Patricia Kemp, Oak HC/FT Co-Founder & Managing Partner – The Future of Fintech, Crypto Regulation, & Why 2023 Could Bring a Wave of Fintech M&A

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My guest today is Patricia Kemp, Co-Founder & Managing Partner at Oak HC/FT, a $5+ billion venture and growth equity firm investing in companies driving transformation in fintech and healthcare. Founded in 2014, Oak has backed fintech companies like Blend, Ocrolus, ClearCo, Rapyd, Pagaya, Aplazo and many more.

In this episode, we discuss:

Spotting and identifying fintech trends and how to think about the future of the industry

"We think we're in the early innings, we think there are at least 10-20 more years of changes within fintech. And we believe it's all for the better. I mean, it's this sort of a win-win-win where the customers, consumer, and SMBs or large enterprises - the solutions that are being brought to bear tend to make for a more efficient and optimized outcome."

The state of the crypto market and why Tricia believes stronger regulatory frameworks would be beneficial and help foster innovation in the crypto industry

“If you are front and center with any regulators, we believe that's a positive. We also believe… that clearing up any concerns in the digital asset world, in the crypto world, is going to be an advantage for everybody. Its ambiguity does not help innovation.”

Buy vs Build. 2023 might bring a big wave of Fintech M&A activity for three important reasons:

• Some very good companies may be unsuccessful in their next fundraise, which will open the door for larger companies to acquire them at attractive prices.
• Funds will have the opportunity to make some investments that previously were out of reach because of past valuations.
• A trend of re-bundling might lead to specific products or pieces of technology being rolled into larger companies for platform plays, where the whole might be better than some of the parts.

Building a team of investors – when bringing on new talent, Oak looks at three core requirements:

• Values and approach. Find someone who shares the same values and interacts with entrepreneurs in the same way the team would.
• Expertise and interest. Find someone with experience, network, and passion for fintech
• Judgment. Investing comes down to good judgment, so you need to find someone who’ll be able to analyze and understand companies the way you’d expect them to.

The importance of over-communicating… and a lot more!

“We're very communicative… our approach is a team approach. It's not a siloed approach. So we have lots of conversations early on about particular investments, in particular theses, and particular management teams.”

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Miguel Armaza is Co-Founder & Managing General Partner of Gilgamesh Ventures, a seed-stage investment fund focused on fintech in the Americas. He also hosts and writes the Fintech Leaders podcast and newsletter.