The Deployment Phase

Why the Next Iconic Fintech Companies Are Being Built Right Now

We spend a lot of time thinking about cycles. Not just markets - but how innovation, capital, and distribution collide to create enduring companies. 

It's easy to get caught up in the noise of any given moment - a rate move, a valuation reset, a wave of layoffs, a buzzy new model. But zoom out, and the signal becomes clearer. The shape of what's happening in fintech today isn't new. It's happened before. And the firms that understood the pattern came out the other side owning the future.

Every time fintech feels uncertain, we come back to one framework: Carlota Perez. Her work - most fully articulated in Technological Revolutions and Financial Capital - maps how every major technological revolution unfolds, not just technologically, but financially. The pattern repeats across the steam engine, the railroad, the automobile, electrification, and the internet.

Today’s wave of innovation is being driven by AI.  Not just in finance, but across every sector.

Each revolution moves through the same arc. Each one produces irrational exuberance followed by a crash followed by a deployment phase where the real wealth gets built. 

Fintech is following that exact playbook today, and knowing where we are in the cycle changes everything about how you invest, how you build, and how you think about the next five years.

Phase 1: Installation

This is where we've been living for the better part of a decade. Installation phases are defined by a simple dynamic: new infrastructure gets built, capital floods in ahead of fundamentals, and the race is to lay track as fast as possible. Everyone moves fast. Everyone raises large. The winners of the installation phase are the ones who build the foundational rails that everything else runs on - and plenty of capital gets destroyed in the process of figuring out which rails those are.

In fintech, that looked like embedded finance infrastructure, neobanks, and verticalized financial products targeting every imaginable niche. API-first companies rebuilt the plumbing across payments, lending, and insurance from the ground up. Venture funding hit record levels. The barrier to entry dropped dramatically. A team of three with the right stack could spin up a financial product in weeks that would have taken a chartered bank years and hundreds of millions to build.

That was real. The infrastructure built during this phase is genuinely valuable and will persist. But capital - as it always does during installation phases - ran well ahead of fundamentals. Valuations detached from revenue. Growth was rewarded regardless of unit economics. The number of companies exploded, and with them, the complexity of figuring out which ones actually mattered.

It was exhilarating, and necessary. Installation phases always are. But they are not where generational companies get built. They're where the conditions for generational companies get created.

The Turning Point

Between the installation phase and what comes next is always a reset. Perez calls it the "turning point," and it has a recognizable signature: valuation compression, funding pullbacks, company shutdowns, and a hard shift in expectations from growth at all costs to efficiency and sustainable economics. Investors who wrote checks at 40x revenue start asking hard questions. Founders who built for growth metrics start rebuilding for margins. The noise clears.

We are in it. Not at the beginning. Not at the end. Firmly inside the reset.

This is the uncomfortable part — not just for founders, but for everyone in the ecosystem. Portfolios get marked down. Good companies struggle to raise. The narrative shifts from possibility to skepticism. It can feel like the whole thesis was wrong.

It wasn't. The turning point isn't a failure of the revolution. It's part of the structure of it.

There's a line we come back to often, from entrepreneur and writer Tom Evslin: "Nothing great has ever been accomplished without irrational exuberance." The corollary is just as true — nothing important happens without crashes. The crash isn't an aberration. It's the mechanism by which the system separates the infrastructure that actually matters from the infrastructure that was just built because capital was cheap. It's painful, and it's necessary, and it sets up everything that comes next.

Phase 2: Deployment

This is where real companies get built. Not features. Not point solutions. Not another neobank targeting a slightly different demographic. Platforms.

Deployment phases are defined by a different kind of value creation. The rails exist. The question shifts from "can we build this?" to "who has the distribution, the data, and the trust to own the relationship at scale?" The winners in deployment phases are not always the companies that moved fastest during installation. They're the ones that understood - early enough -  that the game was changing.

We believe the next phase of fintech will be defined by several converging forces. Financial services will become embedded invisibly into every consumer and business experience, to the point where the seams disappear entirely. You won't think of it as fintech. You'll just think of it as the checkout flow, the payroll product, the insurance that came with the software you already use. The infrastructure built during the installation phase makes this possible. Distribution makes it defensible.

AI-native financial products will reshape entire categories. Underwriting, servicing, fraud detection, personalization - these functions are being rebuilt from scratch by teams that started with AI rather than bolting it on. The incumbents are moving, but incumbents always move slower than they think they need to. The window for AI-native challengers in financial services is real, and it's open right now.

Consolidation will accelerate. The long tail of point solutions built during the installation phase will get acquired, shut down, or marginalized. Customers — both consumers and businesses — are fatigued by tool sprawl. The companies that can consolidate functionality into coherent platforms with better economics will win relationships that are far stickier than anything a point solution can offer.

And perhaps most importantly: sustainable economics are no longer optional. The companies that will define the deployment phase are building with real margins, real retention, and real defensibility. Efficiency is not a consolation prize for companies that couldn't raise at a high multiple. It's the whole game now.

Where We Lean In

The installation phase builds the rails. The turning point clears the noise. The deployment phase creates generational companies. This sequencing is why we are more convicted today than we were at peak hype.

The founders building right now are not chasing momentum. They're not optimizing for the next round. They're solving real problems with full awareness that capital is not infinite, that distribution is hard, and that the only way to win is to build something customers genuinely cannot do without. That clarity - forced on the market by the turning point - is actually a gift. It filters out the tourists and leaves the builders.

Nobody has the network that you have. Nobody has the skill set. That's true for the founders we back, and it's true for the category as a whole. Fintech has spent a decade building infrastructure, talent density, institutional knowledge, and consumer familiarity that didn't exist before. The next phase gets to compound on all of that.

Our belief is simple: the next iconic fintech companies won't be built in the hype cycle. They'll be built right now - by founders who understand that distribution is a moat, data is an asset, and efficiency is a weapon. By teams that have read the cycle correctly and are moving with discipline while others are still waiting for conditions to feel comfortable again.

Conditions never feel comfortable at the beginning of something great. That's the point.

This is where cycles reward discipline. This is where conviction matters most.

That’s why today, more so than ever, we’re leaning into the future of financial innovation.  History doesn’t always repeat itself, but it often rhymes.  We’re in the midst of another technological tidal wave propelled by advances in artificial intelligence, quantum computing, robotics and distributed networks.

Like past cycles, we believe now is the time to build, and as a result, now is the time to invest and support.  We’re grateful to have built an ecosystem that can do both, and if you’re a founder who believes what we do, we’d love to connect to see how we can help.