Riding Unicorns: Venture Capital | Entrepreneurship | Technology

S2E5 - Matthew Ford, Partner @ Mouro Capital

June 30, 2021 Riding Unicorns Season 2 Episode 5
Riding Unicorns: Venture Capital | Entrepreneurship | Technology
S2E5 - Matthew Ford, Partner @ Mouro Capital
Show Notes Transcript

Matthew Ford is a Partner at Global FinTech Investment Firm, Mouro Capital. Matthew and his team manage over $400M assets that targets early to growth fintech investment opportunities across Europe, North America and Latin America. Prior to Mouro Capital Matthew worked as the Chief Product Officer at Tandem Bank. 

Matthew joined James and Hector to discuss his transition from working in operations to becoming a VC, the empathy he has for prospective founders and the trends that Matthew expects to see in FinTech in the near future. 

Make sure to like and subscribe to the Riding Unicorns podcast to never miss an episode. Also don't forget to give Riding Unicorns a follow on Twitter and LinkedIn to keep on top of the latest developments.

[00:00:00] James: Hello and welcome to episode five of writing unicorns, the podcast about growth startups. Today. We're delighted to have Matt Ford from Mouro Capital on. So Hector, what are you excited about asking that about.

[00:00:27] Hector: Probably too many things and we won't have time for them, but one thing in particular is, I love talking to investors.

[00:00:33] Who've been entrepreneurs previously. And I think it gives them a unique perspective on investment targets and way at episode one are mostly ex operators. And so we have really strong conviction around that being a great approach to investing and an approach to building a fund.

[00:00:49] And I'm sure Matt is going to have some, some really interesting thoughts around.

[00:00:53] James: Yeah, absolutely. Matt founded parity, which then got rolled into tandem and he ended up being [00:01:00] chief product officer there. So be interesting to see how that experience resonates with his time now as an investor at Mauro Capital.

[00:01:07] So without further ado, let's bring in mats.

[00:01:11] Welcome to riding unicorns, Matt, thanks for joining us. Can you tell us a bit about your background today and how you got into VC?

[00:01:22] Matthew Ford: Sure. Well, thanks for having me both of you.

[00:01:24] Yeah, I mean, th there never is one traditional way into VC, so I don't know whether my journey is atypical or not, but, I've been in VC about a year and a half.

[00:01:32] I joined Moro last January. And actually prior to that, I was on the operator side. So immediately beforehand, I was chief product officer at tandem bank. So I ran all the product and marketing teams there. It was a really interesting couple of years, so. So in that business in 2018, we were just launching to market so super exciting time to kind of be really growing that business.

[00:01:53] It was very different from what I'd done before we were in the hundreds of people, which, which is, uh, you know, a really big difference from [00:02:00] kind of smaller stage startups that I'd done before that. And prior to tandem, I actually founded a company called parity back in 2014, which we were really early mover in open banking.

[00:02:08] So. This was pre PSD to pre well pre open banking, really. And we had a hypothesis about underwriting customers, much more, fairly based on bank, transactional data, rather than a traditional credit school. So we actually, we were the fourth ever credit bureau in the UK, which something to be proud of.

[00:02:25] And we actually partnered with lenders to offer Farrah lower cost credits customers. So, so yes. So launch that business back in 2014, like really early days of FinTech, I suppose, in the UK. Scaled it pretty well. And we would VC backed, and ended up selling that business to tandem. So had some kind of interesting experiences on, on the entrepreneur side, about like the pros and cons and stresses of raising money, uh, the full life cycle, of a business.

[00:02:50] Trying to create one thing, you know, think of everything from the branding through to, the original pitch deck through to try and get the exit. So moved into VC to try and bring some of that operator experience. [00:03:00] Because yeah, when you, when you got some of the scars, you see, you definitely can empathize, I think a little bit better with that with entrepreneurs, but yeah, and I suppose briefly before that, I got my first taste of.

[00:03:11] Startup scene at a company called entrees, which was, I don't know if you know, mint.com, but it was very similar to mint.com. The UK version that we also sold to MoneySuperMarket. So it's been quite a bit of time on the entrepreneur side and, and yeah. Now, uh, now on the VC side, hopefully bringing a lot of those learnings across.

[00:03:28] James: So how important do you think it is to have that kind of firsthand operator experience in your current role?

[00:03:34] Matthew Ford: Yeah. Well, it's a really good question. Cause I think. A fund that's just purely operators misses something. And I think a fund that mist that has just purely X investment banking or lifetime VC people is also missing something as well.

[00:03:47] So I think you need a mix of both. I'm not sure whether I'd fully appreciated that if I'm completely honest, until I moved on to the VC side of, you know, like you, you definitely get a much better perspective. Having been an entrepreneur of. I suppose the [00:04:00] daily grind and challenges of things like hiring and culture and, and fundraising from the other side of it.

