Anthemis CEO and General Partner Any Nauoikas joins ForbesWomen Editor Maggie McGrath to talk about the VC market in the FinTech space, and the importance of diversity to capital markets and the overall economy.
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
0:00 Introduction
1:52 Any Nauoikas On Investing In The FinTech Industry
4:48 Any Naouikas Shares Her Perspective On Business Transparency
7:41 Women Thriving In Investing And FinTech Spaces
12:44 Have Diversity Norms Changed In The FinTech Industry?
15:22 What Makes Someone A Good Investor
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
Stay Connected
Forbes newsletters: https://newsletters.editorial.forbes.com
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com
Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
0:00 Introduction
1:52 Any Nauoikas On Investing In The FinTech Industry
4:48 Any Naouikas Shares Her Perspective On Business Transparency
7:41 Women Thriving In Investing And FinTech Spaces
12:44 Have Diversity Norms Changed In The FinTech Industry?
15:22 What Makes Someone A Good Investor
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
Stay Connected
Forbes newsletters: https://newsletters.editorial.forbes.com
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com
Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
Category
🛠️
LifestyleTranscript
00:00Hi, everyone. I'm Maggie McGrath, the editor of Forbes Women. We are here at Nasdaq MarketSight with Amy Noyakis.
00:06She is the founder and CEO of Anthemis.
00:11Amy, thank you so much for being here. Thank you so much for having me. You started investing in fintech in
00:162008, probably before most other investors, and I just want to read you a few statistics about where we are right now.
00:23So funding for fintech startups was
00:26$141 billion in 2021. That dropped to $75 billion in 2022.
00:33$39 billion in 2023.
00:36What is the state of funding for fintech in 2024?
00:40Well, it's been, as you can imagine, a very intense and in some cases bizarre couple of years.
00:46I have to say from our perspective, we've been at this for quite some time.
00:51You know, the market needed to cool down. And I think sort of the last, certainly 2022 to end of last year,
00:58that cool down was incredibly warranted, right? There's two things that cause problems in a venture market.
01:05When a founder thinks their company is worth a certain amount and when somebody pays them for that.
01:10And if they're not aligned, then it can create froth and all sorts of problems. And I think the good news is
01:17we got rid of a lot of the sort of folks coming into the market that maybe didn't belong there from an investor perspective.
01:24A lot of us who are currently and actively investing in the VC community have been here for a very long time.
01:30And I think for fintech in particular,
01:32that's really important because this is not a market that is sort of open to everyone, right?
01:37You have to really understand the market dynamics.
01:39You have to understand the regulatory framework that we're living in to be able to properly invest in fintech companies.
01:44And I really do think we needed some of the folks that were sort of coming along and giving it a whirl to disappear.
01:51Sorry.
01:52Giving it a whirl with fintech.
01:54Talk about the market conditions. Talk about the regulatory environment. We're in an election year.
01:58What are the three or four factors you find yourself thinking about the most these days?
02:02Well, so we're early stage investors and largely all of our work is in the early stage.
02:06And so that makes it sort of easier to not think about this year or next year.
02:10But really we're looking at kind of a 10-year cycle.
02:12We have been one of the earliest investors from a thesis perspective focused on embedded finance,
02:17the idea that finance is and should be ubiquitous inside of our economy.
02:23And the health of our economic system in large part relies on
02:29the health of that financial system.
02:31And so when we look sort of five, ten years out, we continue to think about how do we find the infrastructure opportunities
02:38that will
02:40fuel the entire system and in the best case scenario
02:43become invisible. And those are the
02:46often less sexy trades in the market, but they're the ones that can
02:50yield the highest return. And also it requires
02:54having an
02:55insider's mindset in terms of how the markets work, but also recognizing that the ideas can come from anywhere.
03:01So you've invested in companies like Betterment and eToro among many, many others.
03:05But I think those are two of the more well-known companies in your portfolio.
03:09And one of the things that we were talking about before we got on set is
03:13is the term fintech outdated? Because I don't personally interact with finance without technology.
03:19It's almost all on my phone, all on my computer.
