Matt Brown @matttbrown Twitter profile

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Matt Brown

@matttbrown

2 years

Interchange in 1,000 words (aka the guide I wish I had starting out in fintech)

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Matt Brown

@matttbrown

1 year

Embedded will be fintech’s defining distribution strategy for the next decade. But what’s obvious is not easy. The best way to understand this is through what I call "the iron triangle of embedded fintech". 1/4 👇

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Matt Brown

@matttbrown

1 year

Fintech founders applying to @ycombinator S23, I'm happy to review your app. I'm a YC W16 alum and now fintech investor. Shoot me a DM or email (mb at ). Deadline is April 7!

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Matt Brown

@matttbrown

2 years

We've raised $800M to continue investing *early* in great founders -- from concept to Series A.

Matrix

Matrix is an early-stage venture capital firm, investing from idea through Series A. As a close-knit team of former founders and company builders, we've partnered with companies from Apple and FedEx...

matrix.vc

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Matt Brown

@matttbrown

2 years

1/ Interchange is a burning platform Why is interchange a bad business model for many fintechs and what are the smart ones are doing about it?

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Matt Brown

@matttbrown

2 years

1/ How to index an entire business model or, why I'm excited about specialized billing systems 👇

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Matt Brown

@matttbrown

1 year

New post: how the best fintechs turn risk into leverage

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Matt Brown

@matttbrown

1 year

📈 $FISV (Fiserv) released Q1 earnings this week. Adjusted revenue grew to $4.28B (+10%), thanks to strong growth in Merchant, Payments, and Fintech segments. Some highlights…

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Matt Brown

@matttbrown

2 years

We're focusing on several core areas, from fintech to applied AI, dev tools to software-defined hardware, and beyond. Learn more here:

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Matt Brown

@matttbrown

1 year

Very cool project... open source playground to simulate a payment network and learn how issuing, acquiring, and ISO8583 work. From @alovak and @moov

GitHub - alovak/cardflow-playground: A learning environment for exploring card acquiring and...

A learning environment for exploring card acquiring and issuing systems - alovak/cardflow-playground

github.com

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Matt Brown

@matttbrown

2 years

Why aren't there more winner-take-all-dynamics in fintech? It's a massive market with powerful feedback loops, but it's more fragmented than it feels like it should be. I don't have an answer, but outlined my thoughts and a few hypotheses here:

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Matt Brown

@matttbrown

2 years

Vertical ERPs (VERPs) will be one of the largest and most exciting software categories over the next decade.

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Matt Brown

@matttbrown

1 year

@shaig @matrixvc actively investing / leading rounds from pre-incorporation concept stage to Series A.

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Matt Brown

@matttbrown

1 year

🍀Merchant acceptance is another bright spot, driven mainly by Clover. Clover’s annualized GPV grew to $231B (+17% YOY) and revenue +22% YOY. Very strong growth, especially at that scale.

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Matt Brown

@matttbrown

11 months

💰⚙️ New Post: Fundraising for fintech infra is different Fintech infra and embedded fintech are two of the areas I’m most excited to invest in. I’ve seen a lot of Seed - Series A pitches recently, and think many miss key points because they follow generalist advice...

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Matt Brown

@matttbrown

1 year

These factors are always in tension with one another. You can optimize two factors at most at a time. Improving one necessarily degrades a third. 3/4

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Matt Brown

@matttbrown

11 months

👻 New post: Vertical, horizontal, and ghost markets

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Matt Brown

@matttbrown

2 years

9/ Read the full post here:

How to index an entire business model

TLDR Changes in technology lead to new business models (e.g., browser → SaaS → AWS → freemium).

notes.mtb.xyz

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Matt Brown

@matttbrown

1 year

🏦 The “fintech” or core banking segment unsurprisingly grew the slowest (+2%), but still had some big wins.

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Matt Brown

@matttbrown

2 years

Everything @sacrainc publishes is excellent, but especially so when it features @bonsaiinc !

Jan-Erik Asplund

@janerikasplund

2 years

today, we launch our report on contractor payroll—4,000+ words on the $1.4T market to build 'cash app' for global labor market feat interviews with: - @deel COO @DanWestgarth - @Wingspanapp CEO anthony mironov - @bonsaiinc co-founder @matttbrown 👇

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Matt Brown

@matttbrown

2 years

Enjoyed this chat with @janerikasplund and @sacrainc on the opportunity in vertical ERPs and fintech!

Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs

Sacra interview with Matt Brown, partner at Matrix Partners and co-founder of Bonsai.

sacra.com

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Matt Brown

@matttbrown

2 years

Billing and metering for usage-based products like APIs are a huge pain + heavy lift for many teams. @adamdsommer and the team at @Kable_io are the best solution for it! Check them out:

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Matt Brown

@matttbrown

2 years

I loved chatting with @will_beeson at @rebankpodcast about everything from payments and BNPL to strategies for embedding fintech in vertical SaaS to the challenges of interchange, and much more. Here's the link:

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Matt Brown

@matttbrown

2 years

4/ There are multiple ways of diversifying, but it often comes down to combining card payments (issuing and/or acquiring) with a mix of software, value-added services, and lending. Color coding fintechs product lists shows how far this diversification has gone. E.g., Stripe:

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Matt Brown

@matttbrown

1 year

Here's the full post. Read how different companies have approach this and some strategies for building a big embedded product in the future: 4/4

The iron triangle of embedded fintech

The next big fintechs will win with novel distribution, not novel products. In the 2010s the biggest fintechs were product innovators. They closed the gap between the poor UX of traditional financial...

notes.mtb.xyz

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Matt Brown

@matttbrown

2 years

Undifferentiated heavy lifting in fintech

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Matt Brown

@matttbrown

1 year

It seems like open source is increasingly common in fintech infra. I've seen , , . Who else is out there?

Hyperswitch | Home Page

Fast, Reliable and Open Source payments switch that lets you connect with multiple of payment processors

hyperswitch.io

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Matt Brown

@matttbrown

1 year

The stream of news from Israel makes it clear there's an incredible amount of evil in the world. Silence and equivocation are complicity. There's also a lot of good worth defending, fighting for. Israel is worth defending. That should be clear to any parent or child, regardless

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Matt Brown

@matttbrown

2 years

@jasonlk Paraphrasing Thiel… there’s no subprime market in venture

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Matt Brown

@matttbrown

1 year

Tech loves bundling and unbundling. There’s been a lot written on how these work, but little on when they work. They're great strategies, but diametrically opposed. So when should founders pursue one or the other?

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Matt Brown

@matttbrown

1 year

💪💪💪

Harry Stebbings

@HarryStebbings

1 year

$65BN of enterprise value from this $450M Matrix fund. What a banger! 👇 Matrix Partners IX ($450M) @BostonVC @dcstalder @antrod @jdh invested in early rounds of: Canva ($40B last valuation) Zendesk ($10.2B acquisition) Sila ($3B last valuation) Postmates ($2.6B

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Matt Brown

@matttbrown

2 years

5/ Read the full post here: Thoughts and feedback welcome!

Interchange is a burning platform

Many fintech business models are based entirely on card payments: they make money when users accept or make cards payments. Startups have been crowding into the slim and inflexible card payment fee...

notes.mtb.xyz

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Matt Brown

@matttbrown

2 years

8/ There's an opportunity in the inverse of SBS as well, in managing how companies make large, complex, and recurring payouts. For example, @deel does this for international employees and @stir for the creator economy.

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Matt Brown

@matttbrown

2 years

Some ideas I can't stop thinking about, or requests for fintech startups

Request for Fintech Startups - Summer 2022

Some ideas I'm thinking about now: vertical ERP's, next-gen open banking, closed loop payment systems, financial services for HNWI's, and unbundling Turbotax

notes.mtb.xyz

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Matt Brown

@matttbrown

1 year

Platforms that embed a financial product (such as Stripe for payments, Unit for banking), must make trade offs between three factors: 1. Ease of ownership 2. Good unit economics 3. High acceptance rate 2/4

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Matt Brown

@matttbrown

3 years

@mengxilu ?

Get more customers live | Scope for Vendors

Scope is an expert marketplace, professional services, and referrals—all in one. We work with customers, tech vendors, and experts to facilitate tech projects.

www.scopeinc.com

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Matt Brown

@matttbrown

2 years

Excited for @MatrixPartners to partner with @davidmarcus on Lightspark!

Matrix

Matrix is an early-stage venture capital firm, investing from idea through Series A. As a close-knit team of former founders and company builders, we've partnered with companies from Apple and FedEx...

matrix.vc

David Marcus

@davidmarcus

2 years

I wanted to share that we are starting a new company called @lightspark to explore, build and extend the capabilities and utility of #Bitcoin . As a first step, we’re actively assembling a team to dive deeper into the Lightning Network. (1/3)

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Matt Brown

@matttbrown

1 year

⚡️Zelle is big growth driver in payments revenue. +42% in Zelle transactions and +32% in Zelle users. $FISV is one of the largest enablers of Zelle for financial institutions. $FISV also ready to support FedNow in July, along with its NOW RTP gateway.

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Matt Brown

@matttbrown

11 months

Here's what's different in fintech infra: (1) Quality trumps quantity in customers and revenue. (2) Don’t be afraid to fire customers (and talk about it). (3) Show that you can catalyze, not just sell. (4) Don’t be afraid of professional services. ...

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Matt Brown

@matttbrown

1 year

To all those that celebrate, happy FedNow Day! 🚀

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Matt Brown

@matttbrown

10 months

@brunoswerneck 🙌

Hedgehogs, foxes, and VCs

What matters in early-stage investing (and why I think "why now" is the most important thing).

notes.mtb.xyz

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Matt Brown

@matttbrown

4 years

@Altimor Have you read 'Design in Nature'? Similar to this and all about how physical and info systems are designed to maximize efficient flow:

Design in Nature: How the Constructal Law Governs Evolution in Biology, Physics, Technology, and...

