Monzo

Overview

Monzo is a startup that styles itself as the bank of the future.  They are building modern retail banking services  with the smartphone as your hub with all the features people constantly wonder why their traditional bank doesn't already include.  Initial features on launch include instantaneous money transfers, current accounts, zero charges when spending abroad, automatic bill splitting, easy spending tracking, and initial alerts on unusual activity or higher than average bills.  Unlike most FinTech startups who (such as Simple.com) partner with a bank, Monzo has gone all in and is a fully licensed bank in its own right.

The 100+ member team is based in London, England and the company was launched in February 2015.

Why I like Them

Most of all I like their ambition.  The retail banking industry has existed in its current form for more than 50 years - I am extremely excited to see a team reinventing banking around technology from the ground up, something that is long overdue.  

This ambition and innovation is revealed with their implementation of what they call "smart" banking features - software that automatically optimizes on behalf of their customer.  Customer accounts will automatically switch your bank services to the best deal - including with savings accounts.  Other examples of "smart" banking features include automatically budgeting for their customers and telling them what they are overspending on.  These features are noticeable differentiators and potentially future moats, only possible because the company is writing all its bank infrastructure software from scratch.  I am extremely curious see what upcoming smart banking features look like.

I also like their rapid growth.  Monzo unashamedly knows and goes after mobile first millennials as its customers and this targeted customer base has responded in the first 6 months with 400,000 initial customers, a 25,000 person waiting list, and a cult like following.  

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.

Trucker Path

Overview

Trucker Path is a software company building out a suite of offerings for the trucking industry.  It offers three product lines targeting long haul truckers.  Its initial product was a navigational and trip planning app called Trucker Path.  More recently it added a freight hauling marketplace platform called Truckloads, and InstaPay which is a factoring service.  The company monetizes via a premium version of the app along with its factoring services offered via its Truckloads platform.

The company is based in Mountain View, California and has ~60 employees.  Its founder is Ivan Tsybaev, a serial entrepreneur.

Why I like Them

Although I don't usually like app companies, Trucker Path caught my attention because what started as a basic navigation app for truckers has been able to transform itself into a full platform and freight logistics marketplace for goods shipped via truck. Trucking is a slow moving, fragmented industry and the team was clever to get their app and brand known by first offering targeted navigation features to the professional long haul trucker customer.  By all reports truckers are delighted by the app with an average of 4.7 out of 5 stars and 35,000 user reviews.  Trucker Path leveraged this satisfied user base to solve the chicken and egg problem in building a freight marketplace. 

This smart progression in product offerings has rewarded the team with extremely strong traction as they have 600,000 truckers using the navigation app.  Their freight marketplace Truckloads, has over 100,000 carriers searching through over 3 million monthly loads posted by 800+ freight companies.  The biggest opportunity lies with their freight marketplace and factoring business since trucking in the US alone is a $700B+ industry.  There is an open field here to automate the currently inefficient trucking marketplace as can be seen by the recent news that competitor Convoy has recently raised a large sum of money.

Technology like Trucker Path's offering serves as an intermediary step between human based trucking and fully autonomous self driving trucks.  Most importantly they have data that is invaluable to an autonomous trucking fleet operator.  As their head of marketing, Sam Bokher, describes it - "We have the most comprehensive data on trucking-related points of interest, truck parking data – this data have been crowdsourced from our users, so no one else in the industry has such information. In addition to that we have information about where the freight is going and what the current rates are."  It is easy to see how their products could plug right into the technology stack of companies building fully autonomous trucks (Uber, Tesla, etc.).

I also had a chance to ask the team about their thoughts on fully autonomous trucking.  They don't see it being real for at least another 10 years and see the regulatory framework as not even close to where it would need to be to support fully autonomous trucking networks.

Trucker Path has strong prospects with the growth opportunity of their trucking freight marketplace business along with the value of their proprietary mapping and trucking related data trove.

Disclosure:  I have spoken to members of the executive team.

Navigation App

Motif

Overview

Motif is a FinTech startup creating a new type of investing platform.  You can think of them as a merger between social networks and traditional online brokerages such as eTrade.  Unlike a traditional brokerage account where you buy individual stocks or ETFs, customers invest in portfolios built around themes or concepts called motifs.  These "motif" portfolios are auto-weighted baskets of up to 30 stocks or ETFs.  Examples include aging population, robotics, pets, mobile devices, infrastructure rebuild, online gambling, national defense, and more that can be seen here.  Customers can invest in hundreds of existing motifs or construct their own.  When others invest in their motif customers receive a commission.  The company also offers limited early access of IPOs to retail investors.  Customers can either pay per trade or enroll in a monthly subscription plan for unlimited trades.

The company was started in June 2010 and is based in San Mateo, California.

Why I like Them

I like the creativity and innovation in their product offerings as they make investing fun for people with otherwise no interest in finance.  By all account the ability to invest thematically and around concepts is much more understandable and even seen as fun by average consumers.  There is also a strong social aspect to using motif's product with an active community formed around each motif.  I especially like the commission feature earned by motif creators when others invest in their concept.

There is no hiding the fact however that they are in a fiercely competitive industry with a host of large players.  It remains an open question on how easily copied the ideas and communities behind motifs are if the company truly starts to break out.  

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.

Tala

Overview

Tala is a fintech startup using mobile devices in emerging market countries to generate credit scores and grant micro-financing to those who don't have traditional access to banks.  They use more than 10,000 data points (not a typo) from a user's mobile phone behavior to generate credit scores in emerging markets.  With this credit score users are able to get instant short term loans in 5 minutes underwritten by Tala, all from their mobile device.  The company then tracks customer repayment over time and can offer better interest rates and more generous loans to users that show good financial behavior.  They report they are highly profitable.

Tala launched initially in Kenya with its HQ in Santa Monica, California.  Its product offering is available in Africa, Southeast Asia, and India at this time.

Why I like Them

This is the most innovative product I've seen in FinTech in a very long time (enough to get me over my instinctive app company skepticism).  The algorithmic ability to instantly generate a credit score from someone's mobile phone data is light years ahead of the standard FICO score model and a brilliant idea all on its own.  By all reports their credit models are far more indicative of someone's financial behavior than traditional FICO score models which are not nuanced enough and uses few data points.  It makes sense since in today's world nothing knows you as well as the mobile device that you engage with constantly.  The obvious question is why traditional banks aren't doing more here as it would help them control their risk pools much better.

Beyond there is a huge untapped market here.  There are an estimated 2 billion people on the planet that do not have a credit score or any sort of financial identity but would leap at the chance for micro loans.  Tala is brilliant to offer this product in emerging markets only for now - they know exactly who and where their customers are.  More than 90% of first time customers fully repay loans with 95% coming back for additional loans after they repay the first.  It is easy to see how this creative approach could become dominant even in the developed world since it gives a much more nuanced and detailed financial profile of a potential borrower.  

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.