Intro: [00:00:00] Broadcasting live from the Georgia World Congress Center for Fintech South 2022, it’s time for Atlanta Business Radio. Brought to you by Atlanta Blockchain Center. Now, here’s your host.

Lee Kantor: [00:00:28] Lee Kantor here broadcasting live at the 2022 Fintech South Conference. I’m so excited to have with me right now two folks from TAG Fintech Society, Glen Sarvady and Don Campbell. Welcome.

Glen Sarvady: [00:00:42] Thanks for taking the time to talk to us.

Don Campbell: [00:00:43] Yes, thank you.

Lee Kantor: [00:00:44] Well, I know you just released your report, the TAG report 2022, Georgia FinTech Ecosystem Report. Tell us some of the key learnings. What’d you learn?

Don Campbell: [00:00:53] Well, this has been a labor of love for Glen and I for probably the last 10 or 12 years. We used to do one every two years. And now we’ve kind of updated it more on an annual basis. And the reason for that is the data about the ecosystem is changing so dynamically that we really kind of need to keep our fingers on the pulse of what’s going on.

Don Campbell: [00:01:16] Today, there’s over 210 Fintech companies that are either based in Georgia or have a large presence here in Georgia. And when we look at that presence, there’s over 42,000 employees that call themselves Fintechers. And so, our job is to kind of monitor what’s going on. Take a look at the recent trends and report on them.

Glen Sarvady: [00:01:42] And I’ll take that a step further. I mean, if you go back to when we started this, I believe our count of companies was in about the 75 range.

Don Campbell: [00:01:48] Correct.

Lee Kantor: [00:01:49] And when was that when you started counting?

Glen Sarvady: [00:01:51] I’m trying to recall, it’s 2010, maybe.

Don Campbell: [00:01:53] 2010.

Glen Sarvady: [00:01:53] Yes. And, you know, the thing is, I think two things have either, one, the ecosystem has just exploded here dramatically, and we’ve always had that strong foundation. But I think the, you know, the periphery in terms of outside those, kind of, key companies that have always been here as the foundation just continues to grow, which is wonderful. But there’s a lot of companies that were hiding in plain sight that just as we became, you know, more visible. This is a crowdsourced initiative. There’s no official source that we’re trying to make it as official as possible on what we do. But we’re trying to make sure that these companies get the attention they deserve.

Glen Sarvady: [00:02:25] And as Don mentioned, you know, we turned it into an annual thing. This literally just came off the presses on Monday. We already know of two more companies that we’ve added to the list. So, we’ve got an ongoing updated version on our georgiafintech.org side as well and encourage people to go there. And you can download the full report there, too.

Lee Kantor: [00:02:42] Now, you mentioned 210-ish firms that are, you know, in the fintech space. How has the pandemic, was that a dramatic shift? Did it go up dramatically from last year or the year before to now, or was it gradual?

Don Campbell: [00:02:58] It was probably gradual but somewhat exponential. If we go back into the history of the Fintech community here, it goes back to actually 1987 when the local government passed a law that enabled payment processors to come into Georgia and gain financial benefits from that. So, as Glen said, we had about — in 2010, we had about 75. And all of a sudden that began to ramp up as Fintech began to broaden out in terms of its scope. So, it may have started with payments, but then expanded into lending, into security software, identity software, and the like. So, that broadened the perspective a lot.

Glen Sarvady: [00:03:44] And you know, to the point about the number of companies, I wouldn’t say that the — I’d say the growth and the number of companies has been gradual. The activity within those companies probably was more exponential driven by the pandemic. Perfect example of that came yesterday. The Hall of Fame, the — our TAG FinTech Hall of Fame recipients, Kabbage, Kathryn Petralia and Rob Frohwein, talked about the fact that they provide small business funding. They’re now owned by American Express. They were bought toward the end of the pandemic, I shouldn’t say the end, but the latter stages of 2020.

Glen Sarvady: [00:04:15] But in the course of the pandemic, because they were in a position to really facilitate the PPP loans and helping get the funding out to small businesses, they extended as much funding in about a six-month period as they had in the prior five years or seven years combined. That just gives you a sense of the exponential growth that happened because of the pandemic and the need for this kind of service in the space.

Lee Kantor: [00:04:37] Now, are you seeing the, you know, larger firms, kind of — some of the executives spinning off their own firms? And you’re seeing kind of a cluster organically grow around, you know, kind of the — these larger entities and, you know, kind of spinning off this smaller startup?

