Looking at the current Fintech ecosystem reminds me of the beginning of the platform economy where there were a thousand projects coming out covering specific verticals.
Andrew Parker mapped the platform economy startups in an article in 2010, called “The Disaggregation of Craiglist”.
A lot has happened since then but there are patterns in the market that will repeat forever: the bundle and unbundle phenomenon, or what is the same, patterns of expansion and contraction, aggregation and disaggregation.
In 10 years just some of them survived taking a large part of the market. One of the reasons some of them disappeared was because they were a feature or a component that others integrated.
The question now is: which bank/s will take most of the pie in the coming years in the case of Fintech?
Ups. Maybe it’s not going to be a bank.
Fintech enabled marketplaces
“Amazon is taking the core components of banking and using them to best support its merchants and customers”
This quote represents perfectly the power of marketplaces in embedding banking and insurance in their value propositions, which is easier, faster and more convenient.
Some of them have invested in building their fintech products in-house, while others partner with third-party fintech startups to control and improve the user experience at lower initial costs.
It is clear that the fintech, financing and insurtech landscape is going to be less about banks and insurance companies and more about platforms or companies, in general, embedding financial and insurance solutions for their users.
If you are already developing a portfolio strategy be sure is coherent and avoid redundancies. This is going to help you deliver a stronger value proposition that can become your moat. If you want to dive deeper check this training.
Regenerative Economy
The regenerative economy is an economic system that seeks to regenerate, restore, renew, and revitalize the natural, social, and economic systems that it interacts with, rather than depleting or exploiting them. Unlike the traditional «linear» economy—where resources are extracted, used, and discarded—a regenerative economy focuses on creating closed-loop systems where waste is minimized, resources are continually reused, and ecosystems and communities are nurtured and strengthened.
It is based on the living system’s principles, characterized by complexity, self-organization, interconnectedness, nested hierarchies, dynamic balance, emergence and autopoiesis (that self-create the conditions to evolve)
Regenerative Design is defined by the processes you design to regenerate damaged ecosystems or as a principle of design and is already being applied in different sectors such as agriculture, focused on soil health and farmer’s well-being, architecture, urbanism, tourism, leadership, business models, finance and more and more in organisational design.
When talking about regenerative platforms we refer to “Strategies designed for an ecosystem of interconnected actors, who coordinate their activity with a common goal, creating the conditions for the whole to thrive and flourish”
At this moment in humanity that we are living and seeing what is happening, the questions that arise for me are: What do we want to build? Where do we put the energy? What do we want to empower? Where do we want to put our money?
Do we want to put the focus on a toxic and dying paradigm or do we want to build and empower a healthy paradigm for all?
Do we want to go against life or Do we want to flow with life?
Going against life means fighting to maintain rotten components of a system that is claiming to be renewed, going in favour of life means aligning nature and human needs to thrive and designing components for a system that can support life on earth.
Where we put our money matters.
The potential for other solutions
The world is increasingly waking up to the fact that the climate disaster will pose a much bigger challenge than anything we have experienced in recent decades. We can’t separate the environment, biodiversity, economy and human health and wealth.
Companies and governments around the world have set ambitious targets for climate change mitigation and adaptation to build resilience. Developed countries committed to jointly mobilize US$100 billion per year by 2020, from a variety of sources, to address the pressing mitigation and adaptation needs.
In addition, a further $140 billion to $300 billion a year by 2030 is needed to adapt to the physical consequences of climate change, such as rising seas and intensifying droughts. Interest has been growing in nature-based solutions and other biodiversity initiatives such as more sustainable and resilient food and land-use systems.
The net-zero transition will reshape the economy, opening new markets and imperilling others. By accelerating the transition, businesses and governments can create new sources of enduring value and a sustainable future.
The market gap is huge considering that almost everything remains to be done and a massive opportunity to develop a wide spectrum of potential solutions in all sectors.
This a generational opportunity to invest and the biggest capital reallocation of our lifetime, unlocking new economic opportunities and jobs.
ReFi
The Refi Movement (Regenerative Finances) – one of the most exciting categories within the blockchain economy that is leveraging both technology and positive climate action – is growing at a rapid pace, even if it is not exclusive to Web3.
Refi is the acronym for Regenerative Finance, coming from the DeFi or Decentralized Finances concept, which is a peer-to-peer financial system that uses blockchain and cryptocurrencies to allow people, businesses, or other entities to transact directly with each other.
In the case of ReFi, we talk about models, systems, and initiatives that support the holistic well-being of people and the planet following the principles of regenerative design to build solutions that address systemic issues.
