We are immensely pleased to announce Justin Overdorff is joining as a partner to help lead Lightspeed’s Fintech practice and plant the Lightspeed flag in New York City, where he is currently based.
We’ve known Justin for a long time and have always sought his perspective on all things financial technology related. He also happens to be a great person to grab a beer with after a long run. Justin’s passion and energy are hard to ignore and he is someone we always hoped would become part of the Lightspeed family.
With his background as both an angel investor and a top executive at Stripe and Yelp, Justin brings a unique combination of skills to founders. He specializes in taking on the big hairy problems no one else is willing to tackle. He has the rare ability to start with an idea, identify the right product market fit, and then come up with a winning go-to-market strategy.
We’ve heard repeatedly from founders that Justin is someone they can count on to provide critical feedback, while also rolling up his sleeves when asked. As a former founder and operator, I would have loved to have Justin in my corner.
When Justin joined Stripe six years ago, the business development team was in its infancy, with a broad mandate to seek out growth opportunities. He spent the next two years building out partnerships with companies like Amazon, Facebook, WooCommerce, and Xero. Justin led a small team that took Stripe Capital from an idea inside an internal memo to the initial product launch for a business that is now transforming the way Internet entrepreneurs fund their growth. In 2019 he changed roles to lead deals for Stripe’s M&A and investing function, seeking out strategic acquisitions and investments in early-stage technology companies.
Justin likes to dive deep into new areas of the business and get his hands dirty, even when the risk of failure is high. Whether a project turns out to be a grand slam or a zero, he gives his all to it. Few investors at this level have such a deep understanding of both products and the business potential of those products. He’s a unique life-cycle investor we are incredibly proud to bring on board.
Our Fintech philosophy
Justin’s key objective is to help us continue to build our rapidly expanding Fintech portfolio. Since Lightspeed’s founding 20 years ago, we’ve invested around $1 Billion in more than 30 global Fintech companies, including Affirm, Appzen, At-Bay, Balance, Blend, BlueVine, Brigit, Carta, Finix, Kikoff, Ladder, Mynd, OkCredit, Personetics, Roofstock, Synctera, and Zest AI.
Five overarching themes inform our investment thesis for Fintech:
1. Every business is now a Fintech business
This is one of our mantras. Managing payments is an essential part of the operations of nearly every type of technology-first enterprise, whether it’s healthcare, real estate, SaaS, or virtually any other sector you can name. Every business needs to adopt a modern way of managing its financial operations and every consumer is rethinking their relationship to and management of their money and wealth. The modern technology stack is evolving to one where finance and financial services are a “must-have.” We want to back founders that are maniacally focused on creating products and services that elegantly abstract away complexity for their customers.
2. Businesses need to operate in real time
Traditional people- and paper-oriented systems that have dominated the financial sector have built in latency. In the past that was actually considered a feature, because it allowed for better risk management. But the world has evolved to a real-time mentality. This is changing how businesses and consumers interact with the movement of information and of money. The oncoming redesign of financial money movement and market infrastructure is one of the biggest opportunities within Fintech.
3. Fintech is scaling globally
Emerging economies that lack long-established incumbents are an enormous greenfield opportunity for Fintech investment. Instead of having to build on top of legacy infrastructure, with its technical and system debt, startups in LATAM, Africa, Southeast Asia and other nascent markets have the opportunity to build something new from scratch. There’s a tremendous potential here for democratizing access to financial services and wealth creation.
4. B2B payments are overdue for disruption
Perhaps the least sexy yet the most important (and biggest) area of Fintech is business-to-business — in the US alone, $16 trillion worth of B2B payments transact annually and most of these transactions happen via bank rails (ACH) or paper checks. The modernization of B2B payments, combined with the innovations in fraud detection and programmable money, provides tailwinds for much needed innovation.
These exciting trends dovetail nicely into the CFO stack. Modern businesses cannot be managed by spreadsheets any more. Old Byzantine systems are rapidly being replaced by more nimble technology.
5. Tax management systems will be upended
How consumers and businesses deal with taxation is going to change dramatically over the next few years. Established players like Intuit TurboTax and Jackson Hewitt are ripe for disruption. We believe there are big opportunities for entrepreneurs to extract cost and increase efficiency throughout this process.
We “heart” Fintech nerds
It’s an exciting time to be a Fintech investor, in part because the field presents such unique challenges. Operating in a highly regulated industry such as financial services adds additional constraints to those faced by all entrepreneurs.
Justin and I feel a special affinity for ‘Fintech nerds’ who are trying to solve really difficult problems and doing so in creative ways. It’s why we have so much admiration for founders like Henry Ward and Max Levchin, who are driven by a clear mission to change the status quo in ways that benefit everyone.
I strongly believe that, given Justin’s background, experience, and unique blend of talents, he was always meant to be a VC at some point in his career. We feel fortunate he’s decided to join us at Lightspeed and represent the firm in New York City and in the Fintech community.
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