There is massive momentum in fintech right now: regulations are finally opening up, APIs are more widely available than ever before and there is a sense that existing products — both financial and technical — are just not doing the job that consumers and financial professionals demand.
With excitement like that, fintech has unsurprisingly seen a veritable explosion of exit activity over the past year, with massive numbers being posted on the leaderboard like Credit Karma’s $7.1 billion acquisition by Intuit, Plaid heading to Visa for $5.3 billion and Galileo being snatched by SoFi for $1.2 billion.
So VC firms are bulking up on their fintech talent — even those who specialize in the field itself.
Nyca Partners publicly announced today that Jeremy Solomon will be joining as a principal. Among the best-known and longest-term investors in the fintech space, Nyca has invested in dozens of fintechs, such as Affirm, OpenFin, Blend and Digit over the past six years, and the firm also just raised a fresh $210 million third fund last year.
While “fintech” didn’t really exist a decade ago, Solomon has a uniquely deep background in the rapidly expanding space. He started as a banker, but then veered off the traditional Wall Street path to move to Uganda to work on microfinance. We “had to figure out how to do small-dollar lending in a rural environment,” he said of the time, which was right before the 2008 financial crisis. He came back to the U.S. for business school, but “what puzzled me was why the U.S. market was so far behind” in financial services.
While at Harvard Business School, he linked up with the co-founders of SoFi who were at Stanford GSB, which started out as an online lending marketplace for business students to find more affordable student loans. He became employee number one, leading up the financing that the company would lend out to borrowers. From there, he went to another lending marketplace, LendingClub, and worked through the company’s IPO.
LendingClub, though, was later in its development than what Solomon experienced at SoFi, and he wanted to head back to those early-stage roots. He eventually linked up with Max Levchin and joined Affirm, heading up its finance as interim CFO before becoming its chief capital officer.
It was the connection with Levchin that brought Solomon to Nyca. Nyca and Levchin have a deep alliance with each other, with Nyca being an early investor in Affirm, and Levchin previously serving as an “investment partner” with the venture firm. Solomon built up a relationship with Nyca and its partner Hans Morris over several years, and eventually decided to make the leap to venture after a decade in the startup world.
Solomon will move from the Bay Area, where has been located for more than a decade, to New York City — a reasonably rare transition for someone with his pedigree. “It’s going to be detrimental to my cycling hobby,” Solomon jokes, but “while there is more innovation going on in the fintech space in the Bay Area, I think it really is shifting in a lot of ways to the New York scene.”
The huge focus on consumer fintech products is expanding to include more and more of the infrastructure that runs these finance institutions. “There are a lot of problems that are emerging in banking, asset management and insurance that are New York-centric,” Solomon said. “Some of the problems that financial institutions face today are much more nuanced and really require prior expertise in financial services.”
Solomon says he will focus a majority of his time on the credit sector. “What’s interesting about the credit sector right now is that nothing is working in it,” he said. Given the COVID-19 situation, nearly every step of the pipeline for underwriting loans today is challenging, from assessing creditworthiness to properly securitizing loans for the right prices.
For fintech founders, the additional hire is welcome news. Solomon officially started a few weeks ago at Nyca, but is in the process of conducting a (rather daunting) move cross-country to officially begin investing in NYC proper.
Update April 21, 2020: corrected Solomon’s business school to HBS from Stanford GSB.