Big Trends for 2019

For the last 2 years ARK Invest has put out an interesting look ahead for the year focused on what they see as the big technology trends. You can find the latest for 2019 here. Some points I found particularly interesting this year are:

  • This has been apparent for several years but barely talked about in the media, but the cost of lithium ion batteries is dropping rapidly, allowing a transformation in how we consume energy and our electrical grid systems. Due to this they forecast electric vehicles will be cheaper by early 2020s than any comparable internal combustion engine vehicle.

  • They might be cherry picking their data but they do make the case that bitcoin and crypto demand is accelerating in emerging markets with unstable currencies.

  • The rise of digital wallet apps in the US grabbing market share, just like they’ve long been dominant in China with WeChat. They specifically call out Venmo and Square as evolving into the center of a consumers financial life.


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Trim is a fintech startup that offers an AI personal assistant that improves the financial health of its users. Services include saving automation, spending analysis and automatic budgeting. Its hottest offering is an automated service that negotiates and lowers a user’s bills. Trim does this with subscriptions such as Comcast cable by using AI to look at billing and pricing trends regionally. It’s customers tend to be younger and more tech savvy individuals, mostly in the millennial demographic. Their next set of offerings will be focused on helping solve debt challenges people have, especially around student loans and credit card debt.

Trim has an interesting business model that takes a percentage of what they save their users by negotiating their cable and internet bills.

The team is currently less than 20 people and is based in San Francisco, CA.

Why I like Them

Automation - the team is hyper focused on automating the personal finances of its users. A long term thesis of mine is the growth of more automatic personal finance since the vast majority of people don’t understand and hate dealing with their finances. Trim recognizes this and is investing heavily in R&D to ultimately become a platform that improves user’s financial health.

The team is also laser focused on their users’ needs and their mission of solving people’s financial problems. In finance and fintech in general to often firm’s are offering a service, but not helping the end user actually improve their financial well being. Trim talks to their user’s weekly to target the next products to build that directly helps them solve an issue they need. As expected with this focus, they have strong traction and growth. Even more interesting, they find that their service is very sticky as they deliver a newsfeed of transactions and information via SMS to their users that is very engaging, so much so that most users stop using their banks app.

Disclosure:  I have spoken to members of the team.




BlockFi is a fintech startup offering personal loans backed by cryptoassets.  The company's flagship product is a standardized loan at a flat interest rate for up to 12 months, at a 35% LTV ratio.  As collateral for the loan BlockFi holds a customer's Bitcoin or Ether at a registered custodian.  To manage the risk of such a volatile asset class, the firm has triggers at cryptocurrency price drops where the borrower has to put up more collateral or they begin selling the borrowers cryptoasset.

Unlike a traditional lender, BlockFi does not look at FICO or credit scores.  They generate revenue via loan interest as well as servicing the loan when they sell it off to other investors.  They are growing fast expecting to originate $100M worth of cryptoasset backed loans by end of the year, with more customer demand than they can currently support.

The team is based in New York City and has under 10 employees.

Why I like Them

Blockchain technology and the cryptoasset class it has given rise to, continues to grow as a part of the global financial system.  No matter if cryptoassets are a bubble or not, it seems unlikely they will ever go away, with a real possibility they will be part of any well balanced portfolio in the future.  BlockFi is helping build out a modern financial system around an emerging asset class.  They have huge amounts of growth ahead with their current offering as just a first step, with the team one day hoping to offer lines of credit and a credit card backed by crypto.  

Disclosure:  I have spoken to members of the team.


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Pando is a startup developing a new insurance like product focused around covering individuals in high volatility, winner take all careers.  Their product gives downside career protection for individuals in certain superstar careers such as professional sports or entrepreneurship where success is rare but the financial reward is often high.  To do this they take individuals early on in their high risk career and put them into groups or "pools" of people with other similar risk profiles and careers.  A portion of the future earnings (or equity for startup founders) above pre-defined thresholds of those who become the superstars are shared with the other members of the pool.  Basically they create a career safety net by allowing every member of the pool to invest in the success of every other pool member via a diversified portfolio.