[00:04:07] So I think it brings quite a lot of empathy and a lot of the entrepreneurs, when you do chat to them, they like the fact that you've been there. They liked the fact that like, they kind of breathed the cyber leaf. Cause it, you know what, it's what it's like on their side of the table. but then if you've only ever been an operator, there's, there's almost like a pattern matching that you sometimes miss as well.

[00:04:26] Cause I mean, thinking back I, I was in 10 them, I was at tandem, found it parents and entrees that's three starts up experiences, all really within consumer FinTech where. If you've spent 10, 15 years in VC, you've seen literally tens of thousands of businesses. And you can start to almost pattern spot between particular business models that have worked or market entry strategies that have worked or haven't worked.

[00:04:49] So I think having that blend within a fund is, is super important. And, I'm kind of learning the pattern spotting bit as I go, and bringing the entrepreneurial bit, from the start. I was going to ask

[00:04:59] Hector: about that [00:05:00] because it seems like the, Skillset you get from being an entrepreneur or an operator is harder to learn as a VC compared to the pattern spotting, skill set. So do you think. Operators can become VCs and pick up those skills.

[00:05:15] Or do you think you fundamentally have a different skillset? If you come from investment banking or consulting or something like that?

[00:05:22] Matthew Ford: No I think it depends on the personality. So I mean, the bit that I skipped at the beginning, I suppose, as I started my career in strategy consulting. So, you know, I wasn't a developer, I wasn't a product manager by trade.

[00:05:33] Although I ended up in product as a strategy consultant. And I think it's always an accumulation of suppose of all your life experiences, your personal, like your professional experiences, because VC is a way of job, you know, it is pulling on all of those different components to judge, whether it's a great team and you know, how do you assess what a great team is, whether it's a great market, how do you assess a great market?

[00:05:53] So, I don't think an entrepreneur can be a good investor and I don't think a good investor can't be a good entrepreneur. I really do think it's an [00:06:00] individual's thing. But, but as I say, I think as a fund, you need, you need a collection of all different perspectives. And the last thing you want is just homogenous, singular thinking you need any people who think completely different ways as well, just to, just to challenge things.

[00:06:12] But, but yeah, I mean, I think it's interesting because. There's increasing crossover. I mean, I know a number of VCs now that have gone and sets up businesses and they make great entrepreneurs because, you've seen the pitfalls, not personally as an entrepreneur, but, uh, you've seen enough pitches and you've seen enough successes.

[00:06:30] We'll fail failures of businesses to skip some of that. And then I suppose on the other side, thinking about when I found it parity, I was so naive. I mean, I was. 20, what was I 20 something late twenties. And I think that naivety was an amazing quality to some extent, because you were just like jumping in with two feet.

[00:06:47] You'd no idea. The 50 reasons why that business was definitely going to struggle in its first couple of years. And like, you probably want to start at that business. Had you known all of that? Um, so I think, you know, it's a mixture [00:07:00] of both of those things. So I don't think it's as black and white as one is harder than the other, but I really liked those people that have spent a bit of time on both sides.

[00:07:07] Cause that. It definitely brings a bit of a variety in the perspectives. Then

[00:07:11] Hector: I agree that the blind faith part can be really valuable. Um, so on the, sort of stock picking side, do you think the, operator experience improved, just skillset on the, like working out what a good product is, or do you think it's actually the empathy that you've got from having been a founder yourself? Um, that means you're better at spotting. People great founders, people who will stop at nothing to build a great business.

[00:07:37] Matthew Ford: What's a good question.

[00:07:37] I mean, I'll be judged on that in seven years time. Well, I always, I always send me joke with people that the weirdest thing from moving from like a product world into a VC world is that a product feedback loop is a week or two weeks. Um, you know, you, you build a feature, ship, a feature, you get some feedback it's like a seven year.

[00:07:58] And so I could be a terrible, [00:08:00] see, so, I mean, this is going to it, this could age terribly, so who knows. Um, but, um, but I think empathy is important. I mean that there is. Often entrepreneurs, investors have come from slightly different worlds and, and being able to speak a similar language and being able to look at a product in a slightly different way and have technical technical conversations about how a platforms bill, um, you know, how they, how they, how they run the product team and culture to be able to have kind of like a peer level conversation, I think has been incredibly helpful to, to build trust with entrepreneurs as much as anything, because.

[00:08:34] You know, that there's this preconceived notion that, you know, the entrepreneur pitches all the VCs and then the VC yet says yes or no. Like at the end of the day, it's, it's almost the inverse relationship. To some extent, you know, it's about us finding great teams that we really want to work with. And then the entrepreneur picking the VC.

