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6 fintech investors sound off on AI, down rounds and what’s ahead on August 17, 2023 at 6:15 pm
At the height of the funding boom in 2021, no single sector enjoyed as much VC money as fintech startups did. But in 2023, it appears that fintech companies have to work harder to get funding.
Global funding in the space hit a six-year low in the second quarter, according to CB Insights. Specifically, following a spike in funding in the first quarter driven by Stripe’s outlier $6.5 billion round, global fintech funding declined 48% to $7.8 billion in Q2 2023.
Valuations have also taken a hit. With only a few exceptions, once-valuable fintech firms have seen their valuations drop significantly, based on secondary share activity as analyzed by Notice.co, which offers a pricing tool for the private markets.
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As such, it’s no surprise that artificial intelligence (AI) is a hot topic of conversation in the space, as companies work to incorporate it into their offerings — some more meaningfully than others — in an attempt to stand out.
“We’ve seen many of our portfolio companies adopt AI to increase efficiency, improve automation, and enable faster communication with their customers,” said Lizzie Guynn, a partner at TTV Capital.
But Hans Tung, a managing partner at GGV, warned that just because AI is the hot sector of the moment, investors should not invest in it blindly. “AI is . . . overhyped. AI is central to the core business in some companies, and in others it is simply a supporting character,” he said. “We value domain knowledge and information on how to best apply technical solutions to solve customer pain points, be it consumers or enterprises.”
Overall, navigating the venture landscape as a fintech startup in today’s market requires resilience, perseverance and a more responsible frame of thinking around growth. It’s clear that investors are taking more time to evaluate deals than they were during the funding boom.
Aditi Maliwal, a partner at Upfront Ventures, explained how investors in the space are thinking: “We’re able to take a little bit more time to get to an investment decision, as processes aren’t happening in 24 hours like they did at some point in 2020!”
To help TechCrunch+ readers understand what fintech investors are thinking these days, as well as what you should know before approaching them, we interviewed six active investors over the last couple of weeks. Plus, they were gracious enough to share some of the advice they’re giving to their portfolio companies.
We spoke with:
Mark Goldberg, partner, Index Ventures
Aditi Maliwal, partner, Upfront Ventures
Hans Tung, managing partner, GGV Capital
Lizzie Guynn, partner, TTV Capital
Ed Yip, partner, Norwest Venture Partners
Lauren Kolodny, co-founder and partner, Acrew Capital
Mark Goldberg, partner, Index Ventures
Everyone is talking about artificial intelligence. If a company isn’t already using it, they’re looking for ways to incorporate it into their operations. What is getting the thumbs-up and what’s not in the theme of the moment?
What’s been surprising to me about AI in fintech is how much of it seems to be under the hood (automating rote internal tasks) rather than facing externally (flashy new features). This means that many of the most AI-forward companies may not be the most obvious ones.
Over the years, we have seen many startups, especially neobanks, focusing on very niche segments of the population. What are your thoughts on such specific offerings? Is it a good strategy to be so specific and what do you need to do to be successful if so?
The biggest evolution in consumer finance in the last decade has been for people to see their banks as extensions of their own personal brand, like their clothes, car or music. So, it’s a great strategy and we’ll be surprised by the depth and loyalty of these “niche” communities.
Do you expect to see more down-rounds in 2023? Are you seeing more companies raising extensions or down-rounds compared to 2021 and 2022?
More down-rounds are coming. Supply and demand are still out of equilibrium, and I expect that will change as company balance sheets dwindle.
What are you most excited about in the fintech space? What do you feel might be overhyped? Is anything hyped at this point in the cycle?!
I think the fintech tourists are gone, and it takes real conviction in this market to build and invest. Banking today is harder than it should be, especially for the tens of millions of people who don’t have access to traditional financial services.
How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?
There’s often one chart or slide that defines a pitch. Cut the noise (and the 30-slide deck) and focus on the one thing that matters most to your story.
Aditi Maliwal, partner, Upfront Ventures
Everyone is talking about artificial intelligence. If a company isn’t already using it, they’re looking for ways to incorporate it into their operations. What are your thoughts on this? What is getting the thumbs up and what’s not in the theme of the moment?
Every company will adopt AI as another technology that enhances their existing offering. I don’t think of investing in AI companies as any different from people saying in the mid-2000s that they were investing in the internet or investing in mobile. AI is now a new paradigm that everyone is going to adopt. We know that most companies have already been using data to make decisions, so now they are going to be using open source models to help make faster and more efficient decisions.
That said, a couple of categories are getting a lot of attention in and around the fintech ecosystem:
Copilot solutions for everyone in financial services: While I’m not sure a lot of them are getting funded, I still think the biggest companies will come after this category and provide solutions.
Creating synthetic users for fraud detection: This is a really big use case that can provide a lot of value. We basically have generative fraud at this point, so you need the right type of generative software to combat the constantly changing fraudulent activities/players.
Over the years, we have seen many startups, especially neobanks, focusing on very niche segments of the population. What are your thoughts on such specific offerings? Is it a good strategy to be so specific and what do you need to do to be successful if so?
To help TechCrunch+ readers understand what fintech investors are thinking these days, we interviewed six active investors over the last couple of weeks.
Business
GLOBAL SUSTAINABILITY SUMMIT RETURNS FOR ITS 5TH EDITION AT THE BRITISH PARLIAMENT – HOUSE OF LORDS, PALACE OF WESTMINSTER

