Episode 23: Venture capital in fintech with Luke Timberlake of Fintech Ventures and Arinze Akomas of Georgia State

Luke Timberlake, Partner, Fintech Ventures joins Arinize Akomas of Georgia State to explore the topic of venture capital in fintech. 

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Speaker 1 0:06

Welcome to the Georgia FinTech Academy podcast. The Georgia Vintech Academy is a collaboration between Georgia's FinTech industry and the university system of Georgia. This talent development initiative addresses a massive demand for FinTech professionals and give learners the specialized education experiences needed to enter the fintechs.

Speaker 2 0:26

The executive director of the Georgia FinTech Academy. Welcome to episode 23 of the Georgia FinTech Academy podcast. Today is September 17th, 2020. Uh, for those of you listeners that are back with us , uh, welcome back , uh, first time listeners. It is wonderful to have you, and we're really looking forward to today's conversation. I have Luke Timberlake joining me partner with FinTech ventures and [inaudible] , Acomas a student from Georgia state who has already begun to get involved in the FinTech industry in some meaningful ways. I'm looking forward to our conversation today.

Speaker 3 1:07

Welcome . Thank you for having me. Thank you for having me, Tommy , Luke.

Speaker 2 1:13

Um, let's start with you in terms of introductions , um, and tell us about yourself , um, your career, how you got involved with FinTech. Um, I know our student listeners are always curious to hear from the executives that join us about their , uh , career path into this wonderful industry.

Speaker 3 1:37

Sure. So my name is Luke Timberlake. I'm a partner with FinTech ventures fund. We are an Atlanta based venture capital firm focused on early stage FinTech and InsureTech companies. I went to school at Columbia university in New York and started off in financial services by going through the analyst program at bank of America Merrill Lynch, where I was doing project infrastructure and various financing for municipalities and companies that were trying to buy infrastructure assets. And I was there for three years and then moved on to a private equity firm that was just starting up at the time. And the private equity firm was buying parking companies. And so here, I got my exposure to Atlanta first off and also to FinTech where one of my jobs in terms of the asset management was to look at the 500 different locations that we had and go through PCI compliance for their credit card machines, which hadn't been done. And also look at the ways they were handling cash and taking payments. So

Speaker 2 2:50

Hang on, what kind of companies were these

Speaker 3 2:52

Parking companies like where I parked my car? Correct. And so as you've been in many garages and now it's changed really within the last five, seven years, you can swipe with a credit card or even use a mobile app such as park mobile, which is an Atlanta based FinTech company. And that didn't really exist. Like I said until the last five, seven years. And so we worked with companies like that and also went from an 80% cash business where cash obviously would go missing or B become unusable and go from 80% cash and 20% credit to the opposite, 80% credit and 20% cash. And so I was there for three years as I was coming down to Atlanta and, you know, through coming down and taking a survey of the landscape down here, I met my current partner on the fund Sergei, excuse me . And he had been an investor in Atlanta based bank and a few other fintechs over time and really saw an opportunity specifically with technology enabled lending. This was over five years ago at this point. And we started FinTech ventures with the goal of investing in early stage financial technology companies and now InsureTech as well. And so we've been doing it for over five years at this point, have 10 portfolio companies and are really focused outside of Silicon Valley. And wow , we still have holds in New York and, you know, look at companies in Boston. We're really looking at FinTech outside of the coast is what we call it and trying to find people that have products that are ready to go and pre-revenue, or generating nominal amounts of revenue and helping them grow and raise additional financing to go off to the races.

Speaker 2 4:42

Awesome. Um, uh, love it. Thanks for that background. Um, Marine's a tell us about you and , um , a little bit about your career at Georgia state and then you, you know, you have some remarkable either exposure to financial services companies and FinTech companies. Tell us about that.

Speaker 4 5:03

Yeah, definitely. Thank you, Tommy . Um, so my name is Lorenzo Comis . I'm originally Nigerian on born and partially raised. Um, I started Georgia state in the fall of 2014, originally a biology major , um, on a pre-medical track. I know, look at me now. Um, and so I went through the course of study in about two classes or a class away from graduation. I realized this just wasn't for me and this just isn't what I wanted to do with my life. Um, yeah, parents weren't too happy about that.