03:23I do very, very little with a pen and paper. And when you started in 2008, the idea of embedding technology into finance
03:30was a little more novel. So are all finance companies fintech companies these days?
03:34I started investing in 2008, but before that I was in what has now become the fintech community since the mid to late 90s.
03:40And I think that that
03:42is what people sort of have forgotten, right? That our job as investors in financial services technology
03:48should be to put ourselves out of business, right? If the
03:51digital revolution takes full hold and the
03:54rails of our financial system become
03:58invisible, then we win. We all win, right? Because it means that it's working more equitably.
04:02It means it's working more transparently, and it means there's more access. And that's what we
04:06optimize for at Anthemis all the time.
04:08I will say though that when we first started, it's kind of music to my ears to hear you say that, you know,
04:13is fintech obsolete? When we started, we used to talk about,
04:16and I remember going out early days to
04:18investors and trying to get them to back us and talking about how we believe the digital revolution of financial services where we could
04:24create, you know,
04:25invisible rails in the financial, and people would just glaze over. And so at a certain point around 2014-15, we're like,
04:32just call it fintech. That's what everybody else is calling it.
04:34We cannot be any, you know,
04:36this is one where we don't want to look any different than anybody else, and so let's go for it.
04:39But it is going away. I think people are recognizing that you can't have financial services without technology,
04:45and you certainly can't have an economy without a healthy financial system.
04:48It's interesting that you talk about invisibility being a good thing because you alluded to there being transparency
04:55there, but I hear invisible and I think less transparency. How do you square that?
04:59Well, I think it's about, you know, and I've been thinking a lot lately about the idea of friction, and what does friction
05:05mean inside of an economy that has been largely digitized? And for me,
05:10you know, I feel there's a certain responsibility to recognize that just because something is invisible or works really well
05:16doesn't mean that we don't want to optimize for putting the right types of friction into that
05:21business model. And I think that there's, you know, when we look at our thesis,
05:25I think there's a longer-term plan to bringing some of the friction
05:28we've maybe optimized out of the system back in and replacing some of the kind of,
05:35you know, the infrastructure stuff that just works better with that human element again, which I think we're missing.
05:41What's a practical example of the right balance of friction and frictionless?
05:45I don't know if this is the right example,
05:47but I think when I think about Uber as a perfect example,
05:49it is ultimately a payments company, and the reason why Uber works and has worked so well for all of us is not because
05:54their cars are any particularly better, the drivers are particularly better, but because now we can schedule and or pay for them on
06:00a phone, and that is
06:03finance. That's FinTech, right? That's what that is. But when you walk into an Uber every morning,
06:08you don't say hello to the person. They don't say hello back to you.
06:11You're making a contract with that person, and they get paid, and you get where you need to go.
06:15But you're putting yourself in that particular moment,
06:18whether it's a five-minute drive or an hour drive, in the hands of another human being in a car, a motor vehicle.
06:23And I think we need to start thinking a little bit more about what that means, right?
06:27Is there a way for us to continue to behave as humans in this society
06:31without still using the efficiency of technology and the transparency and the access that it gives us,
06:35but doing it in a way that brings some of that human friction back in?
06:39So as you're looking for new investment opportunities, is that
06:42happy medium balance of friction one of the aspects that you're looking for in new businesses?
06:47I think so. I mean, I think one of the things that I've been trying to figure out is, you know,
06:51when it comes to AI, for example, everybody and their brother is talking about AI in every industry.
06:56We kind of joke that now if you send us a business model,
06:58just sort of take out crypto and insert AI here, and it's the same business, just different words.
07:03And so we're being very careful about the AI businesses that we're looking at.
07:07No doubt that AI will have a massive impact on the landscape of business and the landscape of financial services, for sure.
07:13I think it's too early to kind of call it.
07:17And so when you look at a business model that inherently has AI at its core,
07:22a big part of what we look at from an early stage perspective is who are the people
07:28deploying this AI? What is that founding team like? What do they care about? What are their values?
07:31Why do they create this company? Because at the end of the day, it's the people who are creating the AI.
