Amjad Ahmad, Managing Partner, MENA & Emerging Markets Advisor at 500 Global, has invested in emerging markets for over two decades, building two growth capital firms and providing over $1 billion in venture and growth financing to companies. Amjad sat down with the 500 Global Education team to discuss the foundations of fintech and the next wave of potential winners in the space.
Below is a short summary of Amjad’s recent fintech webinar. You can also watch the full discussion on YouTube here.
Fintech is a massive and powerful sector. In 2021, there was almost $5 trillion in gross profit in the industry, predicted to grow to $9 billion over the next 10 years. It’s an industry that touches everyone and every country.
In emerging markets, we don’t see the construct of financial services the way we do in developed markets. The leapfrogging capability will be greater in emerging markets – there is so much room for disruption in regions like Asia, MENA, and Africa.
Several key factors will define the next wave of successful fintech startups – especially in emerging markets.
The first layer is sustainable unit economics. Few investors today will invest in models where the unit economics look challenging, especially in financial services where you need huge volumes for the investment to make sense. Startups that are coming with sustainable unit economics will do very well in this environment.
As mentioned earlier, rising regulation will be a defining factor on companies that succeed. Regulations do not have to represent a challenge- they can represent an opportunity. Startups who know the industry really well will be able to navigate those regulations and create moats.
Business model convergence will be a defining factor as fintech companies venture into other industries and vice versa. This may lead to interesting combinations, such as e-commerce players incorporating fintech services or traditional fintech expanding into new sectors.
B2B is ramping up and advancement in technologies like AI will accelerate that growth rapidly. B2B is more complex, but we’ll see a lot of niche segments that people will be able to capitalize on. Industries like insurance and baking are going to be largely disrupted by these massive advancements.
The fintech sector holds so much opportunity for investors. It will be exciting to see the disruptions, innovations and successful companies that emerge over the next decade.
Want to catch the full fintech discussion with Amjad? Listen to the live webinar on YouTube.
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