Personal Finance Management for semi-dummies …

Just back from a 36 hours trip back from Perth, few hours in Brussels and today in London (kind of a tradition now spelling from where I write)

PFM is a very interesting space.
Roughly, in Europe, at least one startup per country (in some cases more than one) is a PFM tool.
What is it exactly?

Personal Finance Management

It s the modern version of Microsoft Money, obviously way more connected, social, big data aggregator, and profiled (in fact, almost no point in common with Money, but I need a point of reference for the few dummies who never heard about PFM).

Often mobile-only, most times web and mobile, almost never web only.
These tool take a snapshot of your finances, account, invoices to pay, loans to reimburse, forecasted expenses, and they are able to tell you things like:

– hey John, you spent more for coffee this month than the previous one
– if you want to buy that 1000 USD bicycle, you better start saving for the next three months otherwise you won’t have enough money
– you might need a small loan otherwise you won’t see the end of the month due to some unplanned expenses cumulated with your actuals
– you could save have saved 300 USD in the last 6 month, why don’t you try …

and so forth..

Some of the, are connected with an e-invoicing platform, so you can pay your bills directly, some with a investment (trading) platform, some other directly with your bank so they can cross-sell you other financial products.
Some others they are embedded in a payment system (typically a branchless bank, mobile only, like Moven or Simple).

All this to say, it s big data mashed up with financial information most of the time free for the users and paid by your bank or by a commission on the services they can sell through that screen that you are suppose to consult A LOT.
This generates more data, etc etc. wrapped up in a usually beautifully designed user interface


This is my point.

Not sure about pure, standalone PFM platforms.

Let s face it (and this is the part where common sense apply and would love to read your opinion): if I am rich enough (not a millionaire, these guys don’t even know what to pay an invoice is like, not anymore, and not really worried on planning) do I really care about few hundred dollars well forecasted? Or if I spent 75 or 95 dollars at Starbucks last month?
And if I am really on a tight budget, do I really care about a fancy way to remind me I am broken, or close to be?
Another pair of shoes is an aggregator for payments or statements for me personally or for my business, @as I talked about in my previous post.

Also, these platforms are scalable on a country basis. In other words, probably my Starbucks in UK or France would not be counted in my precious coffee budget forecast 2014/2015…

I see PFM as a component of something bigger. With payments, loyalty, semantics, e-invoicing, and – why not – a nice expresso.


Stay tuned



Alternative lending landscape (for dummies…)

I think this is a good opportunity to talk about something concrete we are actively looking at, explained in a way that (I hope) will catch the attention of everyone (including my mum, who I can see right now with her dictionary on… And no, she does not use Google translate)

The two big families of the new lending landscape are P2P lending (person to person) or SME lending (to small businesses).
There are also some hybrid versions of it like corporate lending money to their employees or persons lending a fraction of the capital to a business, in a crowd funded way, but I would say these are less populars.

Let s start with SME lending.
There is no way a bank can profitably make a 20K loan to a business.
The cost of the paper and the time of the employee(s) required to assess, release, monitor and eventually recover the money back will easily eat all the mark-up that the institution would possibly charge (unless they apply illegal outrageous interest rates, which would put them out of business anyway).
This is what became the core business of many Startups of this space.
Use non-conventional (like aggregated data from the POS or geo-localised transactions data) and conventional (good old bank statements) data to make an assessment on how likely is the chance to recover the money if and when the loan happens.
Now : there are two big families of these Startups (I know, life is a binary tree) : the one competing with  the banks (by collecting their own capital and lending their own money) and the one trying to re-intermediate the banks in this process (in other words, selling their platform and services to the banks so they can use their capital  to perform the loans).

An example of the latter is Advanced Merchant Payments, out of Hong  Kong,
focused on the provision of working capital loans to SME’s based on an algorithm that credit scores Merchant payment and bank account data.
IWOCA, focused on the UK and European eTailer market uses an algorithm to provide working capital loans to eTailers based on their digital footprints across Ebay, Amazon PayPal etc. The latter is an example of a startup in competition with banks.
They are both doing quite well, and of course I will not put my Venture Capital hat on as the purpose of this is purely informative.
The default rate (the loans not repaid back) is reasonably low, and the return is good. Remember, for some businesses there is no other way to have access to capital.

Let s talk about P2P lending.
This space is very crowded, and actually even easier to understand : if I have a decent social presence, if my network is solid, if I am a regular customer of e-commerce platforms (like eBay) that allows some data about my transactions to be pulled off, if on the top of it I give access to my bank statements, you can have a quite educated guess whether or not I will be able to repay a small loan that I am asking.

Interesting enough, this “universal, empirical credit score” can be built using a number of different techniques, including NPL and psychological questionnaires (I am thinking specifically to EFL that releases microcredit based on a very specific profile questionnaire, started in developing countries.
Recently, many Startups have arisen just using Facebook and LinkedIn to assess credit worthiness. Still early stage, but promising.

P2P lending is booming in countries (like Latin America) where the Consumer loans have very high interest rates, but it started in US and more maitre countries as data were of course richer and available in an easier way.

Here is a US panorama of the most famous P2P lending platforms.
I am – on purpose – leaving out the crowd funding, for which a separate post will be due.