[00:08:51] I had to some extent, you know, it's a much more of kind of a mutual matching than, than, than there's not in the industry, but think, and I think having some of that payer relationships definitely helpful [00:09:00] from that point, because if you're an entrepreneur you want. People around you as advisors, investors, board members, who you can get on with, you know, enjoyed spending time with you, you can kind of wrestle with and, uh, you know, share thoughts on and kind of work through the difficult things together.

[00:09:15] So I think the entrepreneur skill set definitely helps on that front. definitely I think on the, um, does it make you a better stock picker? Time will tell. I, I don't know. I think to some extent, from a product perspective, it's definitely, definitely advantageous. Um, you know, the first it surprises.

[00:09:33] Some entrepreneurs when I speak to them that I already downloaded the app, how to play with it and, I don't remember as an entrepreneur, the number of investors that just never even downloaded your app.

[00:09:42] Uh, you know, with judging the business on the pitch deck, I always find that really surprising. So, so I think sometimes that really helps because, I've found a few businesses where maybe the way they pitch the business wasn't spectacular, but you picked up the product and you think, wow, this is awesome.

[00:09:56] You know, like they've got something secret and different, better , than other [00:10:00] people. And then all of a sudden, you've got an insight that perhaps, uh, Less product orientated investor would have, or, you know, they've discovered that much later in the processes of diligence item rather than as a, as a criteria.

[00:10:10] Hector: I think it's becoming more accepted to have, VCs with no. Real investing experience as you know, partners in these funds. but I wonder if had you done anything to kind of build a track record? Had you done any angel investing or like a fantasy portfolio, which is something that I'm doing at the moment?

[00:10:27] So that hopefully it's a little bit quicker, to the point where I have some sort of a track record or was it straight in, straight into the deep end?

[00:10:35] Matthew Ford: No, I I'd done bits like tiny bits and pieces. I've definitely wouldn't want to, I I'm behind it. But, so I started my career in consulting, but then had, uh, so I mentioned on trees, which was that first started that I was involved in on trees was a, an interesting business because it was actually spun out of, um, uh, of, of a venture studio.

[00:10:53] So I joined. DMGT, which is a big media group, um, and sat in the strategy team. So that was my first job [00:11:00] outside of consulting and we built businesses. So we advise the group on strategy, but we also built businesses and on trains, it was one of those. And we also did the M and a, uh, and startup investing, when that happened out to that group as well.

[00:11:12] So I had already taken like a tentative step into investing. No, Raising a fund managing LPs, uh, you know, like not true, like that much easiest stuff, which was, you know, just the, the scouting side of doing the deal side. So had a huge amount of interest in that, but a bit of.

[00:11:31] A bit of experience at that point. So that was, that was prior to parity. And then I'd done bits and pieces. You know, I didn't have millions of pounds to be throwing around into angel investing at the time, but, you know, I put the odd thousand here or there into businesses that friends had started or their little bits and pieces through equity, crowdfunding, and more just to try and build a bit of knowledge and learning.

[00:11:52] And you know, this was 10 or nine, 10 years ago. But you know, during, during the time I was running parents, so. Always try to stay close to the market, always [00:12:00] just try to learn what a good investment was. Um, and I think that definitely the definitely helped. But there's nothing like, just being thrown into the backpack and like that first two or three months of being an investor having come from the other side, like I learned so much straight away, you know, it was, it was, it was very different to doing it quite lightweight over the previous previous number of years.

[00:12:21] James: Yeah. And as it VCs, we will have criteria of what our funds cannot invest into. Is there anything that's not part of your criteria that you always like to look for? And I'd love to hear if Hector's has got anything that he looks for as well. That isn't part of episode one's criteria.

[00:12:39] Matthew Ford: Oh, that's a really good question.

[00:12:40] It's a really good question. I mean, It completely depends on the stage of business. So I haven't really talked about Mauro very much, but more, uh, more, uh, capital where a FinTech specialist fund, uh, but we're quite stage agnostic. So we've done everything from seeds, you know, some of the first money into the business, all the way to really late stage stuff.

[00:12:58] And I think if you're a [00:13:00] very stage specific fund, uh, particularly at the earliest stages, I think it can be a little bit more constrained around, these are the 3, 5, 6 things that we always look for, which is, you know, maybe second time founders, some funds double down on the hassle, you know, have come from particular backgrounds or solved a problem before, and then now spinning it out and doing it themselves.

[00:13:18] Like whatever it may be. But I think. Sometimes you can kind of template that a lit a little bit more where a more, I mean, we're, we're looking at businesses across all different stages, so it isn't like 50% of it is team and 40% of it is market size and or anything like that. It's, it's a lot, it's a lot more organic and it depends on the stage, but I mean, being a lay man's of being a product person, I mean, I naturally gravitate towards products that I love.

[00:13:43] And I don't always mean consumer products. I mean, we invested into DriveWealth last year, for instance. Dry mouth is phenomenal business. It's a brokerage as a service business, which basically powers the stock trading features of Revolut, a free trade of a bunch of loads of businesses all around [00:14:00] the world.

