TechStars CEO On The Future Of FinTech

Key Takeaways

• While cryptocurrency remains questionable, blockchain applications and Web3 have plenty of business potential.
• The incubator CEO is excited about development in Africa, notably Kenya and Nigeria.
• AgriTech and FinTech are on the cusp of major leaps and improvements and remain a focal area for private investments.

Sitting at the top of any business gives you a unique view of the economy and emerging business trends. This is even more true for Maëlle Gavet, Chief Executive Officer of TechStars. As the leader of a global business accelerator with more than 1,000 portfolio companies and nearly 400 successful exits, Gavet has her finger on the pulse of the next big things happening in technology across a wide swath of sectors and business models.

A member of the Q.ai team was lucky to sit down with Gavet at the recent Collision conference in Toronto. Here are key insights she shared regarding the next big technology investors may want to know about.

Cryptocurrency isn’t Blockchain

As a hot topic at the conference on the tail end of several high-profile cryptocurrency failures, our first questions for Gavet focused on the future of cryptocurrency. Gavet was skeptical about endorsing cryptocurrencies but sees value in the growing blockchain industry, which is the technology powering cryptocurrencies, NFTs, and other projects.

“The blockchain application called “crypto” remains for me a question mark about how this is going to evolve,” Gavet shared. “I think there is a highly speculative aspect to it, which we’re seeing first hand right now.”

However, a crash in crypto prices doesn’t mean blockchain isn’t worthwhile. “It does not change the intrinsic value of blockchain technology and the decentralized approach of Web3.” While TechStars isn’t heavily invested in cryptocurrency, it lists Chainalysis, a blockchain data analysis firm, among portfolio companies.

“This is really early on,” she continued. ‘If you think of “Web1’ and the up and down to ‘Web2,’ there’s always a bump in the road when innovation comes around. I remain very bullish on… blockchain and Web3.”

Gavet explained that while the media has focused on direct-to-consumer blockchain applications, “most of the impact is going to come from things that are totally transparent to the consumer.” Business-to-business and backend developments in company operations leave plenty of room to explore, develop, and mature in the years ahead.

Africa Is A Hotbed Of Innovation And Opportunity

Just before our meeting, Gavet attended a dinner for Black business founders. She noted several startups represented from Kenya and Nigeria. The population of Africa is approximately 1.4 billion. With more than 200 million residents, Nigeria is one of the fastest-growing countries in the world.

Lagos, Nigeria’s capital, has a metro area population of 21 million. As a hotbed of innovation, TechStars picked Lagos as the site of its first in-person accelerator program in Africa. Others are found primarily dotting the United States and Europe. Gavet and her team have high hopes for their first move into Africa, “We think there’s a lot more coming from there.”

Investment opportunities in Africa span from financial technology to communications to agriculture. Growth opportunities abound in quickly developing and growing metropolitan areas. While the exploitation of Africa’s natural resources hasn’t served Africans very well, education, technology, and expanded internet and smartphone access offer this continent a bright future.

Financial technology and agriculture technology are resilient

The war in Ukraine put the world’s attention on the “breadbasket of Europe.” As a top food exporter, strains on the supply chain here ripple worldwide, as many United Nations programs and foreign bakeries rely on Ukrainian exports. At the same time, “people are examining the environmental impact of eating meat and fishing more.”

While there has been a public market backlash against ESG (environment, social, governance) investment strategies, Gavet still finds investments related to environmental sustainability a smart place to look.

“I think the ESG label has been used and abused by way too many people,” Gavet explained. “And yet, you’re also seeing such an incredible flow of entrepreneurs in this area. For investors like us, there are phenomenal investments to be made in this area.”

If you like the idea of owning a portfolio of stocks around technology, agriculture, cryptocurrency, and other themes, check out Q.ai’s emerging tech investment kit. Q.ai offers a unique, AI-driven approach to investing in the industries where you expect to see the most success.

Strategic investments can still pay off

Along with pain in the stock market, there’s “definitely a slowdown [in investments], no doubt.” She shared that there’s still plenty of investment capital available to deploy, but investors are concerned that public market valuations are too high. “That then means, in the private markets, you see companies won’t go public at the values we were expecting.”

Gavet sees many private investors maintaining a wait-and-see approach before making large investments. When stock markets are down, investors and companies are extremely wary of a down round. If companies can hold off on fundraising until 2024, Gavet suggests, they may be able to fundraise at much more favorable valuations.

In the meantime, companies are looking for disruption opportunities as much as ever. From a new 911 service in Africa to pushback on bank fees in developed economies, the business world remains quite busy despite the risks of an economic slowdown.

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