FOR IMMEDIATE RELEASE
Theme: “People, Planet, and Profit in the Age of AI and Innovation”
London, United Kingdom — The Global Sustainability Summit (GSS) is officially back for its landmark 5th Edition, continuing its legacy as one of the leading international platforms driving sustainable development, climate action, ethical investment, innovation, and global collaboration.

Convened annually at the prestigious British Parliament, House of Lords, Palace of Westminster, by Ambassador Canon Chinenem Otto, the Summit has, over the last four years, successfully fostered international dialogue and partnerships that have contributed to the advancement of global sustainability goals, the establishment of sustainability-focused ministries, departments and policy structures across national and subnational governments, and the attraction of major investors into sustainable development projects, corporations and emerging economies.
This year’s summit, themed “People, Planet, and Profit in the Age of AI and Innovation,” will explore how emerging technologies, responsible leadership, sustainable finance, innovation, and global partnerships can shape a more inclusive, resilient and environmentally conscious future.

The 5th Edition promises to be the most impactful yet, bringing together world leaders, policymakers, diplomats, investors, academics, innovators, climate experts and youth leaders from across the globe to discuss actionable solutions toward achieving a sustainable and equitable future.
Among the distinguished speakers, delegates and honorees already lined up for the Summit are:
• His Excellency Mallam AbdulRahman AbdulRazaq — Executive Governor of Kwara State, Nigeria and Chairman of the Nigeria Governors’ Forum
• His Excellency Senator Prince Bassey Otu — Executive Governor of Cross River State, Nigeria
• Ambassador Patricia Espinosa Cantellano — Former Executive Secretary of UN Climate Change (UNFCCC) and Former Foreign Minister of Mexico

• Lord Marvin Rees, Baron Rees of Easton OBE — Member of the House of Lords, United Kingdom
• Hon. Neema K. Lugangira — Secretary-General of Women Political Leaders (WPL), Brussels and Former Member of Parliament
• Her Excellency Dr. Netumbo Nandi-Ndaitwah — President of the Republic of Namibia
• His Excellency Nangolo Mbumba — Former President of Namibia
• Former President of Tanzania
• Her Excellency Ambassador Professor Olufolake AbdulRazaq — First Lady of Kwara State, Nigeria and Chairperson of Nigeria Governors’ Spouses Forum
• Your Excellency Dr. Dikko Umar Radda, PhD, CON — Executive Governor of Katsina State and Chairman of the Northwest Governors Forum, Nigeria
• Hon. Sam Shafiishuna Nujoma — Governor of Khomas Region, Namibia

• H.E. Mr. Veiccoh Nghiwete — High Commissioner of the Republic of Namibia to the United Kingdom
• Her Excellency Ms. Macenje “Che Che” Mazoka — High Commissioner of Zambia to the United Kingdom
• Ms. Danielle Newman — Partner Lead, ICT, World Economic Forum
• Leanne Elliott Young — Co-founder, Institute of Digital Fashion & CommuneEast
• Ms. Chloe Russell — Producer & Presenter, Art, Science and Nature
• Professor Marie-Claire Cordonier Segger — University of Cambridge & University of Waterloo
• Dr. Alexandra R. Harrington — IUCN World Commission on Environmental Law (WCEL)
• Professor Payam Akhavan — Massey College, University of Toronto
• Mr. Mallai C. E. Sathya — President, Dravida Vetri Kazhagam and International Movement for Tamil Culture Asia