[00:14:00] It's an amazing product. It's not a consumer product. It's an amazing API driven product. So, you know, I, I personally get extremely excited when I see something that. I could tell that a developer would love to jump on that and, you know, the API docs are incredible, or if it is a consumer prop that, uh, that just consume a feedback's been incredible.

[00:14:18] So I kinda, I definitely get drawn into the product side a lot earlier than, than many others. Um, but yeah, I it's, it's, it's probably, you just got to look at everything that, I mean, the, the, you know, the classic things that everybody looks at is team market size, all of those types of things. I think a thing, which, I, probably underappreciated into until moving into VC was, was com kinda like the capital raising profile of a business as well.

[00:14:43] So. It's very easy to say, VCs just want very high margin, SAS, like businesses because they're very capital efficient and become, can become massive, huge billion dollar businesses. But in FinTech, it's so much more complex than that because it may involve [00:15:00] regulatory capital. It may involve, a bunch of other like debt funding structures and things like that.

[00:15:05] And I think one of the things that we can offer as a specialist fund is, is. Deepen knowledge around that type of side of the business, which is not, oh, you raised $10 million and you're fine. And you know, you just raise equity that actually, sometimes it involves a really complex financing structure to fund the loan portfolio that you're putting together or whatever it may be.

[00:15:23] So, so I think I also spend quite a bit of time thinking through. Businesses that aren't just going to bend through a load of expensive equity that can, structure the loan portfolios and clever ways using forward flow, whatever it may be. So I spend quite a bit of time thinking about that as well.

[00:15:37] Given, given we do back a lot of lenders and, and finance finance platforms.

[00:15:41] Hector: Yeah. And I think that episode one, we're investing in an earlier stage than the new guys. But it's rare to find like the full package pre-seed or seed, where they've got everything sorted down to a T.

[00:15:53] So it's usually like, you know, what we get excited about is a spike in certain areas. Like, is this person absolutely [00:16:00] incredible? Is that product absolutely incredible? Are there, is there some anecdotal evidence from customers that like. Certain groups of people absolutely love this. Um, so yeah, I mean, we're just, we're just fishing for signals that like this could go crazy.

[00:16:15] But yeah, it's very rare to have the full picture from kind of the seed stage.

[00:16:19] Matthew Ford: Definitely agree with you. You're finding something that they are just so much better than everybody else. And it could be, it could be anything across that suite, as you say. When you find a business that has just got something incredibly special, it's so obvious as well.

[00:16:33] It isn't just a play, but that's ticked all the boxes of particular, you know, pitch deck that makes sense. You can see that they've got something special to that. So the rest of the, yeah.

[00:16:40] Hector: And I think when, when you see those companies, it's obvious. And I think it's easy, not to be honest with oneself as an investor.

[00:16:47] And perhaps if it's been a while, since you've done an investment or something like that, you get a bit, you get excited at things that shouldn't necessarily be exciting enough to invest, in that company. But I think like when you're honest with yourself, [00:17:00] You really know when you see something that's super exciting and you just have to invest it.

[00:17:05] And it probably probably should only be those times where you actually invest as a VC. Yeah. Yeah. I agree

[00:17:11] James: with that. And so there's chance to nerd out a little bit on FinTech. I mean, we've seen lots of. Disruption or whatever you want to call it around sort of banking in particular, but what are the next big trends within FinTech and what are you guys particularly excited about right now?

[00:17:29] Matthew Ford: Yeah, it's a good question. So, I mean, we we're, we're quite thesis orientated as a fund, so we do actually spend quite a lot of time researching, uh, not before we invest in the space, because I think there's an inherent arrogance there too. I've seen that you can predict what the future looks like, but, but we, we definitely really try and pick apart, you know, what, what those big trends are.

[00:17:48] And I think. Two or three areas that really stand out. So we're not the only ones talking about it, obviously, but embedded FinTech embedded finances is an absolute massive one. So if wave one of [00:18:00] finer services, disruption was banks are shit and slow and old and archaic. And the technology, you know, they'll never be able to innovate.

[00:18:07] So let's go and build a brand new one. And if that was phase one and plenty of great huge businesses have been built, disrupting the incumbents that way. Phase two for me is kind of two-pronged one, um, actually kind of democratize the technology. That's enabling that. So we're seeing lots of banking as a service providers payments as a service.

[00:18:27] I mentioned drive already, which is brokerage as a service to really taking. The new building, new technology stacks that can enable anybody else to start to build on top of them, rather than having to build fully vertically integrated challenges. So that's kind of big macro trend number one. And then the second of that second, one of those is using those types of infrastructure, then embedding that into nonfinancial brands.

