The Exchanges

Q Well, Mark, thank you so much for coming on the show. It's an absolute pleasure to have you here. First, can you tell me a little bit about yourself and how you got into the world of venture capital?

A Yes. Hi, my name is Mark and I'm now internet in the internet field since around 20 years as an entrepreneur since around 15 years. So I founded my first own web company in 1999 when I was 19 years old. It was a web-based party platform, nothing fancy nowadays, but back then we were really one of the first, yeah, web communities in the web. And this, uh, evolved very well, and besides financing our, our, uh, studies, it was, uh, yeah, still one of the most, uh, famous platforms in the entertainment industry here in Switzerland, and we sold the company to a German publishing house, Axel Springer, a few years, years later, and afterwards I started another, uh, web company called Amiando in Munich, together with, uh, A few good friends, and the company was acquired by Xing in 2010, and after having had my second exit before I turned 30, I, yeah, was a little bit worried what to do next, and decided to go, uh, To the other side, and was very fascinated by the fact that the financial industry was not really disrupted, uh, like, uh, you saw it in other industries already a few years ago, and decided to turn into a, yeah, fintech investor.

AI assessment note: “decided to go, uh, To the other side, and... turn into a, yeah, fintech investor.”

Q And we've seen social networks recently move into the fintech space with Snapchat, Snapcash, and then the Facebook Messenger's payments through the Messenger app. Where, where do you stand on kind of social integration of mobile payments?

A Yeah, I think it's a huge trigger. Uh, and also for the end customer at the end, it's great. I mean, they're not really interested or for them, it's irrelevant, which player at the end will succeed. It's just about cheaper services, better services, more convenient services. So I think all these social networks are perfect players to enter this market and to enable, uh, their existing, uh, customer base, these new payment services. Um, I think it's quite difficult at this stage to say, um, yeah, if it's Snapcash or Facebook Messenger or some non-existent players yet, which will take the most relevant part of the pie. Um, but I think it's, it's, uh, interesting that in a such a short time, you now see so many additional new initiatives, and I think there are much more other Big players, um, offering similar services, uh, in the next few months, including, uh, a lot of the big telcos, because they're not really interested just to, uh, let the Facebooks and Snapchats, uh, taking away, uh, this interesting interaction, uh, to the end customer.

AI assessment note: “all these social networks are perfect players to enter this market”

Q Does that, does that ever make you worry that it's perhaps almost false, a bubble emerging?

A Yeah, I think that's a general issue. I mean, nothing, uh, directly related to the fintech area. I mean, I think there are general, in general, quite crazy developments, high valuations, a lot of Venture capital and other investor dollars going into the new, uh, startups and innovation. I mean, it's also an exciting time, but, um, I think at the end, uh, for example, if you look into the payment space, there's no way that, uh, uh, yeah, all of these, uh, innovative players and ideas will succeed. So out of the hundreds of, of companies just in Europe, Focusing on, on, uh, these disruptive changes. I think that at the end, just a few will succeed. So, um, I think it's a natural process like we already saw in other industries in the past that, uh, out of this hype, there will only a few successful, uh, cases which will, uh, yeah, have a sustainable, Uh, development also in the next few years.

AI assessment note: “Yeah, I think that's a general issue.”

Q And what do you see the future of fintech looking like? Do you see any trends arising in, in fintech in 2015?

A Yeah, I mean, we already saw the newest numbers regarding funding last year. I mean, the, the general, uh, investments in fintech just tripled from 2000, uh, 13 to 14. I think Uh, we will see similar growth in this year, just because also a little, a lot of big players, uh, out of the traditional financial industry are joining the game. So there will be more M&A activities, more, uh, even more, uh, fundings and investment rounds. Um, on the other hand, I think we will also see some, uh, first indication of consolidations. I mean, for example, in the lending or crowdfunding space, You have a few players in the market since quite a few years, and I think, uh, as I've already mentioned, uh, related on the payment sector, you don't need 20, uh, different crowdfunding platforms focusing on the same regional area and the same, uh, subjects. So I think we, on the one hand, we see some more Uh, consolidations. On the other hand, um, some, uh, much bigger players, uh, entering the market and an inflow with additional talent and, and money.

AI assessment note: “we will see similar growth in this year... more M&A activities”

Q What do you think has brought it closer to the millennials? Do you think it's the social element, or do you think it's the ease of use, or the, Design of the app. What would you say?