“ReFi’s potential can be quantified using market analysis of four areas where it stands to have an impact: the voluntary carbon market (VCM), microfinance, climate change adaptation finance, and retail impact investing. The VCM is set to grow to between US$10 and $40 billion by 2030. A higher carbon price based on removal offsets could push the market size to US$1 trillion. Microfinance is a US$200 billion global market that could grow to US$300 billion by 2030. The adaptation finance gap is estimated to be between US$215-387 billion and continues to widen in the face of government inaction. Estimates suggest that retail investors have upwards of US$3.4 trillion in capital available for impact investing.”_The State of ReFi Report 2024
The ReFi movement looks for a holistic wealth beyond financial capital, one that takes into account other kinds of capital such as cultural, material, spiritual, social, intellectual, living and experiential capital, an evolution of Impact Investment that understands the connections that happen in an ecosystem and bring that to the way to invest.
Some examples of ReFi projects are:
Regen Network is a platform that focuses on using blockchain technology to promote ecological and environmental sustainability. Their platform is designed to facilitate the tracking, verification, and trading of environmental credits, such as carbon credits, through a decentralized system. Regen Network aims to incentivize landowners, farmers, and other stakeholders to engage in regenerative practices that improve soil health, biodiversity, and overall ecosystem restoration.
Open Forest Protocol is a decentralized platform that uses blockchain to verify and tokenize carbon credits from forest conservation and restoration projects. It enables landowners and organizations to track and trade carbon offsets, promoting transparency and scalability in forest-based climate solutions. The protocol connects environmental impact with financial incentives, supporting global efforts to protect and regenerate forests.
Circles is a decentralized platform that provides a universal basic income (UBI) through a digital currency called Circles. Using blockchain technology, it enables users to create and distribute their own currency, which can be exchanged for goods and services within the network. Each participant receives a fixed monthly income, promoting economic equality and financial inclusion, especially for those without access to traditional banking. Circles aims to create a community-driven, alternative monetary system.
Mercy Corps Ventures is the impact investing arm of Mercy Corps, focused on supporting early-stage businesses and social enterprises that address global challenges like poverty, climate change, and inequality. Through investments and partnerships, Mercy Corps Ventures helps scale innovative solutions that create positive social and environmental impact, particularly for underserved populations. The initiative focuses on ventures that offer sustainable products or services, aiming to drive economic growth, financial inclusion, and resilience in emerging markets.
Terrasos leverages blockchain to create verified carbon credits and other ecological assets that can be traded in global markets. This promotes sustainable practices and ensures the financial viability of conservation projects. The platform aims to make ecological restoration economically viable by connecting regenerative land practices with the growing demand for environmental credits, such as carbon offsets, and fostering a more sustainable future for the planet.
RefiDAO is a decentralised organisation focused on regenerative finance (Refi), using blockchain to support environmental sustainability. It connects projects, communities, and investors to create markets for carbon credits and ecosystem services, incentivising practices like regenerative agriculture and ecological restoration to combat climate change and promote sustainability.
BioFi
BioFi stands for BioRegional Finance, an evolution of ReFi and a system-thinking approach to finance that is defined as “A holistic and interconnected approach to revitalizing and restoring ecosystems, biodiversity, and cultural practices in a given spatial context.”
In a world where money is concentrated in the hands of a few, decentralised finance allocations seem something really obvious if you want to impact locally.
In the case of BioRegional Finances works in bioregions mapped by geological, ecological and cultural characteristics and funnel ressources economic and other ways of capital in a given bioregion into community-led projects, working with local citizens and listening to the land needs.
We are seeing similar approaches to portfolio design and management in public institutions such as UNDP
“Instead of funding short-term unrelated projects, we have deployed a portfolio of options: interconnected interventions which together can ignite a long-term transformation in the community.”
Since organizations are becoming more complex with a large variety of products and services we are seeing how product portfolio strategies are being implemented in private companies, defined by a high-level plan that helps you maximize the value a group of products creates. It achieves this by setting overarching goals for the entire portfolio.
Bioregional Finances Facilities, a proposal from Samantha Power to define a new type/layer of financial institution designed to serve the bioregional movement that has three objectives:
- Decentralize financial resources governance
- Organize synergistic portfolios of projects
- Catalyze the transition to a regenerative economy
Conclusions
We are seeing more and more system thinking applied to how we strategize, run and manage a business, the trend is to go to more autonomous, decentralized, distributed, interdependent and stewardship models that can manage the challenges we face, taking care of the planet and life on earth
A species can only thrive when everything else around it thrives. If we take care of nature nature takes care of us_David Attenborough
A Regenerative Economy is a system that becomes more sovereign over time, less dependent on global supply chains, place-based, takes into account all needs, connects for the benefit of all and grows internally in co-evolving and mutable relationships.