[00:18:50] So there's increasingly starting to see. Uh, non-financial services, businesses stopped to have financial services in that roadmap. Um, so we're looking [00:19:00] increasingly at things like logistics and mobility and sustainability, and a lot of things that don't necessarily seem like FinTech, but actually, you know, they might be starting out with.

[00:19:10] A particular product that has nothing to do with financial services at all. But over time, they'll start to monetize from payments from lending and, and using a lot of these, um, infrastructures of service platforms. So, so I think that's a, that's a really, really huge one. Um, and it is nascent. I mean, it's very hyped at the moment, uh, but it is still very nice and, you know, it's a big five, 10 year journey because even.

[00:19:32] You know, even though Shopify and, you know, there's the, there's the classic ones that everybody points to. It's still like the same five to 10 big examples that everybody points to. It's not that every single company is the world's monetizing from financial services revenue yet, but I think the investor scene is woken up to that opportunity.

[00:19:48] And I think there's some really great and interesting businesses being built out at the moment.

[00:19:52] Hector: Just to dig into that one. So one company that. Springs to mind that I found really interesting they build an API. [00:20:00] First loan tool for marketplace platforms.

[00:20:03] So if you're, Etsy or one of the many other similar companies, you basically allow your merchant sellers to plug in their data and then you would have built it as it. So you would have built in the loan product, using their API to your platform. Make it really easy. If these merchants to get loans, to fund growth.

[00:20:22] Are there any other like specific companies that you think are, or that's one that I like? Um, what, what are you in particular sort of interested in that embedded finance space? That's in cool use cases that you've seen.

[00:20:34] Matthew Ford: Yeah, the, I mean, the dust as a service space is a really, really interesting one. I think you're completely right that, the capabilities around credit, are so complex and you need so much track record of credit cycles and all of that type of stuff.

[00:20:47] Etsy is example of Etsy. It's the perfect example. They don't have that capability in house today and to go and build that capability would be huge. So using a debt as a service platform makes complete sense. And we've looked at that space a lot, [00:21:00] actually. Um, um, very, very bullish on, it's finding the right provider of that cause, the profile credit risk on Etsy versus something else is completely different.

[00:21:09] So I think we are quite early in. Finding out what that winning infrastructure platform will look like. But, very, very bullish on that space. Um, from embedded payments. I mean, there's, there's a ton of interesting businesses at that. I mean, we've, we've backed tree last, a tree layer in our portfolio who are doing a lot of.

[00:21:26] And I've opened banking payments, but essentially enabling, people to bike, uh, bypass Cod rails and start to embed, open banking rails, into their app. So that's another incredibly interesting example, but was also thinking on the insurance side as well. I mean, insurance is a really interesting category because you know, the, if you think about it, The idea of going and buying a product and then financing the product and then ensuring the product.

[00:21:51] It just doesn't make sense. I mean, we were talking just before we were recording this about, about bikes and, the pike actually, both me and you've got, like that kind of [00:22:00] doing a insurance product without offering insurance anyway. So, you're not going and buying an insurance product in case I lose my bike.

[00:22:07] You can pay the company an extra. I think it's like 200 pounds of whatever it is. And if you lose your bike, they'll go and get it. So there's lots of these really interesting ways in which you can blend financial products and services. And, , insurances is one that we're definitely, definitely looking at this huge opportunities.

[00:22:21] James: Yeah. There's a company in Belgium called cover with a Q that is doing. That I think for Revolut and delivery. So the Revolut example, it's using open banking data, so you buy some pet food and it says, do you want pet insurance? And, uh, and then for delivery that they're offering by the model insurance, within the riders apps.

[00:22:40] And yeah, a lot of these big platforms aren't going to go out and build their own underwriting, API APIs and things like that. So if you can be the API of insurance into. Different services and either be specialist or generalists, there's just like huge opportunity. I think that's that's one thing I'm excited about is like [00:23:00] the UK is dominant in FinTech.

[00:23:02] So like who's now in the UK, who's selling to those fintechs because they've got an unfair geographical advantage and accessing those big businesses at a senior level. So yeah, I definitely agree with that, that

[00:23:13] Hector: wanting to make this just, me talking to you, James. The, I think that that insurance piece is really interesting because, so it feels like a kind of step one is the embedded insurance.

[00:23:25] Like, you know, maybe it's allowing the bike manufacturers like. If they're selling direct to consumer, maybe you can pin on a insurance policy when you buy the bike. What I'm kind of interested to see, and I don't know whether Matt you've seen anyone doing this is like people actually rebuilding the insurance model.

[00:23:43] So I haven't gone for the insurance for my bike because I just don't really like insurance because I know that I'm paying basically a margin to people sitting in an office. Um, what I love the idea of. It's paid to parent insurance and like, so [00:24:00] lacquer is a company that I backed on. Um, crown keep, I think it was or Cedars.