Speaker 2 5:38

So then after that ,

Speaker 4 5:38

That , um, I started doing a lot of, you know , soul searching and just realizing where exactly I see myself and just two factors that have always stuck with me right from moose , as far as I can remember, have been finance and technology. I mean, I love finances the way money moves and how it affects our lives and our standards of in all aspects and also technology. I mean, it's no, it's no secret that the world is in the middle of a technological revolution going on right now. And I was like, I refuse to be, to be left behind. And so , um, I was still kind of puzzled as to how these things kind of come together because I'm a traditionally, they're very, very , um, they're very vast and kind of spread apart. And so , um, I stumbled upon a , an event that actually Tommy helped put together on with BlackRock . And it was , um , basically an intro to FinTech for people like me that knew absolutely nothing about what exactly FinTech was. I think that was actually my first time coming across the phrase and mind you, I'm a computer information systems major, so CIS major . So I'm used to more, it's more, basically more so the business side of computer science. And so I'm coming into that into the program. I really learned what exactly FinTech was and how it's basically a force to be reckoned with and how it's taking over just the way the world does business and how I've actually been engaged with, with FinTech, you know , with apps like square and Venmo and things of that sort. But I never actually knew the name or like the actual name of what these, these avenues were called. And so after the event, I realized that, you know, I actually love this space and I mean, I really love the world of FinTech because for one it's still relatively a new, it's still relatively new and ever changing. So, you know, it poses a world of unknown possibilities and opportunities. And with all of this, it's still heavily regulated. So there's still this element of structure and order that comes with it. So, you know, it's not going into this field, I'm not in over my head. And so these things kind of solidified my decision to kind of go into FinTech. And then also this past summer, I was lucky to intern with bank of America, where I interned with the , um , global transaction services , um , within liquidity department liquidity team, where I helped with the launching of a , um , of a financial product that we'll be launching in a few. So I helped with the research and Intel and things of that sort. Um, so definitely that has been my, my short run with FinTech. And it's so crazy to believe that all of this started this January. Yeah. This January is when the event that seems like so far away with everything going on,

Speaker 2 8:14

Sitting around that table, right. That BlackRock had hosted us for lunch one day. And , um, that was, I thought BlackRock did a really nice job with that because it was very informative. And then they ended, it ended up being, I guess it was kind of once a week for maybe four weeks. And then they special topics that they would talk about. That's what I really liked. It wasn't, I mean, BlackRock's very interesting company, but it wasn't just all about BlackRock. I mean, there was a lot of let's we're going to help give you ideas that education on just the , um, certain aspects of asset management, like, you know, what are the different investment management types of trades and products and what's long worked . And , um, I thought that was really good. And then I know they did a session on like how to advice on how to best manage your own personal finances, which I really too . Um, and, you know, I think that was there too. We started the hat side idea , um, around a FinTech in Nigeria , um, conversation with, with folks in Nigeria because contexts , there's quite a bit of activity there and very meaningful , um, ancient standpoint happening in logos and then broader throughout the country. Um, and , uh, and we're lucky because we have Charles FET now professor or Dr . [inaudible]

Speaker 4 9:44

Chris.

Speaker 2 9:46

Yeah. And so Charles of course , um, the FIDI, he , he was a founder of inner switch, which is really a remarkable , um, payments network in Nigeria. And, you know, I've learned more about it and really appreciate now that there's aspects of that , uh, payment network that is based on inner switch that are more mature than what we have even here in the United States. Um, in terms of the bank bank transfer capability , uh , in particular, which was really, I learned a lot and that, so anyway, we had that event , um, just recently a few weeks ago , um, that , uh , I thought was really fun to just get, you know, engage , uh , on the FinTech and Nigeria topic. Um, but , uh, and then how you say a little bit more about your, your summer experience with , um, global transaction services, B of A's , uh , I mean, that's a huge, huge business for BFA . Um, and , uh, did you, I mean , you know, liquidity is an , is an extremely important topic and, you know, what's interesting, maybe are , I guess a question I have for you there is, you know, you were coming into a role looking at , uh, you know, this, I guess, this liquidity product that they'd been building at a time where there was, you know, there was a lot of stress put on , um, liquidity in the market . Um, as a result of , particularly in late March, early April, that, you know, the federal reserve had, you know , needed to step in as that , as they do very capably to help address , um, some liquidity challenges. But , uh, I was just, you know , like you're kind of there to interesting time. Did , um, did , uh, did , uh , you know, how was, how was that say a little bit more about it?