A I think it's both, but the social element, I think it's, it's something nobody really cracked so far. I mean, I hardly see anybody using Facebook or other social networks really, uh, talking about, uh, uh, trading and the stock market. I mean, the people who are already deep into this world, I mean, it's an exception, but I don't see that many millennials using Facebook as a platform. The platform to talk about the stock market. So I think it's really more about the user experience, the accessibility, uh, the, the easy to use, um, uh, the app based smartphone oriented approach. So it's just more, uh, convenient to join the game. Uh, I mean, with Robin Hood, for example, it's just a smooth and, and, uh, convenient process. Uh, you, I mean, I would say you can, uh, Go to the website and we are close to immediately start, um, trading. So no, no paperwork, uh, no old fashioned, uh, registration process. So I think, uh, the, the entry barrier just to try it out, perhaps also to realize that's not the right thing for you, but at least to be able to see how, how does the stock market work? That's something which, which is, I think the main reason why, why services like that are, uh, completely game, a complete game changer for the millennial generation.

AI assessment note: “I think it's really more about the user experience, the accessibility”

Q Does that, does that ever make you worry that it's perhaps almost false, a bubble emerging?

A Yeah, I think that's a general issue. I mean, nothing, uh, directly related to the fintech area. I mean, I think there are general, in general, quite crazy developments, high valuations, a lot of Venture capital and other investor dollars going into the new, uh, startups and innovation. I mean, it's also an exciting time, but, um, I think at the end, uh, for example, if you look into the payment space, there's no way that, uh, uh, yeah, all of these, uh, innovative players and ideas will succeed. So out of the hundreds of, of companies just in Europe, Focusing on, on, uh, these disruptive changes. I think that at the end, just a few will succeed. So, um, I think it's a natural process like we already saw in other industries in the past that, uh, out of this hype, there will only a few successful, uh, cases which will, uh, yeah, have a sustainable, Uh, development also in the next few years.

AI assessment note: “there's no way that, uh, uh, yeah, all of these, uh, innovative players and ideas will succeed.”

Q And we've seen social networks recently move into the fintech space with Snapchat, Snapcash, and then the Facebook Messenger's payments through the Messenger app. Where, where do you stand on kind of social integration of mobile payments?

A Yeah, I think it's a huge trigger. Uh, and also for the end customer at the end, it's great. I mean, they're not really interested or for them, it's irrelevant, which player at the end will succeed. It's just about cheaper services, better services, more convenient services. So I think all these social networks are perfect players to enter this market and to enable, uh, their existing, uh, customer base, these new payment services. Um, I think it's quite difficult at this stage to say, um, yeah, if it's Snapcash or Facebook Messenger or some non-existent players yet, which will take the most relevant part of the pie. Um, but I think it's, it's, uh, interesting that in a such a short time, you now see so many additional new initiatives, and I think there are much more other Big players, um, offering similar services, uh, in the next few months, including, uh, a lot of the big telcos, because they're not really interested just to, uh, let the Facebooks and Snapchats, uh, taking away, uh, this interesting interaction, uh, to the end customer.

AI assessment note: “I think all these social networks are perfect players to enter this market”

Q And what do you see the future of fintech looking like? Do you see any trends arising in, in fintech in 2015?

A Yeah, I mean, we already saw the newest numbers regarding funding last year. I mean, the, the general, uh, investments in fintech just tripled from 2000, uh, 13 to 14. I think Uh, we will see similar growth in this year, just because also a little, a lot of big players, uh, out of the traditional financial industry are joining the game. So there will be more M&A activities, more, uh, even more, uh, fundings and investment rounds. Um, on the other hand, I think we will also see some, uh, first indication of consolidations. I mean, for example, in the lending or crowdfunding space, You have a few players in the market since quite a few years, and I think, uh, as I've already mentioned, uh, related on the payment sector, you don't need 20, uh, different crowdfunding platforms focusing on the same regional area and the same, uh, subjects. So I think we, on the one hand, we see some more Uh, consolidations. On the other hand, um, some, uh, much bigger players, uh, entering the market and an inflow with additional talent and, and money.

AI assessment note: “I think we will also see some, uh, first indication of consolidations.”

Q What do you think has brought it closer to the millennials? Do you think it's the social element, or do you think it's the ease of use, or the, Design of the app. What would you say?