[00:24:04] But there's a bunch of companies now doing peer to peer insurance where you invite your friends who you think a careful to your insurance group. So that hopefully you can save money on your insurance policies. Basically. Have you seen anyone doing that in a really cool way?

[00:24:17] Or what, what do you think might happen in that kind of insurance space, but down a couple of layers?

[00:24:23] Matthew Ford: Yeah, no, it's Pittsburgh. Our insurance is incredibly interesting. So I actually use lacquer as well. again, a very interesting model for if people aren't aware of the way it works, rather than. Paying paying your premium upfront.

[00:24:35] And then if, a loss happens, then then the insurance company pays out. Instead, basically each month you get a bill, a full total losses for the group that you're part of, and then you collectively pay up for, for what the losses are. So it really inverts the model and. It's worked in some sectors and it hasn't worked in others.

[00:24:53] I mean, I remember there was one in, I can't remember the name of it now, but quite a few years ago in motor insurance, that just didn't work. It failed [00:25:00] from a Headspace perspective and interestingly Pat's insurance, so bought by many, um, you know, they, they, I believe started from the peer to peer perspective and, and kind of then shifted over time.

[00:25:11] So I think it, it depends on the model and it depends on whether you can get enough within your risks. Pull, because now the problem with a lot of these as if now the beauty of a big insurance company is. That taking that, years of experience of building out underwriting, then they've taken a risk and we'll pay out.

[00:25:26] But, um, you know, if you're, if you've got a hundred people in your insurance pool, it only takes one or two for a massive wipe-out and all of a sudden the spikes can be, can be huge. So you need a massive pool of people before actually you can kind of, uh, Get rid of some of that volatility and some of that risk at the whole pool house.

[00:25:44] But yeah, I completely agree. I mean, I'm most excited about not just insurance, but financial services generally, which is like, how do you take a financial product? Not just recreate a digital version of it, but yeah. All the way back to what is like the job that it's trying to solve. And can you completely rethink the way [00:26:00] that that's done and, you know, insurance, I use the bike example.

[00:26:04] I think it's a perfect example because what we want is not. To pay for cover on some, on like an insurance cover for something we want our bike to get fixed through our car to get fixed, or we want things to be replaced if they get lost. Those are the jobs that we won't solve as a, as a consumer and, you know, not ultimately want to financial product solving, but if you think about it that way you can solve those problems in many other different ways.

[00:26:27] And it's the same with credit cards. I spent a couple of years at tandem. Tandem had a couple of credit cards in the market at the time and everybody's now talking about, oh, the credit cards dad's, it's all about buy now pay later. Clown is taking over the world, et cetera, et cetera.

[00:26:42] Um, and I think that's often because people are thinking about the credit card as a financial product, you know, it's like, it's a piece of plastic that gives me rewards and it gives me, you know, it allows me to not pay back in full each month if I can't afford it and to smooth out some of my spending.

[00:26:58] But actually if you kind of. Go [00:27:00] all the way back to what a credit call is really trying to solve. Like it's not trying to solve cash back, you know, that's like a weird thing. That's kind of come out of the market over time. Like it's trying to solve really simple things like, um, I get paid next week, so I, I need this today, but I get paid next week and.

[00:27:17] I credit code might be a way of solving it, but so might be a salary advance so that you can pull down some of your salary a little bit early. So it's thing like companies like wastestream enable you to do that. I mean, it might be like one of the problems I think clone ourselves incredibly well is, um, I buy five things from a sauce because I don't know what size fits me or whether I like it.

[00:27:36] And I want to be able to send it back without my credit card being hit with 300 pounds and then me waiting for refunds. And I can't spend in the meantime. Bye bye. Now pay lights. It solves that problem perfectly because actually you only pay for what you keep. So I think actually, you know, financial services full stop.

[00:27:51] You've got to pull back to like, what are those core problems that they're trying to solve? And tons of really interesting, exciting businesses rethinking the way that that's done.

[00:27:59] Hector: Matt, I think [00:28:00] you're a good person for me to ask this question, a burning question. I've I sort of wonder about, and I'm, so I use Monzo and, revenues, and I feel like revenue just to innovate much faster. And I feel like they experiment, they release new products.

[00:28:16] Foster. And what I wondered is from your time at tandem, and from what you've seen in the FinTech space, and now as an investor, how can you create an organization that does iterate fast? It does release products really quickly that does innovate super quickly stay relevant. Meet consumers needs in different areas.

[00:28:36] And, and is that something that you guys look at it more? Is that something that you're kind of looking out for?

[00:28:40] Matthew Ford: Yeah, I it's a, it's a complex answer cause I think there's, I think they're completely different businesses and I think was a many, many reasons why they've. Innovated, but equally done very, very well in different ways as well.