Don Campbell: [00:04:55] Exactly. If you look at the large ones that, like, at First Data or a Thesis or Global Payments, all these companies recently have merged. Fiserv have acquired First Data. FIS acquired Worldpay, Thesis and Global Payments merged. And there was a, kind of, spin-out activity as executives or people within the organization simply had bright ideas, saw opportunities and invested either on a bootstrapping basis or went for outside capital to start making that happen.

Lee Kantor: [00:05:29] But they’re still staying in Georgia?

Glen Sarvady: [00:05:30] Yes.

Don Campbell: [00:05:30] Yes, yes.

Glen Sarvady: [00:05:31] Another great example, not to keep plugging Rob Frohwein at Kabbage, but Rob and Kathryn just started their new company, and they just kind of made themselves a little bit more publicly visible. Company called Keep Financial Technologies that deals with employee retention. They raised their first seed round from Andreessen Horowitz Capital. And their new fund — their new business, their partner began with this one is again based in Georgia.

Glen Sarvady: [00:05:53] There’s lots of examples like that. I can think of Greenlight. Fiserv, one of their two principals. Tim Sheehan was based out of Atlanta with Fiserv before he — that’s where he got the idea.

Don Campbell: [00:06:06] If we go back about five years, the ecosystem was growing very organically via these very large companies. And when we looked at where the activity was happening in the Fintech industry, a lot of people would say, well, it’s in San Francisco or it’s in New York or it’s in Boston or some other place. And we’ve been pushing, Glen and I have been personally pushing for a long time that this is somewhat of the epicenter of innovation, because a lot of those innovations have occurred there.

Don Campbell: [00:06:38] But more importantly, this is a point that Glenn and I have made over the years, is that if you were a young startup company, let’s say you were out of Denver and you invented something and you wanted to bring it to market, the best place to bring it to market was here in Georgia or specifically Atlanta. Because these larger companies had the footprint, not only in a national but an international basis. And they could make these products kind of successful, somewhat, overnight as long as they adopted the — that technology.

Lee Kantor: [00:07:11] And I think that’s part of Georgia’s secret sauce, is that there are so many enterprise-level companies that are willing to collaborate with these startups and that it’s very collaborative. It’s not kind of this zero-sum game that it may be other markets, it’s more cutthroat.

Glen Sarvady: [00:07:27] Yes, I think that’s absolutely true. I think, you know, San Francisco and Silicon Valley would take credit for taking that similar approach. But kind of, as Don said, a lot of the companies, when people think about places like San Francisco, you’ve got Uber and Lyft and PayPal and folks like that because they market to the end consumer. So, many of the businesses here in Georgia tend to be — not necessarily be to be, but they’re working behind the scenes helping the existing financial infrastructure work better.

Glen Sarvady: [00:07:54] So, I think that’s one of the reasons. And, you know, that’s why Greenlight, which is one of the success stories recently here, they’ve partnered with other places. They’ve got funding from Truist, they’ve got funding from TTV Capital, which is also local here. But one of the reasons that they’re a little bit better known is because they actually have an outbound marketing campaign that advertises on TV.

Glen Sarvady: [00:08:13] You don’t hear about a lot of the other companies like Kabbage didn’t advertise on TV. A lot of the other ones that are pretty prominent in the space. People don’t spend a lot of time — I find it interesting that Fiserv, you know, is probably best known now because they’ve got the branding rights on the Fiserv forum with the Miami Bucks, which gave them some more visibility. But they’ve got relationships with pretty much every bank, the vast majority of banks in the U.S. But there’s no reason the end-user consumer needs to know that.

Lee Kantor: [00:08:36] Now, from a standpoint of trends are looking ahead, are you seeing the — just the growth of the Georgia scene spilling over to other cities in the Southeast? Are you seeing that, you know, kind of this rising tide is lifting all boats?

Don Campbell: [00:08:52] I think in general it is lifting all boats, although I think we’d continue to remain the epicenter in terms of funding and in terms of innovation. So, we’re seeing some activity in Charlotte. We’re seeing activity in, you know, different parts of Florida, so.

Glen Sarvady: [00:09:09] A little bit in Birmingham as well. But I mean, again, it’s a little like you said, there’s you know, it’s collaborative. There’s no reason for us to be in competition. There’s plenty of, you know, opportunity for the rising tide to lift all boats.