A I think it's both, but the social element, I think it's, it's something nobody really cracked so far. I mean, I hardly see anybody using Facebook or other social networks really, uh, talking about, uh, uh, trading and the stock market. I mean, the people who are already deep into this world, I mean, it's an exception, but I don't see that many millennials using Facebook as a platform. The platform to talk about the stock market. So I think it's really more about the user experience, the accessibility, uh, the, the easy to use, um, uh, the app based smartphone oriented approach. So it's just more, uh, convenient to join the game. Uh, I mean, with Robin Hood, for example, it's just a smooth and, and, uh, convenient process. Uh, you, I mean, I would say you can, uh, Go to the website and we are close to immediately start, um, trading. So no, no paperwork, uh, no old fashioned, uh, registration process. So I think, uh, the, the entry barrier just to try it out, perhaps also to realize that's not the right thing for you, but at least to be able to see how, how does the stock market work? That's something which, which is, I think the main reason why, why services like that are, uh, completely game, a complete game changer for the millennial generation.

AI assessment note: “I think it's really more about the user experience, the accessibility”

Q And in recent years, Switzerland seems to have trailed behind the likes of London and Scandinavia in terms of fintech development. Uh, However, this seems to be changing with, with the recent fintech hackathon held in Zurich. What do you think is bringing about this resurgence or emergence of fintech in, in Zurich?

A Yeah, that's a good observation. I mean, in general, um, yeah, in general speaking, Europe is quite ahead, quite, uh, behind, uh, uh, other fintech clusters like London, for example. So, um, they are now trying, uh, yeah, to, to get closer to the actual developments, and especially in Switzerland, I mean, Zurich, Geneva, uh, Or, uh, global hubs for, for wealth management, private banking, also asset management in the Certain areas. So I think, um, it's just a natural fit that hopefully also the next generation business models are somehow, uh, based here. And there are now, you mentioned the hackathon a few days ago in Zurich and some other interesting, uh, events take place like the startup bootcamp FinTech is coming to Zurich in May. There will be the finance two point O conference in May, the biggest Get together of the whole fintech industry here in Switzerland. So there is now a lot of, uh, yeah, a lot of movement, a lot of activity, but it will be interesting to see what's, uh, at the end, the essence and the, the result, because I mean, in the UK, you're at the stage where you're not just talking about it. You're really creating value. You're, I think having around 40,000 people working Uh, somehow connected to the fintech industry. So that's far ahead of everything what's happening in Switzerland at this stage. But I mean, it looks promising that we will accelerate and h…

AI assessment note: “Zurich, Geneva... are global hubs for wealth management... it's just a natural fit”

Q And Mark, you specialize now in the fintech sector, and you have done since the 2010. So, when it was really a very niche sector, so how have you seen fintech develop over the last five years? Um, what do you think you saw that everyone else was maybe a little delayed in catching on to?

A Yeah, that's a good question, and also, yeah, quite funny, when I look back, I mean, in 2010, uh, when I was partner at Next Generation Finance Invest, uh, we, we, uh, yeah, looked at Europe, and we had, uh, I would say, uh, around 30 companies we would, uh, have defined as finance two point oh, or fintech, how you call it. Nowadays, we said finance two point oh, but not because nobody in German speaking Europe was able, uh, To understand the term fintech. And back then, as I said, there were perhaps around 30 relevant companies. Today, I think we see more than 30 companies, new companies a week in this field. So it was really a niche sector, quite, ah, tiny, quite invisible. Nobody really talked and wrote about it. And yeah, it's interesting to see how, how this fintech space exploded. And there are now every day new players joining the game, which I think is great. But on the other hand, I think there's also some hype and buzz at this stage. So I think, uh, for us being, or for me, uh, being in this field since 2010, it's interesting to see a similar development like In the web industry in general, uh, 15 years ago, so you have a little bit the early birds, and then a lot of other ones following, and I think it's good that, uh, there are now more and more relevant players joining the game.

AI assessment note: “it's interesting to see how, how this fintech space exploded.”

Q And in recent years, Switzerland seems to have trailed behind the likes of London and Scandinavia in terms of fintech development. Uh, However, this seems to be changing with, with the recent fintech hackathon held in Zurich. What do you think is bringing about this resurgence or emergence of fintech in, in Zurich?