Design in Nature: How the Constructal Law Governs Evolution in Biology, Physics, Technology, and Social Organizations

www.amazon.com

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Matt Brown

@matttbrown

1 year

I tried thinking through when it's a good time to do one or the other: Thoughts and feedback welcome!

Bundling, unbundling, and timing

The tech industry loves bundling and unbundling. There’s been a lot written on how it works, but little on when it works. Here are some factors that may determine when is the right time to bundle or...

notes.mtb.xyz

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Matt Brown

@matttbrown

1 year

@mikulaja 💯

Interchange is a burning platform

Many fintech business models are based entirely on card payments: they make money when users accept or make cards payments. Startups have been crowding into the slim and inflexible card payment fee...

notes.mtb.xyz

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Matt Brown

@matttbrown

2 years

6/ For ex, ecommerce CPG subscriptions require integrating billing, inventory mgmt, and logistics, plus an array of specific features, like changing a shipment composition, skipping or redirecting delivery, etc. Co's like @SkioHQ & @RechargePayment have arisen for this model.

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Matt Brown

@matttbrown

2 years

7/ SBS are growing to serve other business models, like usage-based ( @Kable_io ) and hardware-as-a-service ( @hardfinhq ), which have their own complexities specific those models.

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Matt Brown

@matttbrown

1 year

@davegirouard 1. Most US payment volume isn't embedded (yet). Lots still offline/manual: $27T checks, $91T ACH. Will get more embedded with B2B software adoption, FedNow, etc. 2. BNPL and POS lending generally is a fraction of the embedded lending opportunity. Again, especially true in B2B.

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Matt Brown

@matttbrown

2 years

@CharleyMa

Mailwarm : The email warm-up tool

Raise your email reputation to avoid the SPAM folder. Mailwarm interacts with your email account as tons of interested leads would do, so your IP reputation rises.

www.mailwarm.com

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Matt Brown

@matttbrown

2 years

2/ Many fintech business models are based on card payments: they make money when users accept or make card payments. Startups have been crowding into these slim & inflexible fee pools, although they weren’t designed to support multiple venture scale co's.

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Matt Brown

@matttbrown

2 years

3/ Even if these fee pools don’t compress (and there are several growing reasons why they might), startups are realizing how limiting interchange is. The smart ones have started diversifying their monetization strategies, providing a few potential models for others.

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Matt Brown

@matttbrown

11 months

RIP to one of the OG’s

Bloomberg

@business

11 months

Intuit is winding down personal-finance app Mint, and pushing users to shift to Credit Karma, a similar service that the company acquired in 2020

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Matt Brown

@matttbrown

2 years

3/ These new business models allow value to be created & captured in new and complex ways, and so require a purpose-built stack to manage the workflows and payments. I call these “specialized billing systems” (SBS), and think they can “index” an entire business model.

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Matt Brown

@matttbrown

2 years

5/ Companies like Zuora, Recurly, and Chargebee are examples of SBS for the SaaS model, which is now well-known and mature. New business models are evolving faster and are significantly more complex, and so the need and opportunity for SBS are much larger as well.

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Matt Brown

@matttbrown

4 years

@ganeumann @dcstalder

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Matt Brown

@matttbrown

3 years

@MatrixPartners 2022 Fintech Index is out! → "this year will set another record with at least $300 billion in fintech liquidity."

Fintech outperformed the market in 2021, and it's set to do even better | TechCrunch

We were bullish on fintech when we launched the Matrix Fintech Index in 2017, but even we underestimated the magnitude of the growth to come.

techcrunch.com

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Matt Brown

@matttbrown

11 months

And here's the full post:

Fundraising for fintech infra is different

Fintech infra and embedded fintech are so unique that much of the generalist fundraising advice out there doesn't apply to them. Here's what I've learned from many pitches for infra opportunities.

notes.mtb.xyz

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Matt Brown

@matttbrown

1 year

@iankar_ @CheckmateSaves @harryjohndixon

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Matt Brown

@matttbrown

2 years

4/ i.e., they can monetize every company with that business model. @eladgil first wrote about "index companies" (), which index a given market (e.g., Coinbase indexes the crypto market). SBS are powerful because they index an entire *business model*.

Index Companies

Sometimes there are markets that are clearly going to grow massively over time. For example, ecommerce, genomics, crypto are all markets which were clearly going to compound over time. It might have...

blog.eladgil.com

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Matt Brown

@matttbrown

11 months

🤯🤯🤯

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Matt Brown

@matttbrown

2 years

@paul_griffiths we are at @MatrixPartners !

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Matt Brown

@matttbrown

2 years

2/ Changes in technology lead to new business models (e.g., browser → SaaS → AWS → freemium). This cycle is moving faster and enabling many novel models, such as consumer ecommerce subscriptions, usage-based, and hardware-as-a-service.

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Matt Brown

@matttbrown

11 months

@sm Check out

Payment management solutions for platforms and marketplaces | Revenew

Revenew is the all-in-one command centre for managing payments, growing margins and streamlining financial and revenue operations, for today's competitive platforms and marketplaces.

revenew.co

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Matt Brown

@matttbrown

4 years

@Altimor 100% !

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