The Fintech Comeback: Sheel Mohnot on Why 'Everything is Fintech' and What's Getting Funded in 2025

Fintech Investment Landscape & Comeback

• 💡 Early-stage funding is recovering after a challenging 2022-2023, focusing on practical problems, infrastructure, embedded finance, and AI applications.
• 📈 Better Tomorrow Ventures (BTV) experienced its best-ever quarters in Q1 and Q2 of the current year, indicating a strong market rebound.
• 🔑 The "everything is fintech" trend sees vertical SaaS companies like Toast generating significant revenue from payments and financial services, not just software subscriptions.

BTV's Investment Strategy

• 🎯 BTV, co-founded by Sheel Mohnot, is a pre-seed and seed fund with $300 million across three funds, writing checks from $0.5 million to $3.5 million.
• 🧠 The team comprises founder-operators, providing unique credibility and guidance to early-stage fintech companies.
• ✅ Investments typically target companies with a few founders, an idea, and initial prototyping, with BTV always leading or co-leading the first check.

Key Portfolio Themes

• 💳 Spend management and banking for various niches, including fleet management (Coast), large enterprises (Mendle), and SMBs (Relay, Portauce).
• 🔗 Embedded finance solutions like Unit (banking), Salsa (payroll), and Layer (accounting) empower vertical SaaS platforms to integrate financial services.
• 🤖 AI-driven solutions are transforming accounting and workflows, with companies like Basis, Layer, and Inscope automating tasks for firms and businesses.

Attributes of Successful Founders

• 🚀 Successful founders demonstrate an ability to iterate fast, constantly engaging with customers and refining their products.
• 💪 Tenacity and resilience are crucial, enabling companies to break through challenges and achieve profitability, even after significant burn rates.
• 💡 Second-time founders often bring valuable lessons and a focused mindset, though some may struggle with adapting to early-stage capital constraints.

Investor Evolution & Future Outlook

• 🔍 Mohnot emphasizes the importance of thorough reference checks on founders and strategic deployment of follow-on capital, concentrating on winners.
• 🌍 While primarily focused on the United States, BTV also invests in markets like LAM (Brazil, Mexico), prioritizing strong ideas and founders over specific geographies.
• 🌱 The focus remains on backing tenacious founders who can execute quickly, regardless of the specific fintech vertical.