Speaker 4 11:43

Yeah. So this, this going in was like you said, it was a very interesting time. And I remember even prior to the internship, I stopped by your office to kind of talk to you then kind of get some, some wisdom about going, because I knew absolutely nothing about finance, especially , um , global and transaction services, because with bank of America, I'm more so familiar with the commercial banking and retail banking and things of that sort, but going in. So for just, you know, my fellow students that could be like, you may not know exactly what liquidity is. Liquidity is basically you're working long story short or working with the bank and you actually manage how the bank raises funds for its to , to kind of go about its business. And so with my project, I was basically helping them come up with a way for , um, companies that they were going to be investing in to kind of be able to , um, basically create a certificate of deposit account where the board, the money from the account would also be beneficial to the companies, as well as , um , um , a process called ESG, a particular concept called ESG where it's an environmental, social and governance. Yeah, exactly. So that was basically the project I was working on. And with COVID obviously the project was supposed to be stationed in Chicago, but I had to do it virtually from Atlanta here. And things had just changed. Cause there was a lot , um, obviously with COVID happening, a lot of banks and a lot of people were losing, a lot of entities are losing money. And so with the liquidity department, my job was to basically work with them to make sure that they're creating projects that will be able to sustain not just the bank, but also for future , um, for future future avenues to come because especially with bank of America, they came up with , um , an initiative where they pledged about a billion dollars to fund , um, came up with a billion dollars to fund. Um, I think it was racial for racial , um, basically the whole racial strife going on and also COVID um, for employees and businesses that have been in , um , that have been impacted by COVID. So it was a really fun in a way. So with liquidity, you kind of have to make sure you're coming up with different innovative projects that will be able to fund this on set goals. So that was basically what my , my , um, my task was to , in a sense to kind of support the analysts that were working on this project and give them Intel. And my job was to kind of look at this particular project that we're thinking about product that we're thinking about launching and see what other banks were doing and how they were doing it and kind of see how exactly we at bank of America can take it and leverage it and make ours better sense. So it was a lot of reading, a lot of financial review

Speaker 5 14:28

And those things I'm not sure, I'll tell you that the one I read was about 25 pages. I think that's one of Luke's favorite things to do is read financial reports. Not mine. I'll tell you that right now. I learned a lot though. I learned quite a bit,

Speaker 4 14:46

Especially relating to ESG. You learn quite a bit.

Speaker 5 14:50

Uh , that's fantastic.

Speaker 2 14:52

And I'm glad, I'm glad you've had such a rich experience in these last whatever six months or so, because it's, I mean, it's a big step, right? I mean, you went from nothing to throwing fire . You'd finished your degree in biology, right? I mean, you're hold aren't you holding a BS in biology. And so , um, and now, you know, you're , you're , won't be long before you're done with your business degree , um, has this , so I'm glad it's going well. I mean, we're excited to, to , uh, continue to find their ways we can help you as the FinTech Academy as you, but you're off to a phenomenal start. I mean, these are black , you know, BlackRock bank of America are, you know , very substantive players, our , uh, our industry. And so that's great. You've gotten them connected with,

Speaker 3 15:45

I actually started out at city . I should have mentioned this in the intro, but I had a summer internship at Citi in their TSS, which is the intelligence program at bank of America. And I think it's a great way to learn specifically about FinTech and the various products that a bank can offer to their customers that, you know, sometimes fly under the radar as opposed to the products in BlackRock that most consumers are using some form of in terms of ETFs or other investment products. So I think it's a great place to start your career, especially if you're interested in financial technology, you want to get hands-on experience. So yeah , same , uh, same program, different bank and yeah .

