BNPL, Stripe competitors and dealmaking

What’s in store for fintech in 2023? We asked some leading dealmakers and fintech leaders for their predictions about what to expect in the new year. Here’s what they say.

Note: Some answers have been edited for brevity and clarity.

Brian Dixon, Managing Partner at Kapor Capital:

• One – BNPL will be a function of traditional credit cards in 2023 versus a solo product as it is now. I expect many credit cards to adopt this feature.

• Two — Generative AI meets fintech. I expect robo-investors to roll out new AI-assisted robo-advisors.

Lule Demmissie, CEO of eToro US:

• Tech has been through a painful year. It has revealed many opportunities for the strongest companies and a struggle for survival among the weakest.
• Dealmaking tends to pick up toward the end of bear markets, and I expect we’ll see the same situation this time around… Consolidation is normal in a maturing industry, and crises can accelerate that process.

TX ZhuoGP at Fika VC:

• Don’t expect a decline in dealmaking at the seed/series A stage, but a greater focus on unit economics early on, and B2B fintech will become more popular.
• At a later stage, it will be based on rounds that companies should have a clearer path to profitability. [We’ll see] consolidation of direct-to-consumer fintech distribution plays across all sub-verticals as CAC is challenged, [and] more M&A to achieve economies of scale faster or for product breadth, so cross-selling reduces mixed CAC.

Rex Salisbury, founder and GP at Cambrian:

• 2023 will be a fantastic year for early stage and seed stage fintechs to hire top talent.
• If you’re an early-stage company, you not only face less competition for job seekers, but you’re also better equipped to poach from later-stage companies, where many employees are depressed due to layoffs and underwater equity funding.

Jillian Williamspartner in Cowboy Ventures:

• I think security/compliance/fraud and risk is going to be extremely top of mind next year … FTX is a driver that will push for increased scrutiny from regulators.
• We have seen fraud grow drastically across the board, and many of the security measures have fallen at the expense of growth. We will see many new participants in this space.

Mark Batsianpartner and COO of Inspired Capital:

• The incumbent financial institutions will go on a buying spree driven by strong profits from banks and insurance companies and the opportunity to buy startups at much more attractive prices.
• And fintech for SMEs will be a major area of ​​focus as SMEs look for innovative solutions to help them through the economic cycle.

Justin Overdorffpartner in Lightspeed:

• One: A few consumer neobanks are either going to fold or be forced into exits/m&a scenarios.
• Two: A wave of new payment entrants building more flexible APIs and primitives will slowly begin to take share from Stripe and Adyen in areas such as marketplaces and vertical SaaS payment layers.