lightbank Investment Themes

Blog

Author:
Vic

Consistent with our heritage, lightbank will always focus on entrepreneurs first; not particular sectors. This approach is deeply rooted in our entrepreneurial DNA. Entrepreneurs will show us where the next innovation and market opportunities exist.

However, as a team we have deep networks, experience and expertise in in various sectors including fintech, consumer and software. Here are some general themes and opportunities we expect to explore in 2018.

Financial Services
Financial services is a trillion-dollar industry that affects all socio-economic classes, demographics and geographies. Regulatory fear, manual processes, dogged attachment to core products and legacy systems have prevented meaningful transformation or improvement in the industry. Consumers and businesses have grown disenchanted with their financial services providers and find less value in their products and experiences. Incumbents can be enabled or disinter mediated, due to the ubiquity of mobile, increase in computing power, proliferation of data/ analytic capabilities, lower costs of technology and demographic shift.

We like investment opportunities relevant to financial services in:
  • Regulatory Compliance: The automation of regulatory compliance and audit requirements for the OCC, SEC, FDIC, CFPB, etc. Including systems, risk products and risk management solutions.
  • Insurance: real product innovation as opposed to mere distribution, across all lines of insurance/ reinsurance for consumer, commercial, government and industrial sectors; innovation aimed at claims, underwriting, pricing, product development
  • Banking: lending (loans, credit cards, personal, commercial, mortgage), title insurance, deposit accounts, personal financial management 
  • Investment management: next generation automated digital investment advice
  • Securities: solutions for the evolution of trading and fund management 
  • Blockchain: smart contracts, asset tracking, value exchange, distributed systems for financial institution operations, tokenization of financial products and processes.

Software
Software can help businesses deal with the increasingly uncertain conditions facing the market. Whether it’s the growing macro threats like cyber terrorism, political unrest and/or a potential capital market corrections ahead, businesses have significant challenges that can be solved with software. This makes it all the more important to create solutions that can help businesses simplify their own operations, focus on their core competencies and better compete. 

Broadly speaking we like opportunities in software relevant to: 

  • Data-driven managed services: We’re seeing companies succeed in traditional highly operational service businesses (e.x. brokerages, agencies, etc.) that can now achieve unprecedented levels of efficiency through AI and/or can produce offerings that far outpace the manual ones available in the market leveraging insights from their customer data networks.  Data is the rocket fuel of these businesses and those that succeed have the opportunity to generate winner-take-most market outcomes. This is especially true in asset intensive industries that require high degrees of human capital expertise.
  • Bringing products closer to the customer: As consumer expectations have shifted toward near immediate delivery; supply chains have been pushed to the absolute brink. For retailers to survive, they need to rethink manufacturing, warehousing, distribution networks, freight logistics and even their brick and mortar retail presences. These industries represent trillions of dollars in aggregate value and all need to be vastly modernized to meet the supply chain demands of the modern consumer. Despite the enormity of these industries, they remain the least penetrated by modern technologies. With industry incumbents motivated to make changes or become irrelevant, this represents an incredible opportunity for founders and investors. 

Consumer and Internet Based Businesses
The overwhelming force in today’s economy is still the consumer. The consumers’ expectations on how they engage with brands and shop continues to evolve. On line consumer behaviors and needs have changed in nearly all demographics and geographies. The impact of Amazon on retail, logistics and commerce cannot be understated.

In the consumer markets, we continue to explore:

  • Next generation ecommerce models especially in those sectors that have not been meaningfully transformed by the internet 
  • Vertical marketplaces
  • Podcasting and media distribution 
  • “Anti-venture sectors” - real value in certain sectors that traditional venture firms miss, we always maintain our contrarian perspectives

These are merely parameters and guidelines. If you are working on something consistent with these perspectives, please reach out to us. It’s always best to come in on a referral from our network.Most importantly Brilliant, passionate entrepreneurs that are building game-changing enduring companies will always be the true drivers of where lightbank invests . If this describes you and your company, let us know regardless of the space you’re in!