[00:28:51] I mean, running a bank is hard. So I think what Monzo did and have done is just phenomenal in [00:29:00] overcoming what is an incredibly difficult, expensive, slow, very constrained. Sex or which is banking. I mean, for Tom, a young 30 year old at the time or whatever it was to go and become CEO of a bank and get through like the full Prudential regulation of it as phenomenally hard.

[00:29:19] And I really wouldn't under underestimate the constraint seems a negative word, but I mean, constraint is a good thing. To some extent when you're dealing with systemic risks, which is banks, you know, if you're taking deposits as money and you're lending that money out, like banks play really.

[00:29:33] Fundamental systemic roles. So, you know, the, the regulator has to really be a lot more cautious than the many other sectors weren't given, given the role that banks play in the economy. So what Monzo did they, they picked up the hardest bit to some extent, and so did tandem and started stalling of, you know, going and getting that full banking license and then being able to deliver something that was so much better, so much different, so much faster, so much, and like completely different from what the existing [00:30:00] incumbents within.

[00:30:01] So I think. Monzo has that, those challenges, which has all of these constraints, but it had an amazing DNA, which was just this, like listen to every single thing that the customer wanted and then pick bit by bit by bit the biggest pain points and just make a bank a hundred times better. And I think that's exactly what they've done.

[00:30:19] They've made a bank a hundred times better and I was trying to communicate, we were having dinner with some friends at the weekend who didn't use Monza. Hadn't even heard of monster. I was trying to explain like, why you should get monster. And it, it was a weird thing to explain because it's like, it's like a bank, but it's lot better.

[00:30:35] And I'm like, oh my bank's kind of okay. Like, yeah, yeah. But have you ever lost a card? Because it takes like a week until you get it back and they're like, oh, actually, yeah, that is a bit annoying. But they basically just on every single thing that a bank has done and incrementally done it, that's it. The, the bits that they've really struggled on is clearly the credit side, because you know, they, although they've managed the, the bank license phenomenally well, you know, that they didn't come from a credit first background.[00:31:00]

[00:31:00] They didn't think about lending as the starting point. And I think they've now got that big challenge, which is how do you. Um, keep building all those features that customers want, but then ultimately monetize in the same way that a bank monetizes, which is through landing. Um, so I think they've got, they've got that big open question to solve Revolut revenue.

[00:31:18] It's just a completely different business. I mean, Revolut looks in many ways a bit like. Monzo, but they just came, they came from the travel sector initially, you know, it was, um, when I travel abroad, I get completely ripped off on it on effects. Let's, let's build a better one of those. So as a result, the business was set up in a very different way.

[00:31:36] You know, there was no systemic risks or any of that. And then as they saw some customer demand, they could very quickly throw out a test and they could learn whether that was right and then they could add it on and over time they built a phenomenal number of features. And I mean, it staggers me how many different things that Reveley offers.

[00:31:52] And I'd love to see the customer segmentation, because they've probably got about 15 different kinds of, uh, segments of crypto trading through to FX you name it, [00:32:00] but they've just come from a very different angle and know they're ending up at very similar points. But, you know, I think for the ones I have to succeed at will need to get into lending.

[00:32:09] I think it will have to. The better at being a bank than others by Revolut Revolut. It's like, uh, Amazon prime for, uh, for like the periphery of, of banking. I don't think Revolut is disrupting banking. I think it's, it's, it's solving the periphery doing it phenomenally. Well, I'm making a lot of money, but, um, but yeah, I mean, long answer to a short question, but.

[00:32:30] Th th there's many reasons there's regulatory, overhead, there's just approach, you know, you can't just throw something at the wall and see whether it sticks. If you're fully regulated as a bank, but being a bank gives you a huge amount of opportunities and other revenue are moving towards getting towards it.

[00:32:44] Being a bank fully, you know, internationally, they've already got a bank license in Europe, but they're getting there over time, but they're just coming from completely different places.

[00:32:53] Hector: Yeah, I think that's, that's really interesting. Yeah. I think that the question came from a place of just slight disappointment that [00:33:00] like, as an early moms I use, I just kind of, and an early adopter of all things, tech, I just want to see me products the whole time.

[00:33:06] Matthew Ford: intrigued, like what, what do you want to see on DS or the crypto features of reveling?

[00:33:11] Hector: So, so I think their roadmap I've looked at perhaps, and I've thought that some of the stuff looks right. Cool. And yeah, maybe it is just having, I would rather have one app, which kind of does it all, rather than having to have accounts with free trade at counselor's revenue, with Monzo, with whoever else, to get the job done.

[00:33:31] And it feels like Revolut is closer to that, but still, you know, they haven't nailed crypto as an, I still have to have. Coinbase pro account to get lower fees and to get access to the right cryptos. I still have to have a free trade account or trading two on two account to get access to the right. Shares so it doesn't quite feel like anyone's nailed that kind of super app yet.

