Born Multi-Product; Wells Fargo’s strategy map; How to get started with BaaS - Five key things to look for in a BaaS provider;
In this week’s Fintech Wrap Up, we dive into the rise of multi-product strategies in SaaS, Wells Fargo’s fintech partnerships driving innovation, and the latest surge in global crypto activity
Insights & Reports:
1️⃣ Born Multi-Product
2️⃣ Wells Fargo’s strategy map
3️⃣ Payment Orchestration Platforms in Europe
4️⃣ The Days of Easy Growth Are Over For Payment Companies
5️⃣ How to get started with BaaS - Five key things to look for in a BaaS provider
6️⃣ Mobile-first integrated distribution strategy for Retail Banks
7️⃣ State of Crypto Report 2024: New data on swing states, stablecoins, AI, builder energy, and more
8️⃣ Crypto banking services 2024
9️⃣ Robinhood launches desktop platform, adds futures and index options trading to app
TL;DR:
Hey everyone, welcome back to this week’s edition of Fintech Wrap Up! We've got some exciting insights and updates in the world of fintech, payments, and banking, so let's dive right in.
First up, we explore the multi-product strategy, which is becoming the holy grail for software businesses, especially in vertical SaaS. By expanding product offerings to existing customers, businesses can boost their ARPU and TAM, helping scale faster and more efficiently. This approach is particularly useful as companies navigate the delicate balance between prioritizing ARPU growth versus expanding to new locations.
Wells Fargo has been busy partnering with fintech startups to enhance their offerings, especially in business banking, wealth management, and payments. From AI-driven fraud prevention to cross-border payments and virtual cards, they’re building an impressive fintech ecosystem that’s worth keeping an eye on.
Payment orchestration platforms are also making waves in Europe, helping merchants optimize their payment flows and reduce fees by connecting to multiple payment processors. This is crucial for handling different markets and ensuring operational resilience.
But it’s not all smooth sailing in the payment world. The days of easy growth are over, with a significant slowdown expected in North America and Europe, while Latin America and Asia-Pacific are still showing strong potential for growth. This shift is prompting payment companies to rethink their strategies as the market matures.
On the crypto front, activity hit an all-time high with over 220 million active addresses, primarily driven by Solana and emerging platforms like Coinbase’s Base. And let’s not forget the global rise of mobile crypto wallets, especially in regions like Nigeria and Argentina, where crypto adoption is thriving.
In other news, Klarna is offloading its UK BNPL portfolio, freeing up billions for future growth, while Monzo celebrates hitting 500,000 business customers with the launch of its new transparent blue expense cards. Meanwhile, Robinhood expands its desktop platform with new features aimed at attracting serious traders.
That’s it for this edition—thanks for reading, and I’ll see you in the next one!
Insights
Born Multi-Product
Multi-Product is the holy grail for software businesses. Acquiring customers is usually one of the most expensive aspects of building any software company. Selling multiple products to the same customer allows you to amortize that sales and marketing expense, expanding ARPU and TAM.
Vertical SaaS vendors (VSVs) are inherently multi-product. Their merchant customers want a single point of accountability; by leveraging a control point.
When: ARPU vs. Locations?
The two levers of growth for a VSV are locations and ARPU. Most companies are limited in resources, and opportunity cost is real—so when should you prioritize multi-product/ARPU growth over locations? All situations are unique, but two concepts tend to drive the answer: control points and TAM. If you are confident you are focusing on the right control point and you have sufficient GTM economics, always default to prioritizing locations. If you truly occupy the control point, you can sell other solutions later. Keep scaling locations until you see a horizon where location growth will decelerate.
At some point in your company's journey, you start hitting the ceiling of the location count in your geography, and growth slows. As you saturate your ideal customer segments, you will start to see increases in CAC and close times. Before that happens—ideally a couple of years before—you should consider expanding your geography or segment. Expanding tends to be high-risk and requires a significant investment, so you want to give yourself a couple of years to get it right before your core location growth slows.
As you undergo a location penetration-rate analysis, there are three things you need to do:
Obtain 3rd-party data: Buy directory lists from industry associations and census data to obtain an idea of the market size. Then, integrate third-party data with your own internal CRM data. The combination can provide more accuracy and an incredibly rich understanding of your ICP, TAM, and segment numbers and characteristics.
Look hard at segments: Don’t fall in love with the big TAM vanity numbers from your investor deck. Make sure your immediate TAM covers the segments where you have a strong right to win. Beware the temptation of expanding your TAM past the point of a reasonable customer profile fit
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