07:37It's not being created in a vacuum.
07:40Talking about not creating technology in a vacuum and having diverse and inclusive perspectives,
07:46I know you have paid attention to diversity and inclusion as you have made investments over the years.
07:55And we're in an environment now where DE&I is under attack.
08:00How do you navigate this environment where diversity is in some corners of the internet becoming a dirty word?
08:07Yeah, I mean, Maggie, I wish I had the answer. It is so hard and it can be at times exasperating.
08:15I personally started Anthemis, not in large part, exclusively because I wanted to do something that
08:21made a difference inside of financial services. And this is what I could do.
08:25And from day one, we put DE&I at the top of our list. It was before there was an ESG moniker or
08:31even an impact rule of thumb. And it was just good business. And it was the right thing to do.
08:37And without trying, we talk about it being sort of organic diversity. Without trying,
08:42we have a team that is always just around the 50% gender diversity mark. 65% of our investment team
08:48are women. And the leadership across our IC are women as well. And what I do know for certain is
08:58that when we look at business and potential trades, we're looking in very different ponds.
09:08Like there is nobody else out there scoping the fintech world the same way we are. And that has
09:12a lot to do with who we are as a team. So we can do it in one of the most non-diverse communities
09:19out there. Anybody can do it. And it is our responsibility to do it. But it starts with
09:24putting your own mask on. You have to make sure that your team is diverse. And I guarantee you,
09:28it's going to change the type of transactions you see. Because my team swims in different ponds
09:32than everybody else. They just do. And their communities are different. And that's how we
09:36get the best deal flow, I think, the best deal flow in the industry. Your perspective is one
09:40that's been achieved through your own experience. You started your career in the Peace Corps.
09:48How do you go from the Peace Corps to running a VC firm and maybe more specifically to what we were
09:55just talking about? How does that fuel your perspective as you're building your firm,
10:00as you're sourcing investment opportunities? It certainly influences everything. Everybody's
10:07background is kind of where they come from. And for me, I grew up 100% feeling like an outsider
10:13in the community that I grew up in. Socioeconomically, I was not of the same community.
10:18And that was hard. And I knew what it felt like to be the other. And so as I traveled through life,
10:24I had just, in my mind's eye, a kind of a foregone conclusion that others mattered.
10:32And yeah, I think that's kind of where it started. I think the Peace Corps was an interesting
10:36experience for me because I went and spent my time in Sub-Saharan Africa and Cameroon. And
10:41part of being the other there was incredibly educational because I hadn't had an experience
10:48around race that had ever lived in my life as living in a white body. And that was
10:56extraordinary for me. And I think I just knew when I came back that I didn't want to do anything that
11:01didn't involve all. And I think we get really, really quick in our world to keep ourselves
11:08focused just on our kind of immediate. And a lot of times, those communities aren't diverse.
11:13And we have to work a little harder if you want to include all.
11:16You are someone who's focused on diversity, as we've just been discussing. Sometimes I feel like
11:21these conversations happen in a bubble. I have a lot of these conversations. Women's spaces have a
11:25lot of these conversations. How do we have more of these conversations in the communities that
11:31need to hear them? Yeah, that's a great question. I have been thinking a lot lately about my own
11:36role as a sort of 50-something woman in financial services who spent my entire career here. And I
11:42have been thinking a lot about the generation of people that came before me and what my role is
11:48to honor them. Because I think if you think about sort of 80s Wall Street, that was a really tough
11:53time to be a woman on Wall Street. And I think the more I recognize why I didn't have any mentors and
11:58why I didn't have anybody fighting for me, I get it now. And I don't think I got it as much then
12:04when I was younger. And so I've been spending a lot of time now honoring that community and
12:07thanking them, frankly, which I think all generations should do. Only on other people's
12:13shoulders do we stand. And I think that's a big part about this conversation because it's going
12:18to get really hard in the next couple of years, like really hard. And if we're not collectively
12:23as women supporting other women, I don't think we're going to win. And I don't think we're going
12:27to make the progress we need to make. And so I guess the one thing I would encourage everyone
12:31to do is to recognize the people that have fought the good fight so that you can exist and to
12:36recognize how important that is as you're giving back and leaning in. When you say it's going to
12:41get harder in the next couple of years, in what respect do you think? Look, I have to wake up
12:47every day optimistic that the work that we're doing at Anthemus is making a difference. And I
12:52do believe that the conversation around DEI, the conversations around investing in the financial
12:57system to make the world a better place, we played a huge role in that. I don't know that everybody
13:02believes that's why one should be a VC investor, but it's what we believe. It's what I believe.
