founders who have had like direct experience um, in, in this industry that they're building or have experienced that pain point that allows them to line up some like the regulatory like layers, you know, and like the regulatory, um, what's it like? M being like more mindful of some of the things that could go wrong sooner and so they tee that up earlier. So in the example of the company that I backed, that's like one great example. I um, think the other thing that's uh, like. But I think that's also oftentimes more difficult to like underwrite especially because you know, investors don't often come from that same background or they might not experience that problem the same way. And I definitely think that success begets success whereby some investors are like so far removed. Like if the problem is like accessing your paycheck sooner, like um, you know, some, some GPS just don't. They're like, well, why would you ever need to do that? Right? And so I definitely think there's like a layer of like context between like what's on the ground, being experienced versus and what's like, ah, you know, what investors understand to be True. And I think that some of the best founders are able to like articulate that, connect that bridge and articulate that bigger picture such that you know, it becomes like inevitable rather than like a nice to have.

Speaker B: Yeah, no, that makes a lot of sense. And you, you brought up Rex a couple of questions ago. I think in one of your newsletters you kind of push back on people celebrating the Brex exit.

Speaker A: Yeah.

Speaker B: What do you think people misunderstand about you know, these quote um unquote fintech success stories or what does a real win look like in Fintech?

Speaker A: That's such a. Yeah, um, I think it's interesting right because especially like in the context of Brex, right. The thing that I wrote about in particular was about um, you know like the, like the valuation that they were acquired by right. And so, so many people were celebrating but I was like actually if you came like if you were joining company at this later stage, you probably weren't going to be getting like you probably like um, did not, you know, were not able to receive this on the equity upside. Right. And so that's like a very. Yeah I think like those kinds of like layers are very like distinct. Um, and so I think that um. Ah yeah, like what is a good outcome look like I think it kind of depends, right. This is a great warning. Finance class teaches us. So from that it depends on which perspective you're coming from. Like so if you're like a day one team member of course you know, you probably like the outcome for you depending on like the price you're required for could be very material and game changing. Um if you've you know like for in the case of new bank, right. I think um, they managed to bring in like an underbanked segment of the population and provide them like with credit um, and resources and things like that. Right. So like they forever change the structure of the economy. Um if you're like a later stage investor the outcome for you might be like I don't know, depending up more on the price sensitivity and things like that. So I really think it depends on the context. But in all I think anytime you're able to disrupt a system or change how people approach a problem or change people's perspective of what they assume to be true. Um, in the case of Nubank, ah, for example that might have been like oh, this population is not profitable to serve so it will never be served. Or even in the case of Brex, I think the Capital One acquisition is actually super interesting because since then I've talked to Other people who've been like, oh, like, well, Capital One, um, uh, like by, by, by using this acquisition, they're able to get like this layer of data so they can position themselves in this new way. And I was like, oh, very insightful. So, so maybe if I were to rewrite that article, I might have like a slightly different approach. Um, but, but yeah, I think it's very like, um, I think it does depend. But I definitely think if you've been able to like, shift people's like, perception of what the status quo is, I think in my mind that's a success.

Speaker B: No, that's a, that's a great perspective. And kind of as we've talked about, especially in, in the US And North America, you know, we saw a lot of stagnation and maturation in the market and now we're seeing these huge deals be, uh, it, you know, the fis, World Pay Discover, uh, Capital One, Brex, Capital One. What do you think are the biggest, uh, either trends in fintech investing or biggest opportunities in the next three to five years?

Speaker A: Wins in fintech investing? Our biggest opportunities. Um, it's exciting because I think that there's, there's still a lot, um, I definitely think there's still a lot of opportunity in terms of, um, like global money movement and some of the fees associated with that. Uh, like, for example, I was working with someone who was helping me create like some social media content and they were based in a different country. And like the wire transfer fees that were associated with that were just like, so absurd, right? And I think, and I remember it's crazy, right? Um, and then, and I remember trying to. He was like, wait, why? He's like, in my country it's free and instant. And I was like, well, I was like, we still got a ways to go, right? So I, I definitely think in terms of like global money movement, there's been a lot of great innovation in terms of like Revolut, PayPal and things like that, but there's still like, it still can be quite cumbersome, it can still be slow, especially from the small business angle as well, right? In terms of creating invoices and stuff like that. So I definitely think in terms of like real time, like rapid money movement, that's like an area, um, that uh, continues to have like, a lot of like opportunity. Um, I also think like, in terms of um, I think like an interesting, like there's still a lot of spaces, um, where. How can I put this, like at the point of sale or at the point of like customer engagement is where a lot of like, information gets lost. So I once, I recently covered the fundraising announcement for a latam company called hello. Um, and one of their key things is they integrate directly into WhatsApp. Um, because in Latin America something like 90% of this SSMB interactions go through like, WhatsApp. And so by integrating directly like into your WhatsApp messages, you're able to like invoice right away rather than like losing the customer along for their journey. So I definitely think, I don't know how else to call it besides like meeting a customer where they are, um, whether that's like you're on, let's say, or if you're on a set, like, and you're a photographer and you're on set, for example, and you just like speak into your phone like, hey, create this like, invoice for this client. I've been here for four hours. Include X, Y and Z. Right. Um, and I think again, coming out of Wharton, like, some of these things, like, I'm like, oh, well, I took. I can just make an invoice. I can make a PDF out of a word tab, but if you like, that's an invoice. Right. But, um, some, you know, for folks that, you know, who are like creatives or entrepreneurs or like really focusing on like, on the specifically, like, some of these like things associated like invoicing, um, billing, etc. Are still like kind of like a hassle and something that can be uh, frustrating. And I think there's still a lot of like, opportunity to like, um, to streamline that experience. So, uh, for lack of a better term, like meeting the customer where they are, I think is. An office is a really exciting opportunity for payments and for financial services more broadly.

