B2B is the next frontier for Fintech.
The Consumer Fintech Revolution and the introduction of APIs made it possible for anyone to go online to buy, sell, lend, insure, and more. Business-to-business (B2B) transactions have yet to benefit from this same transformation. The digitization of business processes, the introduction of new payment rails and faster payment schemes, and the global supply chain's impact on cross-border payments are driving demand for modernization. Consumers expect digitized processes by default. Businesses are now seeking new and innovative solutions that will enable the same.
At Ardent, we have high conviction that startups enabling this new normal for B2B transactions will win, as evidenced by our current investments in Method Financial, Verituity, Lendflow, and others. We are now looking to invest in companies enabling or utilizing embedded finance and next-generation payment solutions for banks.
Focus areas.
Embedded Finance
Embedded finance gives companies the power to operate on their own terms. They will no longer need to engage with banks or visit branches when they want to conduct any task relating to payments, lending, cards, insurance, or tax management. Any company, especially SaaS companies that are already embedded in their customers’ workflows, will be able to offer financial services within their platform. With specific knowledge of their industry needs and access to unique customer data, SaaS companies can heighten the relevancy and adoption of embedded products. We see vertical software platforms with embedded financial products and services as potential winners in this space.
Software for banks
Banks are slow movers in the digital transformation evolution, but their large customer bases and balance sheets give them a competitive edge. Many financial institutions will choose to leverage third parties to meet customers’ expectations rather than attempt to modernize in-house. Software companies are well positioned to help banks innovate as they can create point solutions that integrate into legacy core banking systems. We are particularly excited about software companies that allow banks to offer next-generation payment solutions, such as Account 2 Account (A2A) and closed-loop rails.
Related posts.