An example that illustrates the underlying problem is the team's first market of professional baseball players.  A first round draft pick has an expected career earnings of $40M+ but has about a 50% chance of never playing a day in the MLB and earning nothing.  If this player is successful and doesn't suffer injuries they give up some of the $40M they could potentially make to other members of the pool.  On the flip side, if they aren't successful and earn nothing they would still receive income from other successful members of the pool they are in.  Basically, the winner super stars provide a safety net through a payout to everyone else in their pool who might not have had the same level or any success.

These pool sizes vary based on participant preference.  Individuals choose to pool for one of three reasons: lower career volatility, ability to invest in others, or a network of peers financially aligned with their success. Currently Pando Pooling is trying different pooling models where they either let pool members self select or use their proprietary predictive algorithms to offer optimal matching.

The team is currently less than 10 people and based in San Francisco, California.


Why I like Them

Pando Pooling's product idea is extremely innovative and one of those you wonder why no one had thought of decades ago.  In hindsight it seems obvious to give high volatility careers a safety net, but the devil is in the details with contract terms and the determination of who is in the pools of risk vital for their success.  The team has invented a novel solution for de-risking those with careers that face highly bifurcated outcomes.  Although extremely early they have several pools already running, and have found deep interest among customers with strong traction especially among professional baseball players.

Even more creative than their product itself is the firm's business model.  Unlike in traditional insurance, Pando Pooling will not be taking any premiums but instead will take a portion of a pool's payout, even if that may be years from when the policy is first created.  What this does is basically give the company a stream of cash generating assets (their pools or policies) that can be potentially borrowed against or even securitized and sold off to investors.  In the long term this might not just be a new form of insurance but a new type of securitization asset class similar to something like catastrophe bonds that are becoming more popular among institutional investors.

Overall, I love the innovation here and the creation of a new type of product, business model, and potentially a new financial asset class all in one.  However, there are extreme risks with the success of this business depending on accurately assessing career risks of members (having several pools where there are no payouts would likely affect popularity and sign up) as well as the lack of cashflow to the business itself, especially in the first few years before the pools start paying out.

Disclosure:  I have spoken to members of the team.

What I Find Interesting in Kleiner Perkins 2017 FinTech Trends Presentation

Venture Capital firm Kleiner Perkins recently put out a presentation looking at the current state of FinTech and where it is headed.  You can find the full deck here.

Below are some points that I found interesting:

  • The rise in the last few years of FinTech startups globally, not just in the old finance centers of the US and London with Asian FinTech seeing the most growth in the shortest amount of time.
  • No surprise, in the last two years the biggest area of FinTech investment has been Crypto related startups with consumer and enterprise lending coming in as a close second and third.
  • They make an interesting point that the seemingly endless scandals from traditional financial services companies (Equifax breach, Wells Fargo fake accounts, etc.) leaves sector incumbents unusually vulnerable to startups.  
  • Software is  eating the sector with the number of new APIs multiples higher in Finance (~2,000) than other sectors being disrupted by software.
  • The most interesting trend Kleiner calls out is the disappearance of payment friction both online and offline, making the point that the App economy has been driven largely by this trend.  The end game of all this is FinTech completely disappears from the customer's perspective as illustrated by shopping at the Amazon Go store with no lines or check out required, payment is ambient with zero friction.
  • Initial Coin Offerings (ICOs) have truly exploded raising $2.9B USD in September 2017 alone.  With the explosion in crypto currencies we are seeing a complete ecosystem emerge around them including financial media (Coindesk, Bitcoin Magazine), hedge funds (Polychain Capital, MetaStable), exchanges (GDAX, Kraken) , and consumer services (Coinbase, Ledger).