[00:33:53] Matthew Ford: Yeah, I definitely agree. I mean, revenue obviously going from the soup soup, perhaps side, I mean, personally I use, [00:34:00] I like dabble with the crypto piece through Revolut, although also use. Many of the other crypto trading apps as well. So, you know, they, haven't got my full share of wallet that I, I do use them for stock trading.

[00:34:10] Uh, I mean, we, we invest in drive wealth through power reveling, stock trading, and you know, that they are one of the better ones for getting access to us equities through, through Revolut. So I do use it for that, but I do mind cool banking through about three months. And I know what you mean.

[00:34:24] I know what you mean. They did so much and then they, they don't, they don't have the say the full breadth of it, But what they've done, they've done phenomenally well. But it completely depends what you need this, but it's

[00:34:34] Hector: definitely, it sounds like I'm slating Monzo. I use Monzo is my current account as well.

[00:34:38] That might call bank. so yeah, I just want to put that out

[00:34:40] James: there. Well, there's so much more we could talk about. But I think, um, we're, we're running out of time. We've got a quick fire games, Claire at the end, which is, we loved them.

[00:34:53] Find out if there were sort of three people that you go for business lunch with, who would they be?

[00:34:58] Matthew Ford: So good question. So [00:35:00] business lunch. So I think one of the Coliseum brothers, I would say, and I I'm kind of torn between which one, but I'm going to say Patrick, cause I think, you know, Being within FinTech last 10 years of all the businesses that have built Benbella I think Stripe is by far the most incredible success story, really of them essentially just enabling.

[00:35:22] Uh, enabling a whole economy in some ways, uh, you know, it was so difficult to accept payments, but it wasn't just about payments. This was about anybody being able to buy online and sell online easily. And I think what Stripe did was phenomenal. So, and he was how old was it? He was like, he's younger than me.

[00:35:39] I mean, he was like early twenties when him and John sent out. So, I mean, I would definitely have him around the table because he's an absolute hero. Um, and he's, he's one of these people, if you follow him on Twitter is extremely well-read. Like, I I'm sure he would spark a ton of interesting debate, probably not about FinTech, but about anything else that he's been reading.

[00:35:58] So I definitely have Patrick,

[00:35:59] [00:36:00] so yeah, my second one would be Sheryl Sandberg. Um, again, again, just thinking about. Companies that have had a phenomenal impact on the world.

[00:36:08] Facebook has undoubtedly been one of them and it'd be really easy to say, oh mark Zuckerberg, but Sheryl Sandberg's been there kind of in the shadows to some extent, but the heart of that organization, driving that organization, she's also done like a phenomenal amount of amazing things as well, kind of outside of Facebook.

[00:36:25] So I think she'd be a really interesting person as well. No, both of those kinds of Silicon valley. So that's probably not ideal, but, my third one, isn't actually alive. So I don't know whether that breaks the rules or not, but, like an absolute hero of mine was as, has always been Alan Turing.

[00:36:39] So, I was kinda thinking back of, what historical figures and, and it's not that historical, but what historical figures would you. Sit around the table with and get that perspective on the modern world. And now he's kind of the father of computing to some extent, and given everything that we've experienced the last 20, 30 years, I mean, I would love to have him around the table to [00:37:00] understand, you know, did he see the world going this way?

[00:37:03] You know, what, what would, what would he think about. Well, I mean the internet and, you know, and, and everything that's, that's come off the back of that. So yeah, those would be my three. So I don't know what that trio would be like, whether it would be a fun party or not, but, but let's see. That was great.

[00:37:19] You get three points there for three unique guests that we haven't actually, that was going to be an interesting conversation. Well, Matt, thank you so much. As I said, you know, I'm sure we could talk a lot more in depth about lots of different things, but, um, it's been great to hear, you know, your backgrounds and what you guys are doing in the FinTech space and some of the trends that you're seeing really, really interesting.

[00:37:44] So thank you so much for coming on and, yeah. Good luck with everything. Thanks for having me. Thanks alone. Thanks Matt. Cheers.

[00:37:52] Fascinating stuff there from a moral, one of the top FinTech investors in the UK. So they've got a good feel for what's [00:38:00] going on in the markets. And it's always great to hear from someone that's been on the operator side as well. This week startup spotlight is house boss.

[00:38:10] Hospital's mission is to use technology, to protect and maintain the built environment. Their main product is a wool climbing robot that uses suction to stick to any surface is quite a fascinating company. And they're doing really well securing. Corporate and government contracts. it is hardware, but they've got a really strong team that have got lots of robotics experience and, they're currently fundraising. So any hardware investors out there do get in touch.

[00:38:41] Thanks again for listening to riding unicorns. Catch us next week when we've got Xian name. Former founder of touch surgery, which was acquired for many millions. So look out for that one. See you next time.