VIDEO: Impression Ventures CEO Christian Lassonde on Fin-Tech and Disruptive Technologies in the Space.
Impression Ventures CEO Christian Lassonde discusses some of the innovation in fin-tech specifically in the insurance industry. He also shares his thoughts on blockchains and how it does not go hand-in-hand with fin-tech. Impression Ventures is a privately held company in Toronto.
James West: Christian, thanks for joining me today.
Christian Lassonde: It’s a pleasure.
James West: Tell me about your company: what is it, and what does it do?
Christian Lassonde: So I run, with my partner Maor Amar, a venture cap company called Impression Ventures, and we invest in early stage companies that are disrupting financial services – so, fintech companies.
James West: That’s more like Adventure Capital.
Christian Lassonde: We certainly – if you look at us in the spectrum of asset classes, our job is not wealth maintenance; our job is wealth creation. So we’re at the very far end; we shouldn’t be anyone’s other, institutional investors or individual ultra-high-net-worth investors, you know, more than a few percentage points of their portfolio. But we fit a very specific asset class within that group.
James West: Great. How much capital are you working with?
Christian Lassonde: So our current fund, we just closed a raising back in April and it’s a little over 30 million, so we’re at the point right now where we’re well on our way to getting that fully deployed.
James West: Great. What’s your favourite sort of sector right now?
Christian Lassonde: We’re really intrigued by the insurance tech right now.
James West: Insurance tech?
Christian Lassonde: Insurance tech, yeah. There’s been to a greater or lesser degree, actually, less disruption of insurance tech over the last sort of decade than some of the other financial services sectors. I mean, look at payments; payments has been, between the US Square, Stripe, those guys, actually a fair bit of money has gone into payments, versus insurance tech, which is really just starting to see investments from venture capital in the last two-three years. We’re certainly seeing lots of interesting disruption going on there.
James West: And so, what are some examples of insurance technology functions that are disrupting?
Christian Lassonde: So we just invested, for example, in a company called Finaeo, based here out of Toronto, that is building a CRM platform for life insurance brokers. So think of the life insurance broker’s typical user experience: their job is to explain to individuals the benefits of having a life insurance plan, and there are quite a number of benefits. But it’s a very complicated product; I mean, if you’ve ever purchased, or tried to purchase, life insurance, there are many different options and many complications. And this is an issue that, largely, has not been digitized.
If you think from a user experience, what does technology typically bring to the table, is a seamless, much less complicated experience, and that’s what they’re bringing to the life insurance space. And we’re certainly think we’re quite excited by what they’re doing, just as an example.
James West: Sure. Okay. So is it a case of a Blockchain for insurance, kind of thing?
Christian Lassonde: No. We’ve steered clear, for the most part, of Blockchain, largely because for the most part, Blockchain really isn’t fintech, in our view.
James West: Oh, really?
Christian Lassonde: Yeah. I think of it more as database tech than it is fintech. Blockchain really is actually, in our view, right now, three very different things are going on. You have cryptocurrencies, which is really more of a barter economy for all intents and purposes. You have the tokenization of monetization through the ICOs. And then lastly, you have the core Blockchain tech, which is, in our view, just sort of a distributed, tamper-proof database technology. For the large part, that’s not really fintech.
James West: That’s an interesting perspective. So the disruptive nature of the Blockchain and cryptocurrencies is not a concept you subscribe to, generally?
Christian Lassonde: Not really. I think the views that we’ve established, and we’ve spent a fair bit of time in the space, thinking about it – it’s not to say that it won’t be disruptive at some point, and that there are parts of the economy globally that aren’t going to be disrupted by Fintech, by one of these three things. But for the most part, what you’re really dealing with is a set of technologies that are really focused on creating sanctioned and censorship-proof transactions.
The reality is, it’s not something that the vast majority of the world population really needs or cares about. In other words, we have a multi-trillion-dollar global economy; in fact, I’m probably understating that by a gross amount, working under the current system and really having no problems with it whatsoever. In other words, the average individual doesn’t need a sanction-proof, tamper-proof method of payment.
So we think that the use cases for these technologies are largely overstated. That’s not to say that there aren’t some interesting ones; we’re certainly looking at them. But unfortunately in our view, Blockchain is really more of a solution looking for a problem to solve rather than the other way around.
James West: So in your estimation, then, as a venture investor, do you see the –
Christian Lassonde: And by the way, I’m definitely in the minority in this view.
James West: Right. Well, I’m interested in alternative viewpoints and in case of Blockchain/cryptocurrency, there’s an unquestionable mania afoot right now.
Christian Lassonde: Absolutely.
James West: And it has engulfed capital markets in every major centre around the world. And so, from where you sit, is that a mania that is best categorized as a bubble that is risking a huge vaporization as well?
Christian Lassonde: That’s a very safe bet. You know, the euphoria around these assets is, in our view, extensive, and certainly overstated. But it’s the – Bitcoin or Ethereum are trading at the market clearing price today, though I wouldn’t bet a large amount of money that the market clearing price sometime in the future will be much lower.
James West: Right. So we sort of get the impression from all of the guests that come in here that essentially, it’s a giant game of musical chairs whose music is guaranteed to stop at some point in the future. The only other guarantee is that there will be nowhere near sufficient chairs for everybody to sit down! Is that something that is causing you to stay away from Blockchain and cryptocurrencies specifically?
Christian Lassonde: We stay away from cryptocurrencies not because of that, we just stay away from it because we’re venture capitalists focusing on building companies and cryptocurrencies are not companies. These are distributed currencies, barter systems, whatever you want to call it.
That said, I don’t see them plateauing anytime soon. The reality is, there are state actors, and there is the black market economy, which benefits from a censorship, sanction-proof economy, and they are largely supporting that. I think at some point, governments in developed nations of the world will intervene at some point, in some method. How, I don’t know; it’s above my pay scale…
James West: So its viability is based on its usefulness to the criminal element. Therefore, it will enjoy a long future, perhaps!
Christian Lassonde: Yeah, exactly.
James West: Okay. Enough about crypto. So what else is it that’s really catching your eye in the fintech space, besides insurance tech?
Christian Lassonde: We look for opportunities where traditional financial services have benefitted from their being about 15, 16 different business lines, some of them extremely profitable, some of them not so profitable. And those extremely profitable lines, typically, are only capable or only possible because of the some of the profit life-line. So a couple of years ago we invested in a small little start-up called Wealth Simple, and it’s going after, for example, mutual fund fees that are out there.
They’ve extracted, if you will, that focus on that one sector, and obviously bring an amazing user experience and wonderful service to their customers. So we look for things like that, where we can create a stand-alone business outside of the bank that is going after these really lucrative businesses, and bring investor-class user experiences. So, passing on a lot of those savings by being extractive from the financial services firm to the consumer. So it’s a win-win-win, right? The consumer wins, because they’re getting a better user experience, typically at a much lower price.
The company wins, because they’re building a successful business. And we’re all sort of better off.
James West: Interesting. Christian, thanks for joining us today.
Christian Lassonde: It’s a pleasure.
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