A Yeah, that's a good observation. I mean, in general, um, yeah, in general speaking, Europe is quite ahead, quite, uh, behind, uh, uh, other fintech clusters like London, for example. So, um, they are now trying, uh, yeah, to, to get closer to the actual developments, and especially in Switzerland, I mean, Zurich, Geneva, uh, Or, uh, global hubs for, for wealth management, private banking, also asset management in the Certain areas. So I think, um, it's just a natural fit that hopefully also the next generation business models are somehow, uh, based here. And there are now, you mentioned the hackathon a few days ago in Zurich and some other interesting, uh, events take place like the startup bootcamp FinTech is coming to Zurich in May. There will be the finance two point O conference in May, the biggest Get together of the whole fintech industry here in Switzerland. So there is now a lot of, uh, yeah, a lot of movement, a lot of activity, but it will be interesting to see what's, uh, at the end, the essence and the, the result, because I mean, in the UK, you're at the stage where you're not just talking about it. You're really creating value. You're, I think having around 40,000 people working Uh, somehow connected to the fintech industry. So that's far ahead of everything what's happening in Switzerland at this stage. But I mean, it looks promising that we will accelerate and h…

AI assessment note: “global hubs for, for wealth management, private banking, also asset management”

Q And Mark, you specialize now in the fintech sector, and you have done since the 2010. So, when it was really a very niche sector, so how have you seen fintech develop over the last five years? Um, what do you think you saw that everyone else was maybe a little delayed in catching on to?

A Yeah, that's a good question, and also, yeah, quite funny, when I look back, I mean, in 2010, uh, when I was partner at Next Generation Finance Invest, uh, we, we, uh, yeah, looked at Europe, and we had, uh, I would say, uh, around 30 companies we would, uh, have defined as finance two point oh, or fintech, how you call it. Nowadays, we said finance two point oh, but not because nobody in German speaking Europe was able, uh, To understand the term fintech. And back then, as I said, there were perhaps around 30 relevant companies. Today, I think we see more than 30 companies, new companies a week in this field. So it was really a niche sector, quite, ah, tiny, quite invisible. Nobody really talked and wrote about it. And yeah, it's interesting to see how, how this fintech space exploded. And there are now every day new players joining the game, which I think is great. But on the other hand, I think there's also some hype and buzz at this stage. So I think, uh, for us being, or for me, uh, being in this field since 2010, it's interesting to see a similar development like In the web industry in general, uh, 15 years ago, so you have a little bit the early birds, and then a lot of other ones following, and I think it's good that, uh, there are now more and more relevant players joining the game.

AI assessment note: “around 30 relevant companies. Today, I think we see more than 30 companies, new companies a week”

Q And what do you think was the reason for the explosion of growth of actual fintech startups?

A Yeah, that's, uh, also a good question. I mean, I think, uh, as everybody knows, it just took a much more Time. And I think much more than everybody expected until the digital revolution revolution really also changed the business cases and value change in the banking world, in the financial industry in general. And that's why, yeah, perhaps, uh, people were not really focusing on this area. I mean, it's the biggest industry worldwide, nearly, uh, A quarter of the whole GDP is, is made somehow related to the financial industry, but it was not really disrupted, um, in the same extent Uh, like other industries, and I think this is now definitely changing, and there's a little bit like a snowball effect, so there were a few players, and a few, a few relevant activities five years ago, four years ago, and now it's accelerating, and a lot of smart people are turning into fintech entrepreneurs, you have a lot of, uh, money inflows, so, uh, Yeah, it's a little bit like a snowball who's now, uh, getting bigger and bigger.

AI assessment note: “until the digital revolution really also changed the business cases and value change”

Q And what is the biggest difference for you comparing your activities as an entrepreneur compared to as an investor?

A Yeah, I would say, um, I don't see myself as a, as a classic investor. I would say I'm an entrepreneur now just focusing more on investing in companies, but I, I would say my whole, uh, daily structure and my activities are quite similar to the ones that Um, I, I had as a, as an entrepreneur in the past. I mean, one big advantage is that you're not that deeply involved into the operational business anymore. So you really have much more time to, uh, have a strategic approach and to, yeah, handpick also the, the teams and, uh, the people you, you work together because you're perhaps a little bit more outside. So, um, I would say as an, as an entrepreneurial investor, it's not, ah, a big difference, and it's also exciting, and every day, ah, it's interesting to see what's happening, so I couldn't imagine any role which, ah, would be better for me at this stage.

AI assessment note: “one big advantage is that you're not that deeply involved into the operational business”

Q And what do you think was the reason for the explosion of growth of actual fintech startups?