Speaker 2 16:30

Yeah. That's not treasury and transaction services, right. It's city, city TTS. Yeah.

Speaker 3 16:39

I mean they, all, all of the banks have a different, they all have a different name,

Speaker 2 16:44

But I mean, city's a good mention. Cause I mean, I have always thought of that, that TTS business is being kind of one of the, you know, one of the initial kind of big global commercial bank, treasury transaction services business, like they kind of really leaned in and built that , uh , up as our clear dizziness line. And then these others, like bank of America kind of followed of course JPMC, but there was CNO cities can be very interesting because it's truly , uh , kind of, of the kind of US-based banks. It was the first to really be a global player and really doing a lot with this TTS business to support global money flows, to support commerce. Um, so they'd be banking, you know, big, big multinationals , um, and then support the money movement that the, of course, these multinationals like Ford and McDonald's and , um, have all over the world there . So they would give super complicated , um, how to handle all the , um , liquidity needs working capital needs , um, through all the jurisdictions that these multinationals operate in . Um, it's really, it's a very interesting part of the banking business. Um, but Lou come , let's come back and talk , um, talk some more about , uh, FinTech ventures, like your, your role as a venture capitalist. Like how can you just tell us a little bit about like, what do you do every day and , um, um, how, how does, how does the role, what's the function of a venture capitalists and uh, in, in the world?

Speaker 3 18:34

Yeah, that's a great question. So what we do every day actually changes every day, which is partially what I like it or what I like about it. And primarily we're looking for early stage companies that we can invest in that we have a high degree of certainty, at least in our minds and our diligence that we'll be doing well. And either working to disrupt certain industries or primarily in FinTech there's companies that are working to solve certain gaps that banks or other large incumbents have not been effectively able to serve. So one area that we're particularly focused on is small business lending, for instance, where banks can't lend to certain customers because their cost structures are set up that they're not able to make money off lending to set customers. And so there's a lot of technology enabled lenders that are kind of filling this gap for many of the companies that are out there today, and it's become even more relevant as well because existing banks were not able to process the PPP payroll protection loans that occurred as a result of COVID and being able to support the businesses to maintain their livelihoods. And so a lot of financial technology companies stepped in and filled that gap. And we had a company that was able to help facilitate and originate these loans on behalf of the small business association. So really we're looking for companies that are solving existing problems or solving for existing gaps in the financial services market. That's kind of our thesis. And that involves speaking to hundreds, if not thousands of entrepreneurs over every year. And really you're only investing in less than 1% of the entrepreneurs when you pull up . But if you can be helpful to them in some way, even if you don't invest in them and work with them and coach them, that's really what we're trying to do as well. Now I really call a VC being not only good at pattern recognition because you have to understand what you think may work and actually most of the time, which we can get into you end up being wrong. Um , because the reality is that a lot of the companies that start up will fail and you know, the ones that do well actually ended up making up for the ones that fail and, you know, you don't get your money back. So the , the other thing too is really doing what's needed where it's being the coach be there , you know, recruiting firm , helping looking at financials and business plans. I mean, the day-to-day needs really changed and you kind of have to be the right or left hand of the entrepreneur in terms of filling the boards that they add , because they don't have the advantage of having large infrastructure that they would have. You know, let's say if they worked at a large financial institution, which is not a knock on them, but large financial institutions have the ability to support their employees when you're not foreigner , you are, you're a support network for the most part. And so a lot of what venture capital does besides the money is fill those boards as much as possible. And act as that sounding board and coach for the entrepreneurs that you work with, especially at the stage that we get involved, where it's people that have a product, you know, may have a business plan as well, but mainly a product and are either looking to generate revenue or have started to generate nominal amounts of revenue, but the businesses aren't profitable. So they need to raise funding to cover the losses from the businesses.

Speaker 2 22:08

Hmm . Uh, arena , have you had, I mean, is this kind of idea or this concept or this area of venture capital been something you've been exposed to at all or just , uh , come up in conversation? I'm just curious.

