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).