Emerging Themes in Fintech with Dan Kimerling

TL;DR

Dan Kimerling identifies aging populations, open banking, mobile wallets, and vertical banks as major emerging fintech themes. He says Destined Capital focuses on leading seed rounds for U.S. fintech companies, while his investments also include True Link Financial, Treasury Prime, and Endeavor. His career across TechCrunch, Giftway, Standard Treasury, and Silicon Valley Bank explains how he developed these views. Read on for the specific opportunities he sees.

Transcript

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Key Insights

• 😮 The rise of mobile wallets has transformed the way consumers manage their finances, offering convenience and accessibility.
• ❓ Fintech companies are leveraging partnerships and platforms to acquire customers and create network effects.
• 😮 Traditional banks are facing challenges in adapting to changing consumer preferences and the rise of fintech.
• ✋ The market is showing a preference for fintech companies with higher return on equity, indicating a shift in investor sentiment.

Questions & Answers

Q: What emerging fintech themes is Dan Kimerling tracking?

Kimerling says he is tracking about six major themes, including aging populations, open banking, mobile wallets, and vertical banks. He expects these areas to remain central to his work for the foreseeable future.

Q: What is Destined Capital's focus in fintech investing?

Destined Capital focuses on early-stage fintech venture capital in the United States. Kimerling says its defining approach is leading seed rounds rather than merely joining follow-on financings.

Q: Why does Dan Kimerling see an opportunity in financial services for aging populations?

He says populations in the United States, Northern Europe, and Japan are aging rapidly. He expects that demographic change to place pressure on financial services over the next 30 years and cites True Link Financial, which serves elderly people and their caregivers.

Q: What is Dan Kimerling's background in open banking?

While working at Giftway, Kimerling concluded in the summer of 2012 that banks would need open APIs. He later started Standard Treasury to help banks open public APIs and remains involved with open-banking advocates in the United States and United Kingdom.

Q: What happened to Standard Treasury?

Standard Treasury was backed by Y Combinator, Index Ventures, and other investors. Kimerling says the company was successfully sold to Silicon Valley Bank.

Q: How does Dan Kimerling approach mobile-wallet investing?

Kimerling describes mobile-wallet business models as one of his core fintech themes. He says he invests very aggressively in mobile-wallet businesses outside the United States.

Q: What are vertical banks, and which examples does Dan Kimerling mention?

Kimerling describes vertical banks as banks or banking business models aimed at niche customer segments. His examples include True Link for elderly customers and Endeavor for dentists, optometrists, veterinarians, and other medical-practice owners.

Q: Why did Dan Kimerling start an early-stage fintech fund?

During his time at Silicon Valley Bank, he saw strong seed funds and strong fintech venture-capital funds but little at their intersection. He also observed that available capital often followed financings rather than leading rounds, which shaped Destined Capital's seed-stage strategy.

Summary & Key Takeaways

• Dan Kimberling, founder of Destined Capital and expert in fintech, discusses the evolution of the industry and the rise of mobile wallets.

• The adoption of mobile wallet technology is growing rapidly, particularly in countries where traditional banking infrastructure is limited.

• Companies like Square Cash, Venmo, and Chipper Cash are leading the way in mobile wallet innovation and creating a more accessible financial ecosystem.