Author: Lauren Weston

Decentralized Finance: Driving Towards Mass Adoption

Source: Block Data, 2021
Source: Block Data, 2021

It is the middle of 2022 and we are in the midst of another shock to the financial and crypto markets. We have seen that crypto is perhaps more correlated to the broader financial markets than we initially thought: Bitcoin is down ~70% from 2021 highs, hovering near prices not seen since 2020, while the Nasdaq is down more than 30% during the same period. Tech and crypto giants are announcing waves of layoffs amidst the shifting economic outlook. But as we enter another “crypto winter”, we are also seeing a profound resiliency from the crypto and web3 communities that are shifting into build mode.

As fintech investors, this is a signal that decentralization — the very promise that crypto offers financial services industry — is here to stay. This is a signal that we will soon move from decentralization for ideological reasons to decentralization for practical reasons — because it will in fact become cheaper, faster, and 10x better user experience.

We recognize that (Read more...)

Embedded Lending — Our Thesis on SMB Lending, Enabling Infrastructure and the Opportunity to…

Embedded Lending — Our Thesis on SMB Lending, Enabling Infrastructure and the Opportunity to Unlock Access to Capital

Sample lending tech stack for SMBs. Note: This visual does not capture companies that focus exclusively on personal, mortgage, auto, student debt lending. This visual also does not capture embedded lending companies that bundle lending operations into a single API.

At Thomvest, we have closely followed the evolution of lending across investments in LendingClub, Kabbage, SoFi, Tala, LoanSnap, and Figure. From personal to SMB to student loans and mortgage, we have seen how the first wave of online lending businesses created immense value at the time — we have also seen the distinct challenges of the lending 1.0 businesses, some of which were inhibited by their own full stack models. These businesses had to build, own, and manage every part of the lending workflow themselves, and this ultimately impacted their scalability, growth, and valuation in the public markets.

In the wake of lending 1.0, fintech has become one of the dominant sectors in the private capital markets. In 2Q21, 1 in 5 VC investments was a fintech investment. This boom in fintech has been driven by a paradigm shift in how financial services are distributed and consumed: a shift toward cloud-native, API infrastructure companies that are spearheading the connectivity between regulated bank entities and consumer-facing platforms and that are reshaping how financial products are created, configured, and distributed. Embedded finance is well underway and is enabling companies to embed financial services in their (Read more...)

Construction Technology Market Map: 3 Opportunities Ahead

Today we are pleased to release our construction technology market map. This market map follows our previously published housing market map and commercial real estate market map. A high-resolution version of the map is available here and the full list of companies is available here. This market map includes more than 150 technology companies operating across every aspect of the construction process, ranging from seed stage businesses to public companies.

At Thomvest, we are interested in the supply side dynamics of the real estate industry. We believe that the adoption of technology in construction can meaningfully impact the supply of real estate by breaking down silos in data, providing purpose-built tools for key stakeholders, and eliminating inefficiencies in the fragmented value chain.

While we have surveyed the broader construction technology landscape in our market map, we cover only a few areas of the value chain in this blog.

We see three key opportunities ahead for SaaS and tech-enabled companies:

1. Collaboration software that provides insights around workforce management: In a world in which labor supply is tight and skilled work is invaluable, workforce management becomes a must-have tool for operations teams to forecast costs and drive employee retention.

2. Materials management software that is built purpose-built for subcontractors: The pandemic has disrupted global supply chains and exacerbated the fragmented process of procuring materials — forcing the burden of responsibility to largely fall on subcontractors.

3. Platforms that address the construction payment chain from lenders → title companies → owners/developers → general contractors (Read more...)