TechStar’s CEO on the future of FinTech

Important takeaways

• While cryptocurrency remains questionable, blockchain applications and Web3 have plenty of business potential.
• The head of the incubator is excited about developments in Africa, especially Kenya and Nigeria.
• AgriTech and FinTech are on the verge of great leaps and improvements and are still a focus area for private investment.

Sitting at the top of any business gives you a unique view of the economy and new business trends. This applies even more to Maëlle Gavet, CEO of TechStars. As head of a global business accelerator with more than 1,000 portfolio companies and nearly 400 successful exits, Gavet has his finger on the pulse of the next big things happening in technology across a wide range of sectors and business models.

A member of the Q.ai team was lucky enough to sit down with Gavet at the recent Collision Conference in Toronto. Here are key insights she shared about the next big tech investors might want to know about.

Cryptocurrency is not blockchain

As a hot topic at the conference on the back end of several high-profile cryptocurrency failures, our first questions to Gavet focused on the future of cryptocurrency. Gavet was skeptical of backing cryptocurrencies, but sees value in the growing blockchain industry, which is the technology that powers cryptocurrencies, NFTs and other projects.

“The blockchain application called ‘crypto’ remains for me a question mark as to how this is going to develop,” Gavet shared. “I think there’s a very speculative aspect to it, which we’re seeing firsthand right now.”

However, a crash in crypto prices does not mean that blockchain is not worth it. “It does not change the inherent value of blockchain technology and the decentralized approach of Web3.” Although TechStars is not heavily invested in cryptocurrency, it lists Chainalysis, a blockchain data analytics firm, among its portfolio companies.

“This is very early,” she continued. “If you think about ‘Web1’ and up and down to ‘Web2,’ there’s always a bump in the road when innovation comes. I am still very positive on … blockchain and Web3.

Gavet explained that while the media has focused on direct-to-consumer blockchain applications, “most of the impact will come from things that are completely transparent to the consumer.” Business-to-business and backend development in the company’s operations provide plenty of room to explore, develop and mature in the years to come.

Africa is a hotbed of innovation and opportunity

Just before our meeting, Gavet attended a dinner for Black business entrepreneurs. She noticed several startups represented from Kenya and Nigeria. The population of Africa is approximately 1.4 billion. With more than 200 million inhabitants, Nigeria is one of the fastest growing countries in the world.

Lagos, Nigeria’s capital, has a metropolitan population of 21 million. As a hotbed of innovation, TechStars chose Lagos as the location for its first in-person accelerator program in Africa. Others are mainly found in the US and Europe. Gavet and her team have high hopes for their first move to Africa, “We think there’s a lot more to come from there.”

Investment opportunities in Africa range from financial technology to communications to agriculture. Growth opportunities abound in rapidly developing and growing metropolitan areas. Although the exploitation of Africa’s natural resources has not served Africans very well, education, technology and expanded internet and smartphone access give this continent a bright future.

Financial technology and agricultural technology are resilient

The war in Ukraine drew the world’s attention to “Europe’s breadbasket”. As a top food exporter, the strain on the supply chain here ripples across the world, as many UN programs and foreign bakeries rely on Ukrainian exports. At the same time, “people are examining the environmental impact of eating meat and fishing more.”

Although there has been a public market reaction against ESG (environmental, social, governance) investment strategies, Gavet still thinks that investments related to environmental sustainability are a smart place to look.

“I think the ESG label has been used and abused by far too many people,” explained Gavet. “And yet, you also see such an incredible influx of entrepreneurs in this area. For investors like us, there are phenomenal investments to be made in this area.”

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Strategic investments can still pay off

Along with pain in the stock market, there is “definitely a decline [in investments]no doubt.” She shared that there is still plenty of investment capital available to deploy, but investors are concerned that public market valuations are too high. “That means then that in the private markets, you see that companies will not go public until they the values ​​we expected.”

Gavet sees many private investors maintaining a wait-and-see approach before making large investments. When stock markets fall, investors and companies are extremely wary of a downturn. If companies can hold off on fundraising until 2024, Gavet suggests, they might be able to raise money at much more favorable valuations.

Meanwhile, companies are looking as much as ever for disruptive opportunities. From a new 911 service in Africa to refunding bank fees in developed economies, the business world remains quite busy despite the risk of an economic downturn.

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