Speaker B: And maybe some credence to the office of the cfo. Order to pay workflows.

Speaker A: Exactly. Maybe. Maybe that's a good point.

Speaker B: Maybe. On the flip side, do you think there's a trend that is getting a lot of hype that you are skeptical about?

Speaker A: Ooh, a trend that's getting a lot of hype that I'm skeptical within Fintech. Right?

Speaker B: Yep.

Speaker A: Okay. Um, okay. Not to like rag on AI for the CFO suite, but I do think it's like really interesting, uh, I'll put it that way, that people suddenly were like, oh, CFOs. Oh, whoa. How do they close their books at the end of the month? How can they budget and forecast? And I was like, are you just. Part of, the cynical part of me is like, did you find the people that hold the purse strings. And then you just realize that if you can just like talk to them, you can like make their lives easier. Exactly. I was like, so. So you just figured out if you talked to cfo, you had the whole budget. And so through that you can figure out who to sell to more efficiently. Which hey, like is. Is. Is viable by all means. Like, you know, like, um, do that. But at the same time I do want like in. In talking, having covered so many of these companies now there is something I do start wondering, like, like, is it the CFO suite or like what are the different characteristics of like small business? Like what's the difference between, for example, between like a dental clinic versus like uh, like a, you know, like an electrician. You know, like, you know, like these. Like there's like, there's different fast assets that like, there's different types of industries, different scales, sizes, um, customers that they serve. And so by glomming on like another like integration and serving it and let's say serving companies that have like between like a hundred, uh, excuse me, like employees up upside to the thousands, like, you're still missing like this core layer of like smaller businesses. Right? Like some of these, like. And even it could be like within healthcare as one example, and I'm sure there's many others. So I don't know if I'm like skeptical, but I do wonder if like everyone's like rushing to like one specific part of it. Um, and not really like focusing on like who. Like there's still like a. Probably a really large underserved market. Right. And so like m. Yeah. Maybe devoting some attention to some of those other like more specialty. Specialty uh, uh, operations could be interesting. So Yeah, I think that's one area. Trying to think. Oh yeah. I think, um, the second point would also be. I don't know if this is like overhyped but for. By. By um, necessarily. But definitely in terms of like um, what's it called? Uh, like StableCoin and like Web3. And I think all of us remember when like NFTs were everything and all of us remember when like Web3. So. But I think what's been interesting there is like it's. It's what I, I think if you had asked me about this five years ago, I would have been like, I'm not interested in this at all. I don't really understand it. But I think like the like, the stability of it and like how enduring it's been. It's been really interesting and also super Fascinating is how it's also become like a, like it's been powering some really interesting things like prediction markets, um, uh, and things like that. So uh, anyways, that point being I was like, I think like in terms of like stablecoin, crypto web 3, um, I thought that. I'm skeptic, but I definitely think that it's become like almost like it's entire. It's its own like universe, its own asset classes, its own like players and its own like use cases. And oftentimes when I hear, I'm like, oh, this is the solution for global money transfer. I don't know. Is that true? I don't know. But it's become like, it's an interesting thing where it's like always in the background, not quite as dominant as where I thought it would be, but at the same time very persistent.

Speaker B: It's a really interesting perspective. I think a lot of times I imagine that the office of the CFO is just the early stage of what we saw with the verticalization of payment acquisition like 10 years ago where now we have a bunch of hyper specific ISVs that uh, you know, kind of go through this ebb and flow of consolidation and, and breakout as well. If we zoom out, do you, like, how do you think fintech as a category is evolving? Do you think we're still in this disruption mode or entering more consolidation?