Speaker 4 22:26

Um, it's something I've seen. Definitely. Um, like, cause I keep up with, I try to keep up with news, not as often as I, as I showed considering schoolwork and all, but I've definitely heard about it, but this is my first time actually having like a one-on-one , um , experience, experience with it. I mean, considering my FinTech journey started in January, so I'm still relatively new to a lot of things.

Speaker 2 22:50

Yeah. It's a very, it's an interesting space. I mean, I mean, Luke keep me honest here, but there's kind of this broad area of finance called private equity. And this is where you have , um, typically high net and high net worth individuals , um, or family offices. Um, and they're looking to , um, but also, but beyond that also universities , um, foundations , um, um, retirement funds, et cetera, that are looking for , um, having in there , the investment managers are looking for places. They can make some investments that are, you know, in the relative portfolio, they may be construction, constructing are risky because you're investing at a typically if you're investing private equity , um, you're investing in , um, things that are in companies that are of course private. I mean, it's there in the nature. You're taking ownership, stakes , uh , in these companies. And , um, and then of private equity, there's multiple kind of tiers and classes in one of those classes, venture capital, which is the, where is the capital is being deployed to companies that are at their really earliest state. Um, so it can be, you know, some days are capitalists will invest when it's just an entrepreneur with an idea. Um , that's often more the case where the entrepreneur is a serial entrepreneur, meaning they've done, they've created a company now that sold that company you're exited and now they're creating a new company. Um, many can attract venture capital because they've got a track record. Um, but there will be , um, or there's people that, you know, if you and I started a company, we might get our parents to chip in on it and our shark tank situation. Yeah, sure.

Speaker 3 24:59

Yeah. That's a very good example. So, you know, shark tank, whether or not it's realistic, that is that most of the deals on shark tank don't actually ended up get getting funded, but you know, that's another story for another day, but think about it in terms of shark tank, except there's one person in the room usually , um, you know, myself or, you know , my partner and we're doing individual meetings, but you know, it's , it's very similar to that in terms of the numbers that they're talking about, the percentage ownership and the stages of the business, meaning they're losing money, they're growing very quickly and need outside investment to fund the losses from operations, but the businesses have also, it's a key criteria, the ability to scale rapidly in terms of growing their revenue, you know, multiple multiples of, you know, two, three X at least. I mean, we look for companies that can give us at least a 10 X return on the capital that we invest in . Don't invest unless we see the ability for the companies to do so. So shark tank is a very good example and we're trying to find companies that will either get bought by other companies or eventually go public. And, you know, one example of a company that was venture backed initially was square. And a lot of people use cash app and things like that. And now it's a publicly traded company that anyone can go and buy on their trading accounts. But initially someone as a venture capitalist stepped in and took the first risk and gave square the money to start developing their product. And the key thing to remember is they had to start from somewhere and no, probably at the time thought that they could compete with some of the larger incumbents that were processing payments, many of which were are in our backyard in Atlanta.

Speaker 4 26:52

Definitely. So on that topic, I have a quick question. So when considering our main investment, what are some of the metrics that you're tracking that kind of hint to the fact or allude to the fact that this could possibly or potentially be a successful or non-successful investment?

Speaker 3 27:09

Yeah, that's , that's a great question. And, you know, I think there's a few ways that we evaluate things the main way is looking at the cost of acquiring the customer. So it's really thinking about how much does it cost for me to advertise online or using referral partnerships to get you to use my application. And then the other question remains is how much money can I make off you as a customer over a certain point of time, assuming you'll stick with me for, let's say two to five years. It all depends by the various sub-industries. And I'm really looking for a high return on my initial investment for the customer, which is called customer acquisition costs , and then looking at the lifetime value of you as the customer and thinking about that multiple and , and whether it makes sense . And so I'm really looking at profitability on a per customer basis that can be achieved over a relatively short period of time, one to two years. And that's kind of really what I'm looking at among other things in terms of the entrepreneur, their background in terms of successful companies founded beforehand. Um, and then really it's kind of asking why, why did you start the company and why are you doing what you're doing today? I think that's a pretty overlooked question. And a lot of people, I want to make money and, you know, build a large business and, and that's great. And, you know, obviously as venture capitalists, we want to make money, but it's , it's really about looking at passionate entrepreneurs that are trying to solve problems and have a reason for

Speaker 4 28:46

Sure , their hearts in the business. Exactly.

