Fintech-Enabled Marketplaces: An Interview with Pete Flint of NFX
Pete Flint is a General Partner at NFX, a pre-seed and seed-stage venture firm based in San Francisco, and a serial entrepreneur.
Pete co-founded Trulia, a leading online real estate web and mobile app. As CEO, he led the company from inception - mainly focusing on product and growth strategy - to one of the largest and fastest growing real estate websites in the United States. The company had over 50 million monthly unique users at the time of its merger with Zillow in 2015 that valued the company at $3.5bn.
Before his very successful stint in real estate, Pete was part of the founding team of lastminute.com, a leading European online travel site that was later acquired by Travelocity / Sabre Holdings in 2005 for over $1bn.
In short, Pete knows his stuff!
We’re very excited he’ll be joining us at the annual Marketplace Conference on November 16 and 17 (more details below), but we couldn’t resist chatting to him in advance about the next generation of marketplace startups, particularly for those embedding fintech components. As he likes to put it: “the money is in the money.”
Why focus on fintech and fintech-enabled marketplaces?
The Partners at NFX have been long time founders, investors and advisors of online marketplaces, founding of investing at the Seed stage in over a dozen billion dollar plus marketplaces. We’ve been fascinated with the evolution of marketplaces and highlighted the opportunity in 2018 to tightly embed financial services into online marketplaces in what we called Fintech-Enabled Marketplaces.
We see four main advantages of fintech-enabled marketplaces:
- Removing friction and increasing consumer demand
- Unlock latent supply
- Reducing multi-tenanting by deepening buyer and seller relationships
- Subsidizing product or marketing through bundling
The lines between marketplaces and fintech are blurring. Why has it taken so long for consumer financial services to be adopted by traditional marketplaces?
One key reason why this opportunity is available is that today a significant amount of the financial infrastructure has been built and is accessible using modern internet technologies. There has been an explosion of innovative Fintech startups over recent years. Companies are now able to tap into existing fintech platform companies and seamlessly integrate financial products.
What will change for both traditional offline industries and incumbent online marketplaces?
There has been an unstoppable evolution in marketplaces over the last 20 years to constantly improve the demand side experience and capture more of the transaction. This is the next wave and can enable breakthrough product experiences and capture more of the margin for marketplace businesses.
What do you think about investing in fintech-enabled marketplaces in this current environment and what was your biggest learning due to COVID-19?
Probably the single biggest impact of COVID we’ve seen has been the consumer emphasis on convenience and removing friction from transactions. Some of this stems from necessities of the lockdowns and remote work and some from consumers and businesses putting a premium on flexibility, such as holding onto cash or preferring to rent assets over purchasing them.
Fintech enabled marketplaces excel at these areas, taking out friction by combining a purchasing decision with an underwriting or financing decision often in a single product experience. They can also create innovative products that solve specific and new customer needs and new startups can move faster than incumbents to create them.
They say that the future of consumer is fintech and that every consumer tech company becomes a fintech company. Do you agree with this statement and do you think investors are truly prepared for this?
I do believe that most truly significant consumer tech companies will have a sizable fintech company. As I like to say, “The money is in the money.” And for transactional companies, their long term success will rest on their ability to embed financial services.
Newer markets offer even bigger opportunities for both marketplaces and fintech. Where do you see the biggest opportunities outside of Europe and the U.S.?
We are particularly excited about Latin America and have made a number of investments in fintech enabled marketplaces there in real estate, logistics and labor and we are on the hunt for others.
Are you interested in hearing more about the boom in marketplaces?
For a deep-dive into different marketplace models, trending topics and how to scale a network effects company from zero to infinity, don't miss the 2021 Marketplace Conference on the 16th and 17th of November. Embedded Finance is one of our focus themes and we’ve got an amazing lineup including:
- Bremner Morris, CEO Rally.io
- Sukhinder Singh Cassidy, ex-President StubHub
- Eric Demuth, CEO Bitpanda
- Laura Wu Behrens, CEO Shippo
- Felix Ohswald, CEO GoStudent
- Elmar Broscheit CFO Gorillas
VCs from Battery Ventures, Bessemer, Lightspeed, NFX and more...
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