Insights from The Fintech Meetup: A Gathering of Innovators

Last week, Las Vegas played host to The Fintech Meetup, where representatives from over 2,000 companies converged to explore the evolving landscape of financial technology. Unlike typical startup conferences, this event featured two days of rapid-fire, back-to-back 15-minute meetings among startups, investors, and other key players in the fintech ecosystem. Reflecting on my experience of over twenty meetings and numerous conversations, I’d like to share some key observations.

VC Is Actively Deploying Again

Despite the challenging funding environment of recent years, the atmosphere at the meetup was notably optimistic. Major fintech investors were present, alongside a wave of new venture capital firms, including Thomson Reuters, ResilienceVC, and Portal Ventures. Interestingly, generalist investors, who had been largely absent, appeared to be making a comeback.

However, the nature of discussions had shifted. Entrepreneurs arrived prepared to delve into unit economics and cash efficiency—topics that were rarely discussed in the exuberant climate of 2021. Many pitches began with the word "profitable," signaling a new era of financial prudence. This focus on capital efficiency resonates with my advocacy for “camel” startups—those that can thrive on limited funding while maintaining sustainable growth.

Among early-stage startups, the concept of “seed strapping” emerged, where businesses aim to scale significantly with just one round of funding, largely due to advancements in AI. While this approach isn’t feasible for everyone, it reflects a broader trend of founders prioritizing capital efficiency.

Some Sectors Are Clearly Breaking Out

Since my coverage of Money2020 a few months ago, two sectors have continued to emerge as dominant trends in fintech.

AI: The Industry’s Next Frontier

AI startups were ubiquitous at the meetup, focusing on areas like credit scoring, fraud detection, underwriting, customer service, and personalized finance. The conversation has shifted from whether AI will transform fintech to how it will do so and who stands to benefit.

While there is considerable hype surrounding AI, real-world applications are being sought by both financial institutions and startups. Some companies are rapidly scaling their revenues and delivering genuine value, but this doesn’t guarantee long-term sustainability, especially as giants like OpenAI expand their offerings.

Investors and startups alike are keenly aware that the ultimate measure of success will be customer value. As Tim Hong, Chief Product Officer of MoneyLion, aptly put it, “As AI reshapes financial services, the biggest winners will be consumers and the businesses that prioritize delivering personalized, value-driven experiences.”

Stablecoins Gaining Mainstream Traction

Stablecoins are emerging as a pivotal application in the crypto space, with adoption rates skyrocketing over the past two years. Regulatory clarity is beginning to take shape in various markets, and notable exits, such as Bridge’s acquisition by Stripe for over $1 billion, are demonstrating the potential of this sector.

A robust ecosystem is being built around stablecoins, addressing needs like money transfer and conversion, as well as innovative applications such as dollarized bank accounts and payroll solutions. Michael Blaugrund, CEO of DriveWealth, highlighted that stablecoins, if fully backed and transparently audited, could significantly reduce risk and enhance the timeliness of securities settlement, particularly for international firms.

New Ideas Will Find Greater Resonance

One venture capitalist remarked that “many of the cards have been played, and a lot of innovation is derivative.” Copycat investments—such as the next neobank or lender—without a clear differentiating factor are likely to face challenges due to VC fatigue and the harsh realities of unit economics at scale.

Companies that raised funds at inflated valuations in 2021 are grappling with reconciling those expectations with current market conditions. The phenomenon of “zombie” unicorns—companies that are still operational but unable to secure further funding—illustrates this struggle. Down rounds, structured deals, and secondary sales are becoming more common.

As I noted earlier, fintechs relying on heavy infrastructure or extended cash burn are under increasing pressure. Even as VCs resume funding, capital-intensive businesses are at a disadvantage compared to leaner models. Shriram Bhashyam, COO of Sydecar, echoed this sentiment, noting a shift in focus from headcount as a traction metric to headcount efficiency, emphasizing the importance of ARR-to-FTE ratios.

Interestingly, I encountered no full-stack lenders or banks this year. Alternative funding sources—such as corporate partnerships, revenue-based financing, and debt—are gaining traction, especially as the VC market begins to recover.

Looking Forward

The mood at The Fintech Meetup suggests that the fintech sector is on an upward trajectory. With high crypto prices, anticipated IPOs, and significant rebounds in public market stock prices, optimism is palpable. However, the market is becoming more selective.

Next year will likely be characterized by advancements in AI integration, innovations in payments, regulatory clarity, and a continued emphasis on capital efficiency. The landscape is evolving, and those who adapt will thrive in this dynamic environment.