Traction Podcast
00:09:54 · Lobo, Roy Luo
[00:09:54] S2: Your thesis specifically has been fintech. Is that because of your Goldman Sachs and real estate investing background, or how did that come about? [00:10:04] S1: Sort of. When I was still at Goldman, this is gonna sound silly, but I had this idea of, like, effectively what was Venmo before Venmo had really started taking traction. And obviously, it's this huge big thing, and I think everyone in the world had some idea around Venmo. But I just naturally had an idea around how commerce needs to be digitalized. And over the past decade plus, that obviously has happened in space across many different forms, but that's always been a driver for me. And in particular, I think financial services or financial products are literally everywhere you look. And when you think about different end markets, end verticals, we could talk a little bit about how in vertical software in particular, all roads lead to financial services products. Right? There's so many vertical software businesses out there that have embedded finance as part of their offering at some part of their journey. And I think it's true that ultimately financial products are everywhere you look, and technology is a great way to bring forth financial products in a more cost effective, efficient way. And that changes how transactions and commerce work all over the world. [00:11:16] S2: I did a great podcast a couple years ago with Matt Harris from Bain, and it was every company is a fintech company.
00:11:16 · Lobo, Roy Luo
[00:11:16] S2: I did a great podcast a couple years ago with Matt Harris from Bain, and it was every company is a fintech company. [00:11:23] S1: Yeah. A little bit like that. They're two big figures. Every company is a fintech company, and software is eating of the world, and I believe in those two axioms. And I'd add that
00:11:32 · Lobo
[00:11:32] S2: every company is an AI company too. Right? Because yesterday's innovation always becomes tomorrow's commodity. And if you look at it in the technological shift from on prem to SaaS, and then within SaaS, there was a bunch of things that happened within the cloud, right, like mobile and social and fintech. And now I think by the end of next year, if your product is not an AI product, I think you're a laggard. I think we're heading into the world where AI is doing the work autonomously, and there's enough data points to prove to that. For example, agentic wrappers on LLMs are one and a half, two times more accurate and faster than the LLMs alone. And if companies are not leveraging these technologies to make the outcome better, faster, cheaper for their customers, I think they get left behind. And we're also, I think, interestingly, feel we're heading in a world where if AI is doing the work autonomously, then why do you need a UI to do inputs? Like, what does the UI look like? It's a it's a very interesting time. Wow. And fintech is a core part of it because, like you said, payments. And the more data you collect from somebody and the more data across their system you collect, like, from... Maybe it could be product data stitched with financial data. You have the opportunity to offer products... Financial products lending being a big part of it. I'd boast... We started with r and d tax credits, and we collected so much data from a company's technical and financial systems that we then did a 100,000,000 warehouse facility to lending. We securitized our tax credits to lend. Right? So there's a lot of these interesting opportunities for businesses. Now you've invested outside of fintech too. Right? You've done Figma and Canva. How did that come about?
00:13:27 · Roy Luo
[00:13:27] S1: So ultimately, those two axioms we talked about, ultimately, I'm a big proponent of how software transforms workflows and drives impact in the communities in which they serve. And so while Canva and Figma not necessarily are providing financial products, the idea around any fintech that I've ever made and a lot of the fintechs out there that I'm really excited by, it's really how software technology and now AI is enabling them to deliver financial services products in a really cost effective, efficient, and disruptive way. And so I would say Canva and Figma are not necessarily the ones that are doing the financial products themselves, but we can talk at length about any of the other businesses that we work with, and it's software led. I think you did an interview with some of the folks at Ramp before, but it's an amazing, call it, fintech company, but really what makes it special are the products that they've built, and those are software products. And embedded in it is obviously a financial services offering, but when you talk to customers and what got me so excited about Eric and Karim and their leadership and what they built there, it's really about the products that they built and the love from customers that they had around the products that they built.
00:14:43 · Lobo
[00:14:43] S2: I think that's the ultimate thing. You build something that is loved and used by customers, high frequency, high intensity, not like I gotta use it once in a while, but you make it... You you give somebody a product where it becomes a core mission critical thing in my journey that even removing it is a huge pain. I can't imagine living without it. ChatGPT is one product like that for me. WhatsApp is another product like that for me. Right? I've stopped using Google. I exclusively use ChatGPT. So if you can build a product like... Building a product like that in in a boring industry like finance is super, super hard. I think what Ramp has done is super amendable. Now you've also invested across regions. Right? You've invested not only in The US, India, London, beyond. What is the core principle you apply when evaluating opportunities regardless of the stage?
00:15:39 · Roy Luo, Lobo
[00:15:39] S1: Absolutely. We and myself personally are very thesis driven. There are core themes in different markets and different, I would call them, vectors of markets and trends that we're excited by and that we wanna bet on. And whether that takes you across the pond into Europe or down South to Latin America or out East into Asia, we won't... The benefit of Iconiq is that we're large enough and we have the scope that I don't think we would let borders really change or restrict us on finding the best businesses, the best founders, and investing behind the core trends that we have deep conviction on. I would say the most important thing for us is to have alignment with the founders that we work with. And when you find folks out there that are building in a way that really aligns with the philosophy in which you see the opportunity, you'll make that investment. You'll you'll forge that partnership. And we've been lucky that we've been able to do, not just in The States, but all over the world at this point, and it's been working out so far. [00:16:39] S2: Fantastic. So when you look at that alignment, right, I guess at series a and series b, give us some quantifiable rubric of how you assess. What does founder alignment look like? What does business alignment look like? What does the metrics that need to be aligned with your thesis to do a series a and a series b deal?