Speaker 3 28:48

And that, you know, believe it or not I've found is not often the case. I mean, a lot of people are kind of dipping their foot in the water and entrepreneurship. You have to jump kind of face first and not look back. Can't just dip your toes in and then pull back. You really have to, if you're passionate about the idea, be willing to work without a paycheck until you collect investment for, you know, sometimes a year. And you know, also dealing with the , the constant rejection. I mean, whether it's raising money for a business or going out and acquiring customers, chances are when you start out and have no track record, you're going to get hundreds of nos before you find that one. Yes. And are you ready to do that and take that leap of faith? A lot of people are not, and that's not a knock against them, but they may not be ready to start their own company. Um, within FinTech though, I do suggest that a lot of people gain domain expertise because of what you touched on earlier in the podcast, which I liked where you said, Fintech's a very uncertain area and the possibilities are endless, but at the same time, there's a lot of regulation and wherewithal the E to have, because, you know, if you wire money to the wrong people or, you know, step on to certain issues, it can be highly consequential, you know, ends up in fines and jail time. I mean, we're dealing with money and, you know, regulated entities. And so getting domain expertise and financial services expertise in a certain area is very important because you learn about the regulatory landscape and you may even see certain gaps that are still okay when it comes to the regulatory side of things, but, you know, might be filled by more technology or a different approach to things. So my piece of advice, especially to people that are interested in FinTech when they're starting out is to do what you're doing and, and, you know, gain experience for, you know , several years, at least understanding how large financial services firms work before, you know , you jump into something, especially when it comes to FinTech.

Speaker 4 31:01

And you talked about like, I guess, like we talked about like having passionate heart into your business. So I guess my next question would be, so when you pick out these investments or when you decide to give out an investment in order to kind of safeguard your invest interest on your house , how usually how involved are you usually like with the company? Is it just kind of like a give you money and kind of let you do your own thing? Or are you like, you know, involved in the day-to-day aspects and business processes of the company?

Speaker 3 31:28

Yeah, so it depends on the investor. I'd say when the companies are later stage, you have less interaction with the founders because you know, they've developed revenues and traction and don't need you as much, but we're investing, you know, kind of what we call pre series a, but anywhere from pre-seed to seed, meaning that people have the business plan or the product, but aren't generating revenues are generating nominal Mets . So we have to work with them very closely. And, you know, I speak to most of the , the 10 founders that we have in our portfolio at least once a week. And I really tell them that they can rely on us as much as possible within reason in terms of how we can support them. And it's , it's really considered a marriage because the reality of it when we're investing is that we'll be with the founders for 10 years. And so w to make sure that it works out and that they can come to us with the bad news first. And that's very important. So trust is important. And then the ability to talk about all nuances of the business and work through them is also very important. And to do that, you need to have high level. Are there action with the founders that you are investing in?

Speaker 2 32:43

Absolutely . The , um, you know, Luke , maybe we talk for a second about like this , um, FinTech, South innovation challenge that, that you've been leading , um, recently that we're in the middle of right now and , um , kind of why we started that and how that dovetails into , um, this , um, kind of venture capital space as well.

