Top VCs view payments startups as 'inflation hedged.' Here's why they're so bullish on the space.

Hey there! It’s Dan DeFrancesco checking in from NYC. Hang in there. The weekend is almost here.

Today we’ve got the most likely candidates to build a so-called ‘super app’ in the US, sports startups that investors are excited about, and more Elon Musk shenanigans.

But first, credit or debit?

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mobile payments

VCs see big opportunities when it comes to overhauling how payments are done.Sarah Kerver/Getty Images for Samsung

1. Fintechs paying it forward

It’s been a bad year for fintechs.

How bad? Venture investor F-Prime’s fintech index, which tracks shares of public fintech names, is down nearly 75% this year. By comparison, the S&P is down roughly 20%, while the Nasdaq Composite is down about 30%.

Yikes.

But as bad as it might seem for fintechs, all hope is not lost. At least one sector is primed to thrive, according to some top investors in the space.

Payments are a bright spot with potential for growth heading into 2023, according to nine fintech investors Insider surveyed.

While it might not be as sexy or exciting as banking or trading, the market for payments is prime for disruption. As one investor put it to Insider, the space is “fragmented and confusing,” which typically is a surefire sign of opportunity for new players to clean things up.

And while inflation has been a sore spot for nearly every startup, it is actually a potential benefit in the payments space, according to another investor. Simply put, the more expensive things get, the more money payment players make from their cut handling transactions.

Payments also represent a foot in the door for companies to build deeper financial relationships with their customers, which is the real long game.

Like a toothbrush left at a potential boyfriend or girlfriend’s home, what seems like a small gesture can serve as a tipping point.

“I’m happy to handle your payments. But while I’m here, would you like to consider borrowing some money?”

“Let’s handle this payment, but would you actually be interested in financing it?”

So what started out as a simple payment turned into a serious relationship.

To read more about the five different payments trends VC investors see the most promise in, click here.

In other news:

“Earthrise” from the moon, taken in 1968.

“Earthrise” from the moon, taken in 1968.NASA

2. One app to rule them all! The concept of a super app — a one-stop shop for a user’s financial needs and beyond — is extremely popular in Asia and South America. But can it catch on in the US? A couple of industry insiders share their picks for who is best positioned to stand one up.

3. We asked top VCs to pick the most innovative sports startups. From a company that uses AI and robotics for massage therapy to an alternative-data shop focused on gambling, here are the 22 companies that made the cut.

4. Finance firms are pulling out all stops to get workers back in their NYC offices. Bloomberg details how top firms like Citadel and JPMorgan are designing office space on Park Avenue with plenty of perks.

5. In his effort to seemingly buy every crypto company in the world, FTX founder Sam Bankman-Fried said his firm was raising funding with a goal of conducting even more acquisitions.

6. Climate activists protested inside BlackRock’s headquarters over its investment in fossil fuels, The Independent reports. Meanwhile, Insider has previously reported on nearly a dozen conservative lawmakers who have targeted BlackRock for being a proponent of ESG investing, proving sometimes you really can’t win.

7. It appears the Elon Musk-Twitter deal really is going to happen. The billionaire posted a video of himself carrying a sink into Twitter’s headquarters captioned “Entering Twitter HQ — let that sink in!” He also changed his Twitter bio to “Chief Twit.” Save some jokes for the rest of us, Elon!

8. Speaking of payments, we’ve got a pitch deck for a company combining credit cards with buy now pay later. Check out the 13-page deck Tymit used to raise $26 million.

9. If you’re in the ad industry, be prepared for things to get bad fast. Alphabet and Snap both reported significant slowdowns in ad spend. Here’s why that could spell disaster for the space.

10. This photo showing the distance between the Earth and the moon will make you contemplate your life. Or maybe that’s just me. Check this out, and then go for a walk.

Keep updated with the latest business news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief. Listen here.

Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 

Read the original article on Business Insider

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