2024 Canapi Alliance Summit Retrospective

VIEWS FROM THE TOP

This past April, Canapi Ventures hosted its third in-person Canapi Alliance Summit, drawing over 150 innovators, creators, and pioneers to Manhatta in New York City for a day rich with meaningful connections and valuable insights.

During the event, we explored the current dynamics of the private markets, defined our strategic priorities for the coming years, and offered comprehensive updates on our funds and team. What truly resonated, however, were the engaging and thought-provoking discussions across various panels and presentations, coupled with the insightful interactions we enjoyed with our LPs and portfolio companies.

The day was a testament to the collaborative power of the Canapi Alliance, and we are excited to share several takeaways gleaned from the summit.

KEY TAKEAWAYS

THE OPPORTUNITY FOR CANAPI OVER THE NEXT FIVE YEARS IS AS EXCITING AS IT HAS EVER BEEN.  

Now is an exciting time to be investing. We remain in the early stages of a transformative fintech and banking evolution, with the global fintech industry projected to grow sixfold to $1.5 trillion in six years, and the U.S. expected to capture one-third of that growth. Our focus areas, B2B and B2B2C, are the fastest-growing segments, poised for 11x and 7.5x growth respectively by 2030.[1]

On top of that, the market slowdown and correction of the last 18-24 months has created a healthier environment for new capital deployment. The “growth at all costs” mindset has shifted to a focus on capital efficiency and healthy unit economics, a wave of new founders are leaving mature tech companies to start new companies, and, while valuations remain high historically over a 10-year lookback (especially at the early stage),valuations are down significantly from 2021 peaks at growth stage.

And of course, you can’t host a venture summit today without mentioning generative AI. In the years ahead, we will enter a new era of productivity. While bank adoption may initially lag other sectors, it will gradually scale (and then suddenly). On the other side of the Alliance, there is a huge opportunity for startups to do more with less and increase margins over time, something we’re already starting to see with a number of portfolio companies.

We are fortunate to have healthy reserves to double-down on the most promising portfolio companies and significant dry powder in Fund II to capture the best opportunities across stages. However, the rest of the industry is also sitting on significant dry powder – over $300 billion and at an all-time high.[2] In this environment Canapi’s differentiation and specialization is increasingly important to win the best deals.

OUR PORTFOLIO COMPANIES ARE UNIQUELY POSITIONED TO LEAN ON EACH OTHER.

As part of this year’s programming, we brought together over 40 founders, CEOs, and go-to-market leaders from our portfolio companies to exchange lessons learned.

The most important realization that emerged from these interactions was clear: our portfolio companies can—and should—lean on one another. The Canapi model provides a unique advantage because nearly all our companies have the same primary customer base: financial institutions. This shared focus has created a network rich in experience, expertise, and scars earned from the complexities of selling to banks. This collective wisdom is a powerful resource for any founder looking to expand their reach.

Beyond this network of peers, Canapi Ventures stands ready to provide direct support to each portfolio company. Our carefully assembled team offers comprehensive assistance in go-to-market strategies, business development, talent management, regulatory compliance, and fundraising. Having been entrepreneurs ourselves, we understand the value of adaptability and are ready to meet portfolio companies wherever they need us.

As we continue to grow this community of innovators, we encourage our founders to tap into this wealth of shared knowledge and embrace the collective strength that comes with being part of the Canapi network. Together, we’re stronger, more resilient, and capable of reaching new heights.

COMPLIANCE AND REGULATION WILL CONTINUE TO SHAPE THE FUTURE OF BANKING AND FINTECH.

The message was clear throughout several panel discussions that featured representatives from portfolio companies, pipeline companies, and bank representatives – compliance and regulation will undoubtedly continue to shape the future of banking and fintech. During our discussions, three pivotal areas emerged:

• Responsible AI Adoption. As artificial intelligence becomes increasingly integrated into financial systems, responsible adoption will be crucial. Financial institutions must embrace AI technologies while adhering to ethical standards and emerging regulatory expectations and requirements.
• Enhancing KYC and Combatting Fraud. In the evolving battle against identity theft and fraud, particularly as malicious actors increasingly harness AI, the response goes beyond simply deploying more AI. Discussions highlighted a significant trend: a shift towards a holistic approach to fraud prevention and mitigation. This approach integrates behavioral analytics, biometrics, and third-party predictive models that utilize machine learning.
• Prioritizing Cybersecurity. Cybersecurity remains a top priority. As cyber threats grow in complexity, financial institutions need robust strategies to safeguard sensitive data. Investing in advanced cybersecurity solutions will be vital to protecting against breaches, ransomware, and other malicious attacks that could undermine customer confidence.

THINKING OUTSIDE THE BOX MAY MEAN THINKING OUTSIDE OF FINANCIAL SERVICES.

During the summit's breakout presentations, a fascinating topic emerged: thinking beyond the conventional limits of financial services opens up immense opportunities, particularly in healthcare. The conversations around this theme resonated deeply, underscoring the potential impact on both our financial institution partners and portfolio companies.

The current healthcare system is fractured, struggling with a loss of trust. However, this challenge creates an opportunity for healthcare organizations to collaborate with financial institutions. Banks and healthcare organizations share a wealth of overlapping insights. Most of our limited partners are already deeply involved in the healthcare industry, whether through advanced payments for providers, treasury management, revenue cycle management, or financial tools for health spending like HSAs and supplemental benefits. By leveraging the services and expertise of financial institutions, healthcare organizations stand to drive their own transformative, technological change and rebuild trust in their sector.

This collaboration isn’t a one-way street; financial institutions stand to gain as well. By partnering with healthcare organizations, they can uncover new technologies that can be offered to existing healthcare clients and employees while also exploring opportunities to expand into new markets and identify acquisition targets that complement current business lines.

Ultimately, partnership between healthcare organizations and financial institutions enhances essential services to the communities both already serve, ensuring a mutually beneficial partnership.

WE CAN'T READ MINDS, BUT WE KNOW SOMEONE WHO CAN.

While we don't claim to be clairvoyant (though our portfolio companies might), our keynote speaker certainly is. Oz Pearlman, one of the busiest and most celebrated mentalists in the country, left the entire Summit in awe.

After witnessing Oz’s remarkable ability to read the minds of our attendees, we're tempted to recruit him for Fund II sourcing and due diligence. If he can predict tomorrow’s winners as accurately as he guessed our first crushes, we just might be on to something!

LOOKING AHEAD

The Canapi Alliance Summit is always a powerful reminder of the strength and effectiveness of our network. The collaborative spirit and knowledge-sharing we witnessed reaffirmed that together, we can overcome challenges and seize opportunities across the banking and fintech industries, and beyond.

With that said, we don't need to wait for the next Summit to continue this momentum. Let’s continue to spend time together and lean on each other to surface solutions to pain points, share helpful lessons from across the Alliance, and share our collective wisdom.

To those who joined us at the 2024 Canapi Alliance Summit, thank you for taking the time to spend a day with us. It was wonderful to spend time with you in New York, and your continued support and participation is immensely appreciated. For those who couldn't make it, we look forward to connecting in the coming months and hope you can attend our next Summit. Together, let's continue to build on the energy and inspiration from this event and harness the full potential of the Canapi Alliance!

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[1]Boston Consulting Group. “Reimagining the Future of Finance”. May 2023.

[2]Pitchbook-NVCA Venture Monitor

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