Speaker 3 33:14

Yeah, sure. So as part of the technology associated student of George's FinTech South conference, there is something called the FinTech innovation challenge, which is a twenty-five thousand dollar prize to one of the top 10 companies that we've selected within the state of Georgia, that early stage fintechs that have raised less than one and a half million. And it's been interesting, especially because I think we have two Georgia state alumni that are in the program, Ethiopia and rise that are at least connected to the Georgia university system within a couple of years. And, you know, they've been able to make the top 10 and are in the field with entrepreneurs that have considerably more experience and, you know, years under their belts . And so I thought that was very impressive. And in selecting the companies, they made the top 10, you know, of , of many applicants. And so that was something that it stood out and going back to kinda my initial point, I think, what, what came through in their applications and, you know, having gotten to know them is that they were highly passionate about the projects that they undertook and had, you know, personal stories or personal kind of shortcomings in the financial services industry that led them to start these companies. And so that was very important that, you know, as criteria of selecting the top 10, that we found companies like this, and it's been good exposure because they, they not only get exposure to potential investors as part of the conference, but they also get exposed to major financial institutions within Atlanta and the state of Georgia that might be potential acquirers or partners. And in order to start thinking about someone acquiring your company within 10 years, you need to start building a relationship now. And so it's been a great program that has a combination of, well, not only the monetary prize of 25,000, which can go a long way and also membership to ATDC the local tech incubator, but also the mentorship and connections with investors and stakeholders is also something that we're , we're pretty proud with, how things have shaped out, especially doing it for the first time completely.

Speaker 2 35:39

And I know that when we started this challenge, which , um, you know, takes place over four weeks, we, we did it knowing or knowing we could use a more focused forum to bring , uh, early stage FinTech companies , um, to , to light and raise awareness of not, and across our ecosystem here in Georgia. But , um, but also nationally. And , um, it's, you know, it's kind of played out that way in a remarkable manner over these last , um, several years , uh, this year we've got Ken companies running all very high quality, a few at different, slightly different stages. Um, but artists is one which is a FinTech ventures portfolio company now, right. Um, enrich her , uh, Ethiopia , um, has Georgia state , uh, student engagement on it, fitness sec , uh, Griffin immediate invest guard , Lynn smart , uh , rise. Those are actually , those are Georgia tech student , former Georgia tech students, and then Viva finance. Um, I'm forgetting where the Mark Mark Rogers or Georgia tech, maybe I'm forgetting, but they're , um, anyway, Ken great companies that , uh , and we'll sort of see who , uh, who the finalists are . They'll be three finalists. That'll go on the main stage at Findex South on October the eighth , um, and , uh , fight it out for the final $25,000 cash prize, which will be cool. Um, let's, let's pivot a little bit and talk about just FinTech news that has caught our attention in the past week, in the past week , uh, Orinda , you want to kick us off what's uh what's what are you even paying attention to?

Speaker 4 37:38

Yeah. Um, so like I said, I kind of pay attention to what's going on and something that definitely caught my eye was the fact that , um, the top three FinTech companies collectively are worth more than the top six big banks. And that's, that's something that I would never see in this lifetime, but , um, square, I believe it's square visa, PayPal and MasterCard. So start at the top four rather , um, are, are all, all four are worth collectively $1.7 trillion while JP Morgan bank of America, Wells Fargo, Citi Morgan Stanley, and Goldman Sachs collectively are worth less than 900 billion in total. And that kind of took me by surprise. But then , um , as I think about it, it kind of makes sense because being a self-proclaimed gen Z , um, a lot of my friends and I, we rarely interact with our major banks are more, we're mainly interacting with these FinTech apps like square and Venmo, things of that sort.

Speaker 2 38:36

So on the second thought it kind of does make sense how FinTech is the future . Yeah, it's an Android kind of an interesting historical point , um, visa, as an example, used to be owned by those large banks. Um, those large banks started visa. They used to all own it. There was a kind of membership board that managed visa and then visa was restructured quite awhile ago. Now, I guess it was maybe 15 years ago. And then , um, and then had an IPO in the public markets. Um, I want to say about 10 years ago. And so , um, it's really, I know there's several bank leaders that regret that they retract your visa, no loan it anymore. Um, I think that was a good move and it certainly helped , um, just advance that hilarious payments and payment networks and FinTech and remarkable ways. Luke , how about you in a big news ? That's caught your eye. Yeah, so , so we've looked a lot at the ,