A Yeah, that's, uh, also a good question. I mean, I think, uh, as everybody knows, it just took a much more Time. And I think much more than everybody expected until the digital revolution revolution really also changed the business cases and value change in the banking world, in the financial industry in general. And that's why, yeah, perhaps, uh, people were not really focusing on this area. I mean, it's the biggest industry worldwide, nearly, uh, A quarter of the whole GDP is, is made somehow related to the financial industry, but it was not really disrupted, um, in the same extent Uh, like other industries, and I think this is now definitely changing, and there's a little bit like a snowball effect, so there were a few players, and a few, a few relevant activities five years ago, four years ago, and now it's accelerating, and a lot of smart people are turning into fintech entrepreneurs, you have a lot of, uh, money inflows, so, uh, Yeah, it's a little bit like a snowball who's now, uh, getting bigger and bigger.

AI assessment note: “now it's accelerating, and a lot of smart people are turning into fintech entrepreneurs”

Q And are there any particular areas within the FinTech space that you find most interesting, and why?

A Yeah, I mean, there are two perspectives. I think on the one hand, it's interesting to see how now, how, how the, the end consumer is, is, Yeah, I mean, uh, enabled, uh, to get access to services which were not accessible, uh, in the past or just accessible for the more wealthy target groups or for those institutional investors. So just the fact that, uh, the whole financial industry is getting democratized by these new players. And on the other hand, as a, as an investor, I mean, uh, I think, uh, it's all about making money. So I think, uh, just by offering, uh, the same service like a traditional bank is doing, uh, uh, let's say for free and much more efficient. It's great for the customer, but perhaps difficult to Uh, build a big business out of it. So I think, uh, for me, uh, I'm, I'm mostly interested in, in fields where you also get, um, relevant business models and, you know, are able to build, um, a money-based, uh, revenue model and not just, uh, yeah, doing a more efficient, more, uh, transparent and cheaper service to the end customer.

AI assessment note: “the whole financial industry is getting democratized by these new players”

Q And are there any particular areas within the FinTech space that you find most interesting, and why?

A Yeah, I mean, there are two perspectives. I think on the one hand, it's interesting to see how now, how, how the, the end consumer is, is, Yeah, I mean, uh, enabled, uh, to get access to services which were not accessible, uh, in the past or just accessible for the more wealthy target groups or for those institutional investors. So just the fact that, uh, the whole financial industry is getting democratized by these new players. And on the other hand, as a, as an investor, I mean, uh, I think, uh, it's all about making money. So I think, uh, just by offering, uh, the same service like a traditional bank is doing, uh, uh, let's say for free and much more efficient. It's great for the customer, but perhaps difficult to Uh, build a big business out of it. So I think, uh, for me, uh, I'm, I'm mostly interested in, in fields where you also get, um, relevant business models and, you know, are able to build, um, a money-based, uh, revenue model and not just, uh, yeah, doing a more efficient, more, uh, transparent and cheaper service to the end customer.

AI assessment note: “mostly interested in, in fields where you also get, um, relevant business models”

Q And moving to specifics now, Orange Growth Capital is an investor in Bucks, the social gamified trading platform. Is this the way you believe stock market trading is moving? And how do you respond to critics that suggest it allows the mass market who don't necessarily have significant investor knowledge the ability to gamble?

A Yeah, I mean, at the end, I mean, that's a good, uh, input, but, um, I think that at the end, it's about the transparency. So as long as Everybody knows, uh, what's, uh, what are the terms of, of, of an offering and how, how the setup is, is organized. I think, um, it's a added value for the end customer being able to join the stock market, uh, normally also at a much lower, uh, level than, uh, it would be possible normally. I mean, it's a, yeah, it's a different game. You have, uh, You mentioned the player box. You have quite a few other ones. I own the Wikifolio, uh, Robin Hood now, uh, being, uh, extremely successful, uh, regarding, uh, coverage in a global press. It will be interesting to see how the whole business case will evolve. So I think it's, uh, it's great to have, uh, lower entry barriers and, uh, to see, uh, or to be part of, uh, of, uh, Of a business, which was perhaps in the past, not really, uh, close to the millennials or to the target group. So, I mean, as soon as, or as long as it, as is it, uh, clear indicated that, uh, you can, uh, also lose money, um, uh, being, uh, a trader and having, uh, efficient and transparent pricing, uh, scheme. I think that's, that's, uh, added value for the end customer.

AI assessment note: “as long as it is clear indicated that you can also lose money”