Last week, we had Caribou Honig of QED Investors on the podcast and I said that his portfolio is one of the strongest in fintech. If I had to name the top investors in the next generation of finance companies, Charles Moldow of Foundation Capital would definitely be near the top of the list, as well. Charles joins us this week on the Tradestreaming Podcast to talk about his thesis behind why he likes to invest in a trillion dollar industry that, in his words, “doesn’t do a great job servicing its customer base”.
His white paper, A Trillion Dollar Market By the People, For the People is essential reading for anyone who wants to know about the marketplace lending space: its size, structure, and potential. We’ll include a link in the show notes to it. His current portfolio includes auxmoney, BTCJam, Finxera (formerly Bancbox), LendingClub [IPO 12/11/14], Lending Home, Motif Investing, and On Deck Capital [IPO 12/17/14].
I think you’ll find my conversation with Charles to be thought-provoking — pay attention to why he prefers to build standalone B2C finance companies as opposed to firms that partner and sell into incumbent financial institutions. Contrarian and a very interesting point.
Listen to the FULL episode
In this episode, Charles shares:
- his thesis on why he likes to invest in early stage fintech
- why fintech has been relatively off the radar screen for many venture capitalists
- his preference building B2C companies in the financial services space and why B2B firms have a hard go at it
- how his white paper changed how we view peer to peer lending by renaming it the marketplace lending industry
- why he turned down investing in Lending Club when he first met them in 2009 and why pulled the trigger in 2010 and invested
- the struggles of matching supply and demand for a consumer financial marketplace
- the challenges originally faced by OnDeck Capital and how the company solved them
- the opportunity to market to millennials and the challenge the generation (with rising debt and weak wages) poses for financial firms
- his view on the heating up of valuations in the fintech space
- his firm’s interest in insurance and why it could be an exciting, investable space
- Foundation Capital (Charles’ firm)