Speaker A: That's a good, I think it depends on which market you go to. I think I would say like, if we're looking at like more established markets, like, excuse me, developed markets, I might say that we're probably in more consolidation. But I think as we look to like emerging markets, developing markets, I would definitely say it's still one of like expansion of evolution, um, and different opportunities there. And so yeah, I think like it's um, it's, it's a perennial, it's like a perennial, not a struggle, but it's like the perennial story. And I think like, yeah, this is going like way back a while ago I had the chance to go um, to visit this like money museum in Europe because I'm the kind of, that's the kind of thing. Um, and it was, there was like an exhibit on the evolution of like currency, right? And currency starting from like seashells and like rocks and bone and like, and then like precious metals and then coins, uh, paper, uh, money, credit cards. And then it got like crypto and I was like, wow. And so like, it was just so interesting to see. I was like, you would have thought like we had reached the evolution of money. I was like, that's it. This is the money. Like, like cash. Cash and coins and a credit card. But then I was like, right, like crypto has changed that as well. Like, um, bitcoin. So I think what that really showed me was that life is about evolution. And I'm sure the people who were trading with seashells and bone fragments thought that this is a fantastic way to exchange goods. Um, I guess what I'm trying to say is that in that context of the span of time in humanity and how much innovation has been happening, we're always going to be evolving, even if that means I don't necessarily know what the next form of currency might look like or the next way to pay or like, you know, the next asset manager might look like. It doesn't mean that it's on the horizon. And so I would certainly be foolish to think that, uh, like, there can't be. There can't possibly be anything, like, in brokerage, there can't possibly be anything, uh, in currency or in payments. Right. Because there, uh, kind of always is. And so maybe it's not going to be like, in the next, like one or two years, but I'm certain that someone out there is working on it right now.

Speaker B: Oh, for sure. There's always going to be something next. Um, all right, well, I've asked you maybe about what you're skeptical about. Is there a segment of fintech that you're most excited about right now?

Speaker A: Segment of FinTech I'm most excited about, I definitely think, um, yeah, like within, like, within, like global economies, like, emerging markets are doing really interesting and exciting things, um, with, uh, with, uh, like, for example, like I wrote about, like, mobile money on the African continent, uh, several years ago. Right. And like, even just that concept, like, you know, in America, like, we're still using checks to pay for our rent. Right. And then some, like, people in other places are paying for health. Like, it's like the way that people interact with payments, um, and what they pay for and how, I think is really interesting. So I continue to be really inspired by and impressed with, like, the level of innovation happening in global markets, emerging markets in different countries where there's like, fragmented ecosystems, in places where broadband penetration might not be so high. Because I know it might be a surprise to some listeners, but we, you know, there are parts of America that struggle with those exact same issues too. I grew up in Kentucky, um, and yeah, like, there are many places in the state that don't have access to um, stable, um, broadband. And so another like payment app is not necessarily going to cut it for the people that are out there. You know, they can't even log on to a website or something like that. Right. So I think like that's an area that I'm, that I'm like, that I'm always inspired by. Whether it's like integrating with WhatsApp, like I mentioned hello, or like someone like instant transfers or like the, the power of like your phone. I still think like, I know I'm holding a phone. People can't see it right now, but like the phone is still like, um, is as yet to be like fully unlocked, uh, in terms of like utilization. I also think there's a lot of, um, another perennial area that I think is ripe for innovation and discussion is around cybersecurity and things like that. As the quality of fraud, um, and sophistication of fraud continues, uh, to improve and accelerate, so too must the tools that fight those things. Um, and so I also think that's a really, really interesting, uh, space where I've seen a lot of innovation happening in interesting ways. Um, and yeah, I think those are the two areas that I'm keeping an eye out for.

Speaker B: That's awesome. We should all keep an eye out for those and maybe to wrap us up, thank, uh, you again for joining us. Do you have any advice that you would give some of the young professionals looking to get into any of your kind of many ventures, be that FinTech, VC writing?

Speaker A: Um, I guess I would just say like, start with um, just have fun. Uh, you know, this, all this started because I was having fun, uh, and I wanted to, like, I wanted, you know, no one was paying me and so like writing and talking about things that like, I thought were important, um, were top of mind for me. So I would just say just have fun and always like never, just assume. Never just assume a status quo. Like always. It's okay to be skeptical, it's okay to ask questions. Um, and I think like, as long as you have a healthy skeptical mind. Um, and also don't just assume that the people like that the authority is actually the authority. How people become authorities. You know, it could be M. Ms. It could be very mysterious sometimes. And so if you're like, listen, if you're at a conference at an event or if you're reading something and you're not understanding how the dots turn high, like ask, ah, reach out. Ask her on your network. You know, um, you know, Wharton is like a passion for, for, for high quality, um, content and thought leadership on these types of things. So yeah, if you're interested in these spaces, like, just start writing about it, just start talking about it. And especially like in the new media landscape, you know, like between my newsletter and others, there are so many like super successful people who've been, who've cultivated like an audience and like a following by just sharing their unique perspectives and so, so don't be afraid to just start writing.

Speaker B: Great advice. Ilona, thank you so much for joining us today and sharing some great insights on the state and maybe the future of fintech.

Speaker A: Thank you so much and thank you

Speaker B: for listening to today's episode of the Wharton Fintech Podcast. If you enjoyed the show, please leave us a review and give us a follow on social media. We appreciate the support and hope that you'll continue to spread the word to more listeners. Thank you. If you'd like to keep up with all the content from our fintech community, please subscribe to our podcast channel and find us on X, LinkedIn, Instagram and Medium Orton Fintech, where you'll be able to find articles, interviews and much more analyzing all aspects of the fintech industry. As always, thank you to Elona and until next time, this is your host, Megan McGowan.

Speaker A: Sam.