VIEWS FROM THE TOP
This September Canapi Ventures hosted its second Canapi Alliance Summit. More than 150 people joined the Canapi team at Peak in New York City for a day of networking, presentations, panels, and reconnecting.
Beyond the pleasure of seeing familiar faces, this year’s Summit was an opportunity to recognize the progress Canapi and this community have made since we launched in 2019. The team has grown, with new investment and operations professionals and two new offices in New York City and Washington, DC opening later this year. Our portfolio and limited partner base have grown as well, with more than twenty-five companies across stages and hundreds of involved members of the ”Canapi Alliance” representing a diverse range of financial institutions from across the country.
The common thread powering all that growth has been this community: the combination of founders, operators, limited partners, and bank executives that collectively make up the Canapi Alliance. Since inception, our north star has been to empower the members of this Alliance to achieve their goals and to drive continued innovation in financial services. It was validating to see this in action at the Summit and we left with a few reflections we feel are worth sharing.
KEY TAKEAWAYS THERE’S A LOT WE CAN LEARN FROM OUR PEER INSTITUTIONS, BUT WE NEED THE RIGHT SPACES TO DO SO.
Across panels and breakout discussions, we were struck by the depth and candor of conversations taking place between peers: bank execs comparing notes on their innovation agendas, fraud stacks, and payments roadmaps; founders contrasting their approaches to bank onboarding, sharing how they’re handling the current macro environment, and trading tips on fundraising strategies.
The Summit was proof of something we’ve believed for a while: peers can get value from each other without necessarily “arming a competitor”. We recently launched “Canapi Communities”: small focus groups of 5-7 institutions that meet regularly to discuss issues of common interest. But we recognize there’s more to be done.
It is our hope that events like this – and the Canapi Alliance more broadly – will continue to provide opportunities that facilitate deeper peer collaboration going forward.
BANKS AND FINTECHS CAN INNOVATE FASTER BY AUGMENTING THE WAY THEY APPROACH PARTNERSHIP. Banks can’t expect early-stage fintechs to behave like established vendors and should rethink their onboarding and procurement processes with that in mind. Fintechs should recognize that banks are not like other customers; regulatory and cultural factors may force banks to move slower and require more. Go-to-market strategies and projections should adjust accordingly. Early-stage fintechs should view banks as design partners, and banks should view early-stage fintech partnerships as external R&D investments. While fintechs may not have every answer at the beginning – and banks may not know exactly what they want at every turn – the partnership model has unique benefits for both parties if approached collaboratively. A “quick no” is better than a “slow maybe.” Most startups are working against a ticking clock. Banks should be more disciplined about goal setting, defining POC objectives, and moving quickly to a yes/no decision. Fintechs should make partnering as easy as possible. “Easy wins” like strong documentation, easily-accessible audit logs, regular infosec certification, updated financials, and due diligence questionnaire responses can all expedite the partnership process and make fintechs stand out amongst peers. THERE’S A WORLD OUTSIDE FINTECH.
This year’s keynote speaker was Admiral James Stavridis, a retired United States Navy admiral, former NATO Supreme Allied Commander Europe, and current Vice Chair, Global Affairs at the Carlyle Group.
The Admiral gave an eye-opening overview of today’s geopolitical situation before moving into a wide-ranging Q&A that, among other fascinating topics, touched on the qualities inherent to great leaders. Admiral Stavridis pointed to three things that great leaders have in common: (1) reading deeply and widely; (2) developing a strong peer network; and (3) maintaining physical fitness.
Beyond the helpful leadership advice (more than a few of us left with renewed commitments to the gym), attendees were struck by the complexity of the considerations our leaders grapple with daily. There are many intricate geopolitical challenges in today’s world, not least of which include Russia/Ukraine, China/Taiwan, Iran, and the broader meta-conflict over the ideological direction the global order will take going forward.
But for all the uncertainty, it is clear there are very capable people thinking deeply about these issues day in and day out, and for that we are grateful. For our part, we are happy to stick with fintech!
When we launched Canapi, we had a vision of a platform that would be more than just a steward of LP capital or a source of start-up funding. We saw our role in this dynamic ecosystem as fertile ground on which the seeds of a more effective partnership model could flourish, one in which bank executives and fintech founders could find common cause, collaborate on gating issues, and be the forces for innovation the financial services industry clearly needs.
This year’s Summit felt like an affirmation of those goals. Though there is still much work to be done, new companies to invest in, and countless partnerships to forge, we came out of the Summit energized, eager to get back to work, and optimistic about the future of this industry.
To all those who joined us at the 2022 Canapi Alliance Summit – we are humbled by the trust you continue to put in us and appreciate you taking the time to spend a day with our team. For those who were unable to make it, we very much look forward to seeing you at the next one.