BBVA API Market
Good projects, with sound teams and scalable ideas, will sooner or later end up finding investors. Although with caution and insisting on the importance of having a clear business model, major investors and fintech executives brought together in Madrid by BBVA at the FinTech University have ratified the good time for the sector, with revolutionary projects making progress and business angels and institutions prepared to commit to them.
“The key is to persevere. If you have passion, nothing will stop you. Focus and don’t try to do too many things at the same time; solve your problems one by one,” was Reshma Sohoni’s advice to the participants.
Executive director of the seed capital fund Seedcamp and one of the most powerful women in the European fintech ecosystem, Sohoni explained that when financing startups your team should essentially value two aspects: they should have disruptive technology and they should democratize services.
“Can you create a global digital brand? And can you do it faster than other companies, media or institutions? Those are the key questions we ask ourselves,” explained the British investor, adding that to do so it is essential to have a solid team and a platform strategy.
For Juan López Carretero, head of Digital M&A at BBVA, “perseverance is all well and good,” but he recommended that technological entrepreneurs should look on each failed meeting with investors as an opportunity to learn.
“If a fund rejects your project, try to discover the reasons why. If investors agree about something that does not work in your project, that they don’t see clearly…. perhaps you should analyze it in depth and look for a solution,” he said.
Speaking to an auditorium full of entrepreneurs eager to discover keys for taking the great leap forward, the personal account of Taavet Hinrikus and his experience as creator and CEO of Transferwise, a poster child of the sector, was one of the day’s highlights. Introduced by Shamir Karkal, head of BBVA’s Open Platform and host for the event, Hinrikus explained in simple terms how his case is not so different from other great success stories.
“Our beginnings were tough, and it took us time to get the figures to balance. We managed to get people to start talking about us thanks to a friend, who knew someone in Techcrunch and who mentioned us in a post… that’s how we got our first client,” he recalls.
Hinrikus, one of the creators of Skype, believes that one of the major differences between fintechs and other startups is the trust that they must generate. As was seen in other panels and presentations during the day, the trust factor is key to the successful construction and launch of financial services in the digital era.
“All fintechs have to find a way of winning users’ trust. It is a major barrier, and it will always be one for us. At the end of the day, if users don’t fully trust their banks, why should they trust you?” he pointed out.
Thus he recognized that the best marketing technique and what works best to overcome the lack of trust is word-of-mouth and recommendations from service users. “If you have a good product, they’ll end up talking about you” is his motto, and that is how they have managed to win the trust of more than a million clients.
With respect to the relationship between fintechs and traditional banking, Hinrikus insisted that it is a difficult combination, as “we are working and competing with them”. “But banks are not stupid, they know that they have a limited time to get their act together. So the smartest have decided to work with the fintechs. It’s difficult, but it’s the most reasonable thing to do.”
In his opinion, one of the competitive advantages is speed of transactions. In 10 years’ time, he forecasts, banks will have transformed themselves and when that time comes, “the way we compete will be very different.”
Further information about Fintech U:
Various case studies are used to show how open finance enables the financial inclusion of SMEs and the economic growth of developing regions.