Startups A16z's fintech leads say 'Silicon Valley is being unbundled'...

A16z’s fintech leads say ‘Silicon Valley is being unbundled’ –


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Last month, Andreessen Horowitz – one of the largest and most prominent venture capital players – announced that his “headquarters will be in the cloud” moving forward.

Founded in 2009 in Menlo Park, California, the company is also known as a16z and has been a symbol of investment in Silicon Valley for years.

The new philosophy in this post-COVID era of remote working is that there is no longer a need for a centralized headquarters. This philosophy extends to the fintech team.

I sat down (pretty much, that is) with General Partners Angela Strange and Anish Acharya to learn more about why the pair believe that more people working globally offers huge opportunities for fintech companies. The interview has been edited for clarity and brevity.

TC: Tell me what you think is the biggest change you’ve seen regarding how businesses are built in this post-pandemic era.

Anise: If you were… building a startup five, 10 or at least 15 years ago, most of the work in focus was very local, meaning you were what we call ‘default local’. You’d have a group of people gathered in a brick-and-mortar office and toil to build a software product and sell it to customers who were probably in your country — maybe even in your neighborhood if you’re in Silicon Valley — but certainly in your country. And over time, if the product and company were successful, you would slowly expand globally.

And the big trend that we’ve already seen happening — and COVID has catalyzed a lot of it — is that by day one, companies increasingly want to be global. And software lends itself to that.

When Google launched, there was no reason why you couldn’t use Google on launch day in India or any other country where you had internet access. But the problem, of course, is that while software is global, money is very local. This is really where much of our fintech thinking originated. The idea now is that the company of the future, and the company of today, will be global on day one and the ability (for fintech companies) to build all the infrastructure so that that company can operate and sell globally on day one.

TC: I think that’s an interesting point. It’s very complex, isn’t it? If you’re talking about different countries, and as you said, global money is very much a local matter. Every country, every region approaches it differently. And I think that may have intimidated some companies in the past.

a16z General partner Anish Acharya. Image Credits: a16z

Anish: The difference is that when you have a platform that can handle a lot of that for you, the idea is that the company doesn’t have to worry about that. Like what we saw a few years ago with global payment acceptance. A number of companies went out and made it very easy to accept payments with local payment methods in every country. If you had to identify and do all those integrations yourself, it was very difficult. But if you could use a single payment provider that provides that to you for a fee, it suddenly becomes a lot less painful.

Angela: Prior to this service, I would have a meeting with a global credit card company dealing with currency spending management and wonder ‘who would need this’? Well, it would probably be companies that have been around for five to ten years to get to this point. They started in one country, then went to another, then went to another. Your customer for a multi-currency auto-matching expense card would be a fairly large business customer.

If you’re going to start a business in that space, you’d say ‘holy shit, I have to build a huge product. I have to cover tons of different countries and I have to do a corporate sale which means raising a lot of money before I can even sell it.” While now you have companies like Jeeves as an example and from day one they have operations in Colombia, Brazil and Mexico. And they need that [management] immediately. So you now have this great opportunity to sell to the new – instead of selling to the old – because all of these new businesses need your products and services from the start, making for a much larger, much more accessible market. Many of these newer companies and newer startups are actually target customers, because of their needs. If they grow, the company can grow with it.

a16z General Partner Angela Strange. Image Credits: a16z

The other thing, the other way around, is that companies that expanded into different countries over time actually had to hire someone whose job was a few hours to manually log into all their different bank accounts in their different countries and do this in a spreadsheet. to capture, that is completely ridiculous. If you’re really an early startup, can you afford a resource to do this? No. You must have software.

Anise: Right. If you’re a company that hires people internationally, you were probably an old-fashioned company with a payroll team all over the world and expensive fancy Oracle integration. Now post-COVID there are so many startups distributed worldwide. We are going to the cloud ourselves. Now companies like Deel and others are making it possible for startups to just do it in a ready-made way and not think about where their employees are based.

TC: Angela, you and I have talked a lot about Latin America and how the growth there has clearly been explosive in recent years. What other regions are you looking to for potential investments?

Angela: There is an interesting ‘second order’ effect. It used to be where the executives and very early employees were where a company’s headquarters was. But now in Silicon Valley or other big cities, CEOs will come from other places.

Anise: Yes, it’s a great point. Because if you think about what Silicon Valley is, if we untangle Silicon Valley a little bit, then of course there is a place – but then there are Silicon Valley networks, Silicon Valley ambition, Silicon Valley capital markets and Silicon Valley talent, companies , etc. … You can really take all these ideas outside of Silicon Valley. That simply had never happened before because of the network effects component. Between people being distributed globally and COVID catalyzing this change, it feels like Silicon Valley is being unbundled.

One of my favorite things about Marc (Andreessen) and Ben (Horowitz) and the entire company is their willingness to change their mind. We’ve been so focused on Silicon Valley historically, and I think the new fence posts just put a fine line under the fact that we’re no longer like that — and that was a change in a relatively short period of time.

TC: Geography aside, of course, which areas within fintech are you most excited about?

Anise: The world is just beginning. The narrow view of fintech is that it is banking, payment, lending and insurance. But I think the broader picture is that we see fintech as a new business model for internet companies. In that world, the global opportunity is so much greater. So, cross-border and global is a big focus, and asset management is something that we’ve spent a lot of time on and you know, that means very different things than in the past. It means asset classes like crypto that you would never have seen as wealth management, as well as new groups of people to be served. For example, young people who work at companies in Silicon Valley have very different personal financial challenges than those who are about to retire. I’m also looking at some things in the consumer space, like the idea that the couch for Gen Z will be dramatically different from the couch of other generations.

Angela: Infrastructure. Managing teams and currencies worldwide used to be a problem you could solve later. It is now a problem that we must now solve. I’m literally flipping through my entire infrastructure stack and thinking, ‘Okay, if you had to make this work for 10 countries from scratch, what would that company look like?’ Also any issue related to crypto and fiat asset management only. We’re starting to see that on the infrastructure side too, because you’re trying to integrate people from the fiat world into crypto. You have to comply with all kinds of banking rules, but you also have to understand the web3 world. There are a lot of different opportunities in that scene that we as a company are looking at.

My weekly fintech newsletter, The Interchange, launched May 1st! Sign Up here to get it to your inbox.

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.


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