Q&A: Fintech funding is having a 'level-setting,' says Money20/20's chief growth and finance officer

At Money20/20 USA, Insider Intelligence caught up with Scarlett Sieber, the event’s chief strategy and growth officer, after the America’s Got Access startup pitch competition. Sieber shared her take on fintech funding in this economically uncertain time and whether the “every company is a fintech” sentiment has peaked yet.

The following has been edited for clarity and brevity

Insider Intelligence (II): How has the fundraising landscape changed for fintechs in recent months?

Scarlett Sieber (SS): So much money has been coming into fintech, especially in the last five years. The angel investors and earlier-stage funds that I’d gotten to know when I was an entrepreneur were all starting to get into it. It felt like there was almost too much money invested. People had valuations that I thought were quite inflated. I think this is a level-setting.

But even though funding isn’t what it was, it's still very strong and in certain geographies, it's actually increasing. Now it's about making sure that the money lasts. That’s tougher for B2B companies with longer sales cycles that require more investment up front. VCs are looking for opportunities with earlier ROI. It’s not just, “Hey, cool, you have hundreds of thousands of customers.” Now they’re asking, “How is that actually moving into revenue?”

II: Do you think that funding is down mostly because there are fewer mega-rounds, but smaller rounds are still happening at the same pace? Or is it across the board?

SS: I think it's taking place across the board, but not surprisingly, it’s weighing more heavily on the big rounds. But I believe good companies will still get funded. Capital has dried up a bit, but it isn’t lacking. And one thing that my boss, Tracey [Davies (Byers), president of Money20/20], says all the time is: “Never waste a good chaos.” Some of the biggest companies have come out of downturns and recessions.

II: How can startups weather this economic uncertainty?

SS: I think it's just being very smart with your money, if you have it, and focusing on how you differentiate, and on how you’re making people's lives better. Even in a downturn, people continue with certain behaviors. How do you use that as an opportunity to have a real impact?

II: Is there a concern that—with embedded finance, for example—everyone is a fintech now and trying to incorporate a financial component to whatever they're offering?

SS: When I co-authored a book on embedded finance with Sophie [Guibad], people said it was such a niche thing. But now everyone wants to know how they can do that. I think it will be an incredible opportunity for those who have the right strategy, tech, and resources in place—but not everyone should be getting into it. People forget that playing within financial services is really hard because they see the opportunity, but then, oh wait, that regulatory thing or that legal thing. You're going to see a culling of the herd.

II: Do you think we're approaching a critical mass of financialization?

SS: Not yet. When Sophie and I were thinking about writing our book, we asked ourselves, “Who is this for?” Our industry had been talking about it a lot, so we wanted to make sure we had use cases for them. We looked at the big banks that were doing it well, and fintechs that were operating effectively. There are still a lot of opportunities for other brands to get smarter about incorporating financial services into their day-to-day activities so that they know their customers better than they could before.

II: What are those unmet opportunities?

SS: Anywhere up and down the chain, especially on the retail side, from big cheap retail to luxury goods. Like your weekly groceries—making that experience better and actually knowing what your customers are doing and when and when not to offer them a coupon. If a customer is doing something online versus walking into the store, if they’re not tracking every moment, they're not connecting those dots and so they’re always restarting the process.

Read the full Q&A, including Sieber's thoughts about the America's Got Access Startup Pitch Competition.