FinTech Observers Offer Predictions for 2023
While we wait for the final results of what 2022 brought to the world of FinTech, some experts are offering their predictions for what to expect in 2023. Recently, Axios asked a number of observers for their thoughts on the year ahead.
First, Kapor Capital managing partner Brian Dixon had a prediction about the future of the “buy now, pay later” (BNPL) concept, which remained popular in 2022. Dixon suggests that, rather than continuing as standalone products, credit card issuers will begin integrating such offerings into their cards. If Dixon is correct, it would shake up an industry that’s already expecting more disruption with Apple entering the fray and regulator scrutiny growing.
Speaking of scrutiny, Cowboy Ventures partner Jillian Williams brought up the topic of security. Citing the recent collapse of crypto firm FTX and the arrest of its founder Sam Bankman-Fried, Willams suggests that compliance, fraud, and risk will be “top of mind” throughout this year — including among regulators. Similarly, she expects new entrants in the security space.
Turning to what this year will bring in terms of deals, both eToro CEO Lule Demmissie and Fika VC general partner TX Zhuo offered insights. As Demmissie noted, “Dealmaking tends to pick up toward the end of bear markets, and I expect we’ll see the same situation this time around.” Meanwhile, Zhuo stated that he did not believe a slowdown in seed and Series A deals would occur. Zhou added that he expects B2B FinTech to be popular investment targets in 2023.
On a somewhat related note, Cambrian founder and general partner Rex Salisbury told Axios that he expects this year to be a good one for pre-seed and seed-stage firms looking to hire talent. He wrote, “If you’re a seed-stage company, not only are you facing less competition for job seekers, but you are also better equipped to poach from later-stage companies, where many employees are depressed because of layoffs and underwater on their equity grants.”
Finally, Inspired Capital partner and COO Mark Batsiyan as well as Lightspeed partner Justin Overdorff had thoughts about potential mergers and acquisitions in the new year. Overdorff suggests that “a few consumer neobanks” may be forced to fold in 2023 if they don’t find other exit options first. On that note, Batsiyan anticipates an “acquisition spree” from larger financial institutions that may be able to purchase startups at a good price.
With plenty of economic uncertainty abounding, these predictions could be impacted by unknown factors. Still, there are definitely some likely outcomes listed along with some interesting insights. For further prognostications, check out Axios’s full roundup.