Speaker 3 39:43

The point of sale and point of need financing space and have made an investment in a company that does that for people that are trying to retrofit their homes and need financing to make these large ticket purchases. But this type of financing has been especially prevalent when it comes to buying everyday goods and services. So you think about, you know, buying a new piece of electronics, let's say an iPad online, and don't want to put it on your credit card. A lot of companies are , are coming up into the space or have already been in the space to allow you to split the payment for purchasing this good into multiple interest free installments. And so one company that recently raised the 600 plus million dollar round from a large private equity firm was Klarna, which is based in Sweden. And they're offering this, this point of sale financing to many consumers. And I think a lot of people have already seen their name or affirm or after pay . There's , there's a few different companies in this space that, you know , you've probably noticed the students when you're going to, to check out on whatever you're buying. I mean, it's become very prevalent. So we spend a lot of time kind of looking at the larger players in the market and, you know, be interesting to see, speaking of publicly traded fintechs , whether clarinet decides to go public and some are saying, this might be the last round of financing before they go public. And the other question will be okay, they're based in Sweden. Do they go public London stock exchange, or they come over to the New York stock exchange NASDAQ where a lot of fintechs, regardless of where they're located are choosing to go public or to throw another wildcard in there. A lot of companies are going public through something called a spec , which we don't have to get into here, but listeners should definitely take a look at because a lot of financial technology companies are choosing to do it. And that's SP AC for those of you at home,

Speaker 2 41:47

Which stands for special purpose acquisition company, which is a kind of interesting financial vehicle that's been around for awhile , but it just has been engaged in , um, multiple financings more recently that we had an Atlanta company. Um, Hey ya , who , um, did a , uh , a stat financing of over a billion dollars, I believe? Um, yeah , like a month ago. Um , also on the buy now pay later , um, Luke [inaudible] I noticed that Pfizer , uh , announced they'd gotten into a strategic relationship with quad pay , which supports those , um, you know, buy now pay in installments , um, capability that, that Pfizer is going to offer to existing and new merchant clients of a advisor . Um, and then one other thing I wanted to be sure to mention that was very relevant news here in Atlanta was the fact that deluxe , um, which is a kind of revered FinTech player. That's , um, I think, well, over 50 years old , um, has , uh, announced a major , um, investment in Atlanta. They're gonna open a FinTech innovation center , um, right at the perimeter and they're going to invest $10 million in that. And then they're planning to hire 700 700 people here in Atlanta, which is very exciting. The , um, the CEO of deluxe deluxe is headquartered in Minneapolis, Minnesota, their , their CEO is in Atlanta and , uh, Barry McCarthy who used to be a senior executive at first data , um, and has been a great friend to the FinTech Academy to this entire ecosystem. And , um , so we're just really excited to see , uh , deluxe , um , making further investments in deepening their roots into our Kentucky ecosystem here in town. So [inaudible] I'll um, in fact, I was just on the phone earlier today with Jane Elliott who runs HR for deluxe . So maybe, maybe, yeah,

Speaker 5 43:56

They'll come in handy, especially in the job search , but that's the biggest thing right now as a senior. It's like, what am I going to do next?

Speaker 2 44:05

There's lots of great opportunities for you. I know

Speaker 3 44:09

They should consider the apprenticeship like BlackRock. I thought that was an interesting way to reduce time commitment, but do internships during the semester. And, you know , I suggest that a lot of companies copy that model because I think it's interesting and it's a good way to know that the talent before they come in the doors as potential summer full-time hires.

Speaker 6 44:32

I agree . Agreed.

Speaker 2 44:35

Um, well, we are, we're done . I'm going to wrap things up there, Luke. [inaudible] thanks so much for being with us. Thanks for your engagement with the Georgia FinTech Academy. Um, it's just been great to have you , um, you, we we've mentioned a few of our Georgia FinTech Academy sponsors to locks being one of them. Um, but FIS is our investing , uh, invent kind of founding investor in our program. Intercontinental exchange is a sponsor. Uh, so thanks to all of you from those organizations that are listening and we'll look forward to having you both on against it .

Speaker 1 45:08

The Georgia FinTech Academy broadcasts are available on iTunes and Spotify to obtain additional information about the Georgia FinTech Academy. Please visit our website@georgiafintechacademy.org.