The Summit will feature high-level panel discussions, strategic investment conversations, sustainability awards, policy dialogues, innovation showcases, youth engagement sessions and international networking opportunities focused on climate resilience, ethical financing, food-water-energy sustainability, circular economy, artificial intelligence, diplomacy and sustainable development.
Speaking ahead of the Summit, Convener Ambassador Canon Chinenem Otto noted:
“As the world rapidly evolves through artificial intelligence and technological innovation, we must ensure that sustainability remains people-centered, environmentally responsible and economically inclusive. The Global Sustainability Summit continues to serve as a bridge connecting governments, institutions, innovators and investors to accelerate practical sustainability solutions globally. Our fifth edition is not only a celebration of progress made over the years, but also a renewed call for global collaboration and actionable impact toward achieving the Sustainable Development Goals and Net Zero ambitions.”
The Global Sustainability Summit continues to position itself as a catalyst for transformative partnerships and sustainable global progress, reinforcing the urgent need for collective action toward a more resilient and sustainable future.
More announcements regarding additional speakers, partners and summit activities will be unveiled in the coming weeks.
News
US May Completely Cut Income Tax Due to Tariff Revenue

President Donald Trump says the United States might one day get rid of federal income tax because of money the government collects from tariffs on imported goods. Tariffs are extra taxes the U.S. puts on products that come from other countries.

What Trump Is Saying
Trump has said that tariff money could become so large that it might allow the government to cut income taxes “almost completely.” He has also talked about possibly phasing out income tax over the next few years if tariff money keeps going up.
How Taxes Work Now
Right now, the federal government gets much more money from income taxes than from tariffs. Income taxes bring in trillions of dollars each year, while tariffs bring in only a small part of that total. Because of this gap, experts say tariffs would need to grow by many times to replace income tax money.
Questions From Experts
Many economists and tax experts doubt that tariffs alone could pay for the whole federal budget. They warn that very high tariffs could make many imported goods more expensive for shoppers in the United States. This could hit lower- and middle‑income families hardest, because they spend a big share of their money on everyday items.
What Congress Must Do
The president can change some tariffs, but only Congress can change or end the federal income tax. That means any real plan to remove income tax would need new laws passed by both the House of Representatives and the Senate. So far, there is no detailed law or full budget plan on this idea.

What It Means Right Now
For now, Trump’s comments are a proposal, not a change in the law. People and businesses still have to pay federal income tax under the current rules. The debate over using tariffs instead of income taxes is likely to continue among lawmakers, experts, and voters.
News
Epstein Files to Be Declassified After Trump Order

Former President Donald Trump has signed an executive order directing federal agencies to declassify all government files related to Jeffrey Epstein, the disgraced financier whose death in 2019 continues to fuel controversy and speculation.
The order, signed Wednesday at Trump’s Mar-a-Lago estate, instructs the FBI, Department of Justice, and intelligence agencies to release documents detailing Epstein’s network, finances, and alleged connections to high-profile figures. Trump described the move as “a step toward transparency and public trust,” promising that no names would be shielded from scrutiny.
“This information belongs to the American people,” Trump said in a televised statement. “For too long, powerful interests have tried to bury the truth. That ends now.”
U.S. intelligence officials confirmed that preparations for the release are already underway. According to sources familiar with the process, the first batch of documents is expected to be made public within the next 30 days, with additional releases scheduled over several months.
Reactions poured in across the political spectrum. Supporters praised the decision as a bold act of accountability, while critics alleged it was politically motivated, timed to draw attention during a volatile election season. Civil rights advocates, meanwhile, emphasized caution, warning that some records could expose private victims or ongoing legal matters.
The Epstein case, which implicated figures in politics, business, and entertainment, remains one of the most talked-about scandals of the past decade. Epstein’s connections to influential individuals—including politicians, royals, and executives—have long sparked speculation about the extent of his operations and who may have been involved.

Former federal prosecutor Lauren Fields said the release could mark a turning point in public discourse surrounding government transparency. “Regardless of political stance, this declassification has the potential to reshape how Americans view power and accountability,” Fields noted.
Officials say redactions may still occur to protect sensitive intelligence or personal information, but the intent is a near-complete disclosure. For years, critics of the government’s handling of Epstein’s case have accused agencies of concealing evidence or shielding elites from exposure. Trump’s order promises to change that narrative.
As anticipation builds, journalists, legal analysts, and online commentators are preparing for what could be one of the most consequential information releases in recent history.
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