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Evolving Economy 2022: How to Navigate Consumer and Fintech Innovations Today

November 21, 2022

After more than two years apart, it was a privilege to reconnect in person at our 7th annual Evolving Economy conference. This year’s Evolving|E featured thought leaders in consumer and fintech from Brex,, Northstar*, Novo*, Stripe, and more. Not only did we leave energized with new insights on consumer and fintech, but we also enjoyed catching up with old friends and making new ones. 

Evolving|E continues to reaffirm the importance of community and relationships in helping founders build and realize their visions. Here are some highlights: 

What do founders need to know about today’s public markets?

Get your startup on the road to profitability now: Public market expectations for the first wave of consumer tech companies were defined by converting eyeballs to revenue. Expectations for the second wave will focus on converting revenue into profitable growth and will be achieved faster than the first, says J.P. Morgan’s Global Head of Equity Capital Markets Achintya Mangla. With this shift, “I actually think you will come out of the cycle with more sustainable, more long-term, or solid companies,” he says. 

The greater emphasis on profitability is affecting startups at all stages: “I think what's not being forgiven in the public market is that if you're super large in scale, have a billion-dollar plus of revenue, and are still not profitable, then something is missing in the model—whether it's just that you're spending too much on sales and marketing [or] you're not efficient enough,” says Lucy Wang, Managing Director, Equity Capital Markets at J.P. Morgan.

How can startups and scaleups strengthen their position coming out of a recession?

According to Neil Dalal, J.P. Morgan’s Managing Director, Technology Investment Banking, today’s pre-IPO consumer tech companies can prepare for future IPO by: 

  • Focusing on reaching profitable unit economics
  • Meeting institutional public investors multiple times before the actual IPO to build a rapport and track record for delivering
  • Practicing internal forecasting and being accurate. Public market valuations are largely affected by missing, meeting, or beating expectations. 

According to VC investors like GGV’s Robin Li, it’s critical for fintechs to expand products horizontally and build a strong credit risk team to set foundations for profitable growth.

What else can founders focus on right now?

Experienced consumer and fintech operators from Novo, Stripe, and other leading companies outlined tactical strategies for founders, including:

  • Building infrastructure requires a long-term view, not just the fastest go-to-market: When it comes to fintech, this long-term view is particularly important. Rares Crisan, who was previously a Chief Technology Officer and a Chief Information Officer before joining GGV as its VP of Technology, compares building a company’s tech infrastructure to planning city roads. “Fintech is a regulated industry, so the decisions you need to make for today and tomorrow are impacted by more than just your growth—you need to account for things like licenses, certifications, audits, etc…” he says.
  • Creating a product that provides customers with speed, access, and connectivity: Novo* Founder and CEO Michael Rangel says that one of the questions he continues to ask himself is: “How do we connect SMBs to the world around them while centralizing their finances so they have a better chance to succeed?”
  • Obsessing over customers: GGV Venture Partner Huey Lin spent 12 years at PayPal in a variety of leadership roles before becoming the founding COO at Affirm and then President of Asia at Flexport. For her, it’s all about “customer obsession and really, really thinking about what win, win, win could look like … [Have that] type of mindset of thinking, ‘How do we reach as many as possible? How do we do it in the most efficient way possible? And what would that take?’” 
  • Leveraging partnerships: Stripe’s Head of Payments and Commerce Partnerships Erika Wool looks for opportunities when “we can work with an external company and actually help them reach Stripe’s users … Because we've helped the partner lower their costs of reaching new businesses, we've helped our businesses get access to more choices.”

What fintech products are founders building today?

Founders are addressing major gaps in areas like:

  • Employee financial wellness: 42% of U.S. workers who earn $100,000 or more now living paycheck to paycheckthe compensation systems that are in place are no longer enough as a default state, says Northstar* CEO and Co-founder Will Peng. 
  • SMB neobanking: Digital banking options are plentiful for consumers and enterprises, but there is a notable servicing gap for small- and medium-sized businesses, says Novo’s* Michael Rangel.
  • Corporate spend management: Mid-market and enterprise companies have increasingly global and complex operations and need sophisticated financial software to manage it, says Brex’s Head of Global Financial Products Erica Dorfman

What is embedded fintech anyway? And why are investors excited about it?

Financial services are inextricable from the flow of commerce—in order to enable better commerce to happen, you need to have fintech right at the source of where transactions are happening. Here at GGV, we’re already seeing that fintechs that embed themselves into commercial platforms to distribute financial services will benefit from lower customer acquisition costs, greater access to proprietary data for superior underwriting, and increased trust with customers through partnerships with larger platform brand names.

Embedded fintechs benefit from platform distribution, but platforms that embed more financial services also increase take rate and ARPU (average revenue per user) and drive customer stickiness. “The more products and services that an end customer is now dependent on you for is a win-win,” says Stripes Partner Saagar Kulkarni.

Stay tuned for more embedded fintech updates!

*Represents a company in GGV’s portfolio