13:06I think that it's becoming lonelier and lonelier now that we're seeing how many people use DEI
13:13simply as an opportunity virtue signal. And there were a lot of conversations happening in 2020.
13:19It's that moment between 2020 and 2022, it felt like we might actually do something. We might
13:24actually make a difference. And it got really easy, really fast when the markets got tough
13:30to pull away from things that actually do have a positive impact on the economy and a positive
13:35impact on business. But I feel like the only way to keep it going is for all of us to sort of
13:41collectively agree that we're going to. And it's going to be hard because I think there are going
13:45to be lots of systemic issues against us calling for different approaches. And they're not going
13:52to necessarily focus on the approaches that are important around supporting gender equity inside
13:59of VC, business, financial services, everywhere. So with respect to diversity, equity, and inclusion,
14:07the next few years look challenging. But with respect to the fintech fundraising environment,
14:12you're a little more optimistic. And I asked you about what entrepreneurs are asking you these
14:16days. And you said, I think people really want to know that when we say it's going to get better,
14:21that we mean it. That we mean it. And we put our money where our mouth is, right? I think that
14:24there was a natural cooling off of the industry that was well needed. But now, those of us who
14:30have capital to deploy and who know this industry and who've been here from the beginning, we need
14:34to be starting to invest. And we can't be alone in it, right? We need to partner. We need to
14:39collaborate. And we need to start this market up again. I think there's huge opportunity for the
14:43future and massive opportunities for some of the companies that we're seeing in the pipeline.
14:48But if we don't start and put our money where our mouth is, then I don't know how it gets started.
14:52I think this is a great moment for fintech companies, but it's a great moment for VC.
15:00Any true value creation in VC in the past, call it 50 years, is always higher valuations and higher
15:10return and higher success rates when you're in a really down market. And this down hit that we've
15:15had has been well positioned to allow us all to kind of question why we're here.
15:22And it's forced you to do more with less, which ultimately makes you a better investor.
15:25Absolutely. And we've always had, and there's a lot of attention right now given to smaller
15:29funds. And I think I wouldn't want to be sitting on 600 million plus in early stage capital to
15:34deploy right now for a vintage 2024 fund. For us, it's always been quite easy because we've
15:39kept our fund sizes small. And I think that's going to continue to be a trend. It makes you
15:44a more conscious investor. And I think it helps to be capital constrained because it forces the
15:52choice mechanism. You don't have obscene money to just put everywhere. You have to actually make
15:56conscious choices and you have to decide. And I think from a portfolio construct perspective,
16:01that is a much better and smarter way to invest in the early stage. And we've been consistent
16:05with that from the beginning. So DEI will get tricky. Funding environment will get better.
16:12The idea of too little friction keeps you up at night. Any final thoughts, trends or predictions
16:19you have to share with our Forbes audience? Well, oh gosh, I guess I just, you know,
16:25to anybody that's sort of out in the VC community right now, a founder that's trying to start a
16:30company, I would just encourage everyone to just keep at it. I think, you know, anytime there's a
16:35disruption in a market, it can throw people into a bit of a tailspin and you see a lot of people
16:42leave, hopefully the right folks have left. But if you have a good idea and you believe in what
16:46you're doing and you really believe it can make a difference, there will be funding for you out
16:49there. Do not give up. You will find your path. And we need more entrepreneurs like you.
16:56Amy Nayakis, thank you so much for joining us at our studio at the Nasdaq Market Site.
17:00We so appreciate your time and insights. Thank you, Maggie.
17:12Thank you.