The Rise, Fall & Reset of The Fintech Industry

The a16z Show

a16z

Entrepreneurship, Culture, Disruption, Innovation, Science, Software Eating The World, Business, Technology

4.2 • 1.2K Ratings

🗓️ 19 December 2025

⏱️ 45 minutes

🔗️ Recording | iTunes | RSS

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Summary

Fintech went from a full-blown surge to a near standstill in just two years. At its peak, about 25 percent of all venture dollars were pouring into the category. By late 2022, that number had collapsed to almost zero. In this conversation, a16z General Partner David Haber and Plaid cofounder and CEO Zach Perret unpack what actually happened during that cycle and why the market is heating up again. We explore how the industry moved from the explosive growth of 2020 and 2021 into a deep freeze, and why we are now seeing real momentum return. We also dig into the forces reshaping fintech today: AI’s outsized impact on fraud and underwriting, incumbents finally embracing external software, the renewed importance of deposits, and the rise of embedded finance across entirely new categories. Zach shares how Plaid has navigated these shifts, what the company is building now, and how he sees the next phase of fintech taking shape.

Transcript

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0:00.0	2018, 2019 in FinTech was late spring.
0:04.2	You get into 2020 and COVID, and that was utter insanity of a story.
0:09.7	Like 25% of all venture dollars in that period went into FinTech, Richard.
0:12.7	Wow, 25%.
0:13.7	The stat after that is not a good stat, which is starting in like the second half of 2022,
0:18.2	like basically zero percent of venture dollars went into FedEx.
0:20.7	That's the drought maybe. Yeah, yeah. FinTech winter was the second half of 2022, like basically zero percent of venture dollars. That's the drought maybe. Yeah, yeah. FinTech winter was the second half of 2022. Most of 23 and 24 things started to thaw a little bit. And like now we're very much back in the spring. It turns out the biggest use case for AI is fraudsters committing fraud against financial services companies. Financial fraud is growing at like 18 to 20% a year,
0:38.4	which is insane. And it's already a huge market. I mean, the cattle win long term, but the mouse is
0:43.6	winning right now. At the peak of the boom, roughly 25% of all venture dollars were flowing
0:49.5	into fintech. Two years later, that number was close to zero. Today, with A16Z general partner David Haber and Zach Perrae, co-founder and CEO of Plaid,
0:59.1	we trace what happened between those extremes and why the market is heating up again.
1:02.9	We look back at how the industry moved through its boom and bus cycle,
1:05.9	from the explosive growth of 2020 and 2021 to the freeze that followed,
1:09.9	and where things stand now as activity returns.
1:12.7	We dig into the biggest forces shaping FinTech today. A.I's impact on fraud and underwriting,
1:17.8	the shift towards deposits and full-sac financial products, incumbents finally adopting outside
1:22.5	software and embedded finance showing up far beyond traditional banking.
1:29.0	Zach, David, we did this podcast, I believe seven years ago,
1:33.1	and it's great to have the gang back together. Thanks for joining.
1:36.0	Thank you for having us. Great to be here.
1:37.6	Of course, a lot has happened since the last conversation in our personal lives.
1:40.9	And a lot has happened in FinTech more broadly.
	...

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