Lee Kantor: [00:09:21] Now, any trends that you’re seeing in the Fintech space that we should keep our eye on in the year to coming?

Don Campbell: [00:09:29] There are tons of trends. So, if you look at, you know, the concept of the ecosystem was originally based around payments. There are now probably, you know, fairly a deep dive into probably 10 or 12 verticals and horizontally going out beyond that. So, everything from, you know, buy now, pay later to where Glen, don’t you —

Glen Sarvady: [00:09:56] Well, the one that comes to my mind is Insurtech. If you think about, kind of, going outside the general payment space, we did a sidebar within this report. We took kind of a different approach this year. And we’ve got contributions from a variety of different subject matter experts in the periphery of, you know, the different areas of where we’ve kind of branched out.

Glen Sarvady: [00:10:13] There’s a great report on the Insurtech space, which is really growing rapidly. That’s where a lot of the technology — if you think about one of the most established long-term industries that still is running a relatively traditional basis. And I guess some would say ripe for disruption would be insurance. So, that’s where a lot of the technology, you know, kind of thought leadership is going right now.

Lee Kantor: [00:10:34] So, if somebody wants to get their hands on the report, what’s the best way to do that?

Don Campbell: [00:10:38] Well, if you’re here at the conference, there are printed copies here available. Otherwise, you go to the TAG website, which is tagonline.org. And then go to the Fintech Society and you’ll find the PDF versions there.

Glen Sarvady: [00:10:56] And I’ll give you a shortcut too, georgiafintech.org will get you, kind of, without having to, kind of, navigate all those pages. But please, do check out the rest of the TAG site as well. Not only is the actual PDF of the report there, but that’s where you’ll find our ongoing listing of the companies, both broken up publicly and privately, and all the transactions. We had over a billion dollars in funding transactions that have taken place over the course of the last year and a half. And we continually update that list as well.

Lee Kantor: [00:11:21] And there’s so much opportunity in this space. And especially exciting is that Georgia Fintech Academy, where it’s part of, now, the university system so that they can get more, I’m sure, because they’re hungry for employees, right? You’ve got to train your own.

Don Campbell: [00:11:37] Right. And that’s something that TAG has been working with the major corporations here in Atlanta and throughout Georgia. There are so many universities, a lot of them have a technical orientation. And the key thing that the technology side of Fintech needs are the people who can take the business ideas and put them into technology, otherwise known as simply coding.

Lee Kantor: [00:12:01] Right. So, it’s important to kind of grow our own, right? And to keep them here.

Don Campbell: [00:12:05] Yes.

Glen Sarvady: [00:12:05] And that’s another one of those places where I’d say, to some extent, the secret’s out about Georgia, because, I mean, you see more and more companies coming here specifically because of the initiatives like the technology that Georgia Fintech Academy. Because we have this robust and diverse talent base. I mean, Visa, Capital One, Cash App which is part of Square, have all announced that they’re moving more people here to take advantage of that robust talent base.

Don Campbell: [00:12:29] In addition to that, it’s key technology companies like Microsoft and Intel are moving in. And obviously, the technical side of Fintech needs all that infrastructure to work with.

Glen Sarvady: [00:12:42] And. Yes, exactly, correct. There’s no reason to limit ourselves to the true Fintech companies and the line blurs all the time. That people say that at some point Fintech will stop being a relevant term because it’ll just be part of everything.

Lee Kantor: [00:12:53] Right. Same with — it’s just like technology, right? Like at first there were technology companies, now everybody is a technology company.

Glen Sarvady: [00:13:00] Exactly.

Don Campbell: [00:13:00] Yes. And what they’re saying, too, in the marketplace is that all companies will become Fintech companies one way or another.

Lee Kantor: [00:13:07] Right.

Don Campbell: [00:13:08] Because they’ll use electronic payments to conduct their business.

Lee Kantor: [00:13:11] Well, Glen and Don, thank you so much for sharing your story today. You’re doing important work and we appreciate you.

Don Campbell: [00:13:16] Thanks so much.

Glen Sarvady: [00:13:17] Thanks for giving us the chance.

Lee Kantor: [00:13:18] All right. This is Lee Kantor. We’ll be back in a few at Fintech South 2022.

Outro: [00:13:30] This episode has been brought to you by Atlanta Blockchain Center. The catalyst for Atlanta’s emergence as the premier blockchain innovation hub globally, through cultivating entrepreneurship, inclusivity, and education. To learn more, go to atlblockchaincenter.com.