Fintech - Regtech funding , the forest and the trees

In our role as a financial technology broker, we find ourselves right in the middle of the fintech and regtech eco-system. The financial and, with some delay, the insurance world is changing at the speed of light, heavily driven by seemingly two conflicting forces : the enforcement of a fair and open level playing field for all sorts of financial transactions (compliance) and the digitally spoiled end-customer looking for convenience-at-no-cost (digitalization).

Thousands of entrepreneurs (according to Crunchbase approximately 2,500 fintechs in the EU, which I think is a conservative number), design a shiny ship, find a gullible money lender, build  a vessel, hopefully finish it completely, or make it look so,  and finally set course on the ocean of opportunities that bubbled up during the last decade. Many of those just set sail with a fairly undefined destination, or with no destination at all...They just hope to convince other investors or maybe a large tech firm to pay a multiplier of the initial investment for the wannabe future unicorn. 

Some, however, do set out a course towards a clear goal : building a profitable business. Only, those ones often underestimate the roughness of weather and seas on the way to their destination as well as the danger of sandbanks, cliffs, icebergs and pirates.They failed to properly study the charts and weather forecasts for defining the most favourable route to destination.

Last but not least, for a lot of captains of the start-up industry, an experienced pilot who helps to set the course and who stands besides the captain on the bridge, who knows the waters, the weather and the pirates, forms an insurmoutable or even useless cost.

No surprise that a lot of vessels just disappear in the Bermuda triangle of financial institutions, regulators and competition. Bad luck for the ones who spent their money for a journey that was bound to come to an early end.

This brings me to the forest and the trees.

Not only entrepreneurs, but also investors see the enormous opportunities, offered by the revolving financial world. They obviously want to benefit from this growing market place. But unless they are poked and razed in this market, they face a fintech-forest where it is an impossible work to find the healthy trees. Or maybe, to stay with the former metaphore, they see a huge harbour where finding the seaworthy vessel and crew is far more than just another challenge.

Maybe a chat with experienced pilots would be a good idea after all?