a16z fintech leaders say ‘Silicon Valley is merging’ – TechCrunch

Last month, Andreessen Horowitz – one of the largest and most famous players in venture capital – announced thisThe headquarters will be in the cloud.“Going forward.

In the year Founded in 2009 in Menlo Park, California, the company — also known as a16z — has been a Silicon Valley investment icon for years.

In this post-Covid era of remote working, his new philosophy is that centralized headquarters are no longer needed. This philosophy extends to the fintech team.

I sit down with General Partners (almost literally). Angela Guest And Anish Acharya Find out more about why the pair believes that more people are working globally, creating a huge opportunity for fintech companies. The interview has been edited for clarity and brevity.

TC: Tell me what you think is the biggest change you’ve seen in how companies are being built in this post-pandemic era.

Anish: If it were you Building a startup five, 10 or 15 years ago, most of the focus was very local, meaning you were what we call ‘default local’. You will have a team of people who gather in a physical office and work hard to make a software product and sell it to customers in your country – maybe if you are in Silicon Valley – but in your area, definitely in your country. And over time, if the product and the company are successful, they will gradually expand internationally.

And a big trend that we’ve seen is already happening — and that COVID has fueled a lot — is that companies want to go global on day one. And that’s what the software is for.

When Google started, the day you could use the internet in India or any other country, there was no reason why you couldn’t use Google. But of course the problem is that although the software is global, the money is very much local. This is where a lot of our fintech thinking comes into things. The idea now is that the company of the future and the company of today will be one day global and the opportunity (for fintech companies) is to build all the infrastructure for that company to operate and sell globally. First day.

TC: I think it’s an interesting point. It’s very complicated though, right? When you talk about different countries and as you mentioned, world money is a very local issue. Each country, each region communicates differently. And I think maybe this has scared away some companies in the past.

Anish: The difference is that when you have a platform that manages a lot of things for you, the idea is that the company doesn’t have to worry about it. Just like we saw a few years ago with global payment acceptance. Many companies have come out and made it easy to accept payments using local payment methods in any country. If you had to figure out all these combinations and do it yourself, that would be very difficult. But if you can use a single-payer provider that offers you that for a fee, suddenly it’s a lot less painful.

Angela: Before this shift, I would take a meeting with a global credit card company working on currency cost management and ask, ‘Who needs this?’ Well, they may be companies that have been around for five to 10 years to get to this point. They started from one country and went to another country and then to another country. For a multi-currency car reconciliation, your debit card client will be a large corporate client.

If you want to start a company in that space, you’re like, ‘Holy shit, I have a great product to build. I have to cover different countries and I do enterprise sales which means I have to raise a lot of money before selling.’ But now you have companies – like Jeeves, for example, and from day one they have operations in Colombia and Brazil and Mexico. And they need that [management] right away. So now you have this great opportunity to sell to the new – to sell to the old – because all these new companies will want your products and services from the start, making for a much larger and more accessible market. Many of these new companies and new startups are targeting customers precisely because of their needs. If they grow, the company can grow with them.

a16z General Partner Angela Guest. Image Credits: a16z

The other thing that’s happening, on the contrary, is that companies that are expanding into different countries from time to time have to hire someone in a few hours to manually go into the various bank accounts in their different countries and record this in a spreadsheet. It is completely ridiculous. If you’re a really early adopter, can you afford the resources to do this? No. You must have software.

Anish: right. If you’re a company that hires people globally, you’re probably an old-school company with a worldwide payroll team and expensive Oracle integration. Now post covid, so many startups have spread globally. We ourselves go to the cloud. Now startups like Dell and other companies are making it possible for employees to work in ways that don’t have to worry about where they are.

TC: Angela, you and I talked a little bit about Latin America and how the growth there has been explosive in the last few years. What other regions are you all looking at for potential investment?

Angela: There is an interesting ‘secondary’ effect. It used to be the headquarters of the company where the executives and very early employees were. But now Silicon Valley or other big cities are starting to see CEOs coming from other places.

Anish: Yes, that is a very good point. Because if you think about what Silicon Valley is, if it’s the unsealed kind of Silicon Valley, of course, there is a place – but then there are Silicon Valley networks, Silicon Valley ambition, Silicon Valley capital markets and Silicon Valley talent, businesses, etc. You can take all these ideas outside of Silicon Valley. . That has never happened before because of the network effect component. It seems that Silicon Valley, which is bringing about this change between the global distribution of people and Covid, is not connected.

One of the things I love most about Marc (Andresen) and Ben (Horowitz) and the organization is our willingness to change our minds. We’ve historically been focused on Silicon Valley, and I think the new fence posts draw a really fine line in that we’re not—and that’s been a change in a relatively short period of time.

TC: Geography aside, of course, what areas in fintech are you most excited about?

Anish: The world is just beginning. A narrow view of fintech is banking, payments, lending and insurance. But I think the broader view is that we treat fintech as a new business model for internet companies. In that world, global opportunity is just that big. So cross-border and global is a big focus, and wealth management is where we spent a lot of time and you know, which means it’s very different from the past. It means asset classes you never thought of as asset management, like crypto, and new sets of people that can serve them. For example, young people working at Silicon Valley companies have different personal financial challenges than someone who is about to retire. I’m seeing some things in the consumer space that suggest that banking for Gen Z will be very different from banking for other generations.

Angela: Infrastructure. Managing globally used groups and currencies was a problem they could solve later. It is a problem we have to solve now. I’m literally looking at my entire infrastructure stack, thinking, ‘Okay, if you have to do this for 10 countries from scratch, what’s that company going to look like?’ Also, any matter related to crypto and fiat asset management. We’re starting to see that on the infrastructure side as people are trying to get on board from the fiat world into crypto. You have to comply with all kinds of banking regulations, but you also have to understand the Web3 world. There are many different opportunities in that space that we are looking at as an organization.

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