Andreessen Horowitz, the venture capital firm, is expanding its fintech investments, hiring an executive from Credit Karma to scout for startups.
Earlier this month the VC tapped Anish Acharya, the vice president of product at Credit Karma to become its newest general partner. Credit Karma is a personal finance website that aggregates financial products for consumers whether its auto loans or credit card APRs.
“Anish spent the last four years as VP Product at Credit Karma and has mapped out fintech with a level of precision that blew us away,” wrote Andresseen Horowitz General Partner Alex Rampell, in a blog post announcing Acharya’s appointment. It doesn't hurt that Acharya is a two-time entrepreneur. His most recent company Snowball sold to Credit Karma and an earlier enterprise SocialDeck was acquired by Google.
“As an entrepreneur who spent many years building consumer products, Anish realized that increasingly, the biggest improvements to people’s lives could be delivered by helping them with money,” wrote Rampell, noting he was intrigued by his “unique insights into what consumers are looking for” and his knowledge about the challenges the incumbents are facing. Through him, the venture capitalist firm will be able to identify business opportunities and make bets on the companies that can withstand an inevitable shakeout.
The appointment of Acharya not only signals Andresseen Horowitz interest in fintech is on the rise, but that it wants to make bets on the consumer side of the market. While those are riskier, consumers can be fickle, there’s an opportunity for a big payoff. It was only a few years ago that SoFi was a scrappy online lender. Today it has a valuation of more than $4 billion.
“Once upon a time, ‘fintech’ meant selling ‘tech’ to ‘fins’ – large banks and financial institutions. Now, it means going full stack and building fundamentally better experiences in everything from real estate to investment management to lending to insurance,” Rampell said in the blog. “The number of fintech opportunities is exploding, We think the best opportunities aren’t just buying public company stocks, but backing amazing entrepreneurs.”
The fintech market has been on fire as well-funded startups try to disrupt every aspect of financial services. They already made an impact in banking, lending and investing, with much more expected to come. So much so that Rampell said in an interview with CNBC about Acharya’s hire that major components of the S&P 500 will be “remade” by financial technology startups. He argued the biggest consumer opportunities are with those companies that are trying to improve financial access.
Andreessen Horowitz is no stranger to the fintech sector. An investor in Facebook, Instagram and Pinterest it has been expanding its exposure in the area. Its has an investment in Affirm, the startup that lets you purchase items online on credit and a fund focused on cryptocurrency. Rampell said the firm had no plans as of now to roll out a fintech focused fund.
“Fintech is becoming a key part of the monetization strategy for more and more companies,” Rampell, said in the CNBC interview. “There are more fintech companies showing up at our door — we wanted more expertise around the table there.”