If any of you bothered to read so far, would be great to hear your thoughts on this. Obviously, if you are in the Fintech business you should have stopped a while ago.
The reason for this post is that I saw this morning on my Facebook wall a dear friend asking me : “Matteo, can you explain to my step-father why Bitcoin is or can become so important, in words he can understand?”.

I leave that challenge for a future post, and starts with something else…

Stay tuned


Fintech Bootcamp rocks… #sbtvc proudly rocking with them!

In the past 24 months the rise of Fintech incubators, all over the world, has taken an incredible speed.
Looks like I am not the only one thinking that the disruption will hit our beloved banks (and financial institutions in general) sooner rather then later.

I have been quite on my blog recently, whilst my life has gotten busier than ever before, but the two facts are unrelated.
The reason why I thought this one was a good moment to “talk” is the launch of Startup Bootcamp in its very first Fintech instance, out if St. Catherine docks in London.


There are four point of attention I d like to make:

– the concept is great: 30 startups, 3 years, equity at stake, great network of entrepreneurs, tailored mentoring, no bullshit
– the team is awesome, and worth to mention another great chapter for my former colleague Nektarios (congrats dude), in all modesty brought to the Innotribe team by yours truly and infected with the innovation virus(es) to a point of no return – literally!
– the partners, the sponsors and the coaches of this adventure have a lot to say in the Fintech space, and I am talking about MasterCard, Lloyd’s, Rabobank, and many more I m sure you will hear a lot about very soon
– SBT Venture Capital, my fund, is proud to be one of the partners (which is kind of the reason why I am blogging this piece, obviously)

I must say I am quite familiar with this matter, in the sense that I always thought that the opportunity to take part of a qualified deal flow, vetted by the community, in the early stage startup space, and in a “sandbox like” environment was a good thing to do (all these drivers are already underpinning the Innotribe Startup Challenge).

Bank should do this too.

There are three different kind of attitudes towards startups banks are generally applying:
– “who cares, in any case what damage can they make, a fraction of a percent of our business?” (The “Dums”)
– let s watch them and simply buy the most successful one (The “Arrogant”)
– stay close. Try them. Eventually, invest. Learn from their lean approach. Engage. Get inspired (the “Smartass”)

So, Bootcamp is for the latter.
You (financial institutions) can stay around without necessarily invest in it.
We are planning to.
See you at the London st Catherine docks.

Stay tuned


WebWednesdays y la insostenible levedad del ser (una startup)

Nunca seré tan prolífico como mi amigo Chris Skinner, y – sinceramente – es una fortuna para mis lectores también… Pero hay algo que me gustaría compartir, y lo hago en español para dos razones:
– dentro de dos semanas, en Bogotá, hay #NeXTBankLatam y el sujeto encaja totalmente
– prepararme psicológicamente a utilizar el español, porque el Coaching y el Keynote serán en el idioma de Cervantes

Que son los Web Wednesdays¿

Unas reuniones muy chulas de startups en Hong Kong, organizadas por Napoleón, que también ha creado “the battle of the Apps” un nombre mucho más bonito para describir un Hackaton.

Hay denominadores comunes en todos estos eventos:
– la gente es más abierta a conocerse, pero todavía no se ha inventado una manera fácil, divertida, inmediata y eficaz de mezclar a la gente. He llegado sólo, son conocer a nadie, de humor cansado y asociable, y sólo he hablado con los speakers de la conferencia de ayer que me invitaron y llegaron al final del evento.
– ser “informal” parece obligatorio, los pocos banqueros con corbata (poquísimos, no banqueros, con corbata) se destacan como un burro volando – esta expresión me la acabo de inventar pero se que existe en otro contexto
– cómo en todas la comunidades, hay un poco de todo. El hecho de bañar el el mundo de las startups no garantiza una mayor densidad de celdas cerebrales
– hay una diferencia impresionante entre los que desarrollan, los que tienen ideas y los que saben vender ideas. Y si alguien hace las tres, o esta hablando en el Keynote o esta invirtiendo en startups ya

En general, es bastante fácil pasarlo bien, pero no porque es un evento de startups.
Lo pasas bien porque las probabilidades de hablar con alguien (o de escuchar a alguien) que tenga una historia que simule tu sed de aventura son más altas que en la mayoría de los eventos de negocio.

En otras palabras, los banqueros son lo más atrevidos, porque esté mundo es muy diferente de lo que ven todos los días pero también los que traen el mayor beneficio de estos eventos. Porque – potencialmente – pueden convertirse en chispas de innovación.


Es el motor de esos eventos.
Eventos donde no hay entrada, o si hay una es muy baja y tiene una cerveza incluida.
Ya sé, NextBank es una producción más importante, y se lo que quiere decir it granizar este tipo de eventos… Pero Fermín y Andrés tienen el mérito de desarrollar un ecosistema nuevo de innovación, como hicimos nosotros hace seis años con Innotribe, y me alegro mucho de contribuir a ese objetivo.

Colombia va a ser una sorpresa, he empezado a hablar con algunos de lo actores locales, y la verdad es que el tejido de las startups es bastante más desarrollado de lo que pensaba… Can’t wait¡

Como en español sonaría muy estúpido, lo digo en inglés …

Stay tuned