The a16z Show: "The Rise, Fall & Reset of The Fintech Industry"

Date: December 19, 2025
Host: a16z (possibly Sonal Chokshi or another a16z team member)
Guests:

• Zach Perret (Co-founder & CEO, Plaid)
• David Haber (General Partner, Andreessen Horowitz)

Overview

This episode takes a deep dive into the cyclical journey of the fintech industry—tracking the dramatic boom, bust, and recovery cycles since 2018. With key figures like Zach Perret (Plaid) and David Haber (a16z) reflecting on pivotal events, the conversation explores what drove the industry’s meteoric rise, the forces behind the abrupt downturn, and why optimism is returning. The episode also examines the hottest areas today: fraud and AI, embedded finance, shifting business models, and the ever-evolving relationship between startups and incumbent financial institutions.

Main Discussion Points

1. The Seasons of Fintech: Boom, Bust, and Spring (00:00–06:41)

• Timeline & Metaphor:
  • 2018-2019: “Late spring,” rapid growth, fintech becomes a named industry.
  • 2020-2021: “EDM pumping summer”—explosive user and funding growth during COVID-19.
  • Late 2022-2024: “Fintech Winter”—funding dries up, industry contracts.
  • 2025: “Spring” returns—activity resumes with new awareness, challenges, and optimism.
• Key Stat:
  • “25% of all venture dollars in that period went into fintech.” – David Haber [00:09]
  • “The stat after that is not a good stat...starting in like the second half of 2022, like basically 0% of venture dollars went to Fintech.” – Zach Perret [00:13]
• Drivers of Cycles:
  • Low interest rates fueled lending businesses, growth, and outsized venture investment.
  • Rising rates shifted the focus from lending to deposits and full-stack solutions (e.g., SoFi, Lending Club, Robinhood now owning banks).

2. Fintech’s Evolution: Tech Becomes the Fabric (06:41–09:46)

• Maturation & Mainstreaming:
  • Fintech now synonymous with financial services; “embedded finance” infiltrates non-bank businesses (e.g., Ford, John Deere).
  • Banks increasingly see themselves as tech companies.
• Wider Reach:
  • “Every company is a fintech company” becomes truer as more non-startups integrate financial services.
• Fintech v. Traditional Finance:
  • “The startup industry now become mainstream and...powering experiences well beyond financial services.” – Zach Perret [05:37]

3. Current State: Access, Excellence, & AI Hype (06:54–11:37)

• Access Problem Largely Solved:
  • “We as a collective industry have solved the access problem... Now...you just go online, you apply for a mortgage, and you get 30 mortgage offers in an hour.” – Zach Perret [06:54]
• Next Challenge — Excellence, Not Just Digitization:
  • Reworking core experiences: credit scoring needs to become logical, actionable for consumers.
• AI & The Near Future:
  • “The way you get a mortgage is going to be talking to an AI application because that is just the most efficient, fastest way to do it.” – Zach Perret [08:56]
• Crypto as Fintech:
  • Crypto seen as both an extension of traditional fintech and an innovation lab. Mainstream appeal likely in stablecoins, asset tokenization, and speculation/prediction markets.

4. Incumbent Banks: From Siloed to Software Consumer (11:37–17:19)

• Cultural Shift Among Banks:
  • From “build it all in-house" (e.g., Goldman’s custom email client) to being “humbled” and now adopting best-in-class external tech—accelerated by AI’s tangible benefits.
  • “Many of these institutions, like if the technology wasn’t built there, they weren’t interested...There was this period where...we want to be the fintech companies ourselves...I think there’s a bit of a humbling that has happened.” – David Haber [14:36]
• AI as Catalyst:
  • “Now any CEO, any board member, can plug a prompt into one of these models and sort of intuitively understand the impact...That’s broadening the aperture...” – David Haber [16:35]

5. Venture and the Reset: Euphoria, Correction, Winners (17:19–20:54)

• 2021 Over-Exuberance:
  • “Every venture firm created a fintech team... probably too much euphoria going into that space relative to the amount of dollars.” – David Haber [17:47]
  • “No, no, I think it was the exact right amount of euphoria. Just the pullback afterwards that was the issue.” – Zach Perret [18:19]
• The Washout:
  • As rates/margins compressed, massive culling—especially among lenders. Survivors expanded their product set, became full-stack, more stable, and larger.

6. Global Fintech & Investable Opportunities (20:54–24:34)

• Consumer Fintech:
  • Customer acquisition costs make it harder to scale new consumer fintech in developed markets.
  • Emerging markets present opportunities due to untapped populations and the formalization of financial services.
• AI as Enabler:
  • “Self-driving money” is a long-standing dream; real trust/adoption barriers remain.
  • Plaid’s approach: build the foundation and see what emergent behaviors/products appear.
  • “If you build it, they will come. You just don’t know who will come and what they'll look like.” – Zach Perret [24:14]

7. Pragmatic Focus: Enterprise Fintech & AI (24:34–26:27)

• Enterprise Needs:
  • Massive opportunity in automating “boring but lucrative” manual workflows: compliance, legal, risk management, bond trading, loan servicing (e.g., MOMENT, Salient).
• AI Unlocks Labor Markets:
  • Now, “the TAM is largely labor”—AI can finally replace/reduce expensive, manual processes.

8. Frontier: Fraud as Fintech’s Biggest AI Challenge (26:27–30:22)

• Fraud Is Growing Fast:
  • “Turns out the biggest use case for AI is fraudsters committing fraud against financial services companies.” – Zach Perret [26:39]
  • “Financial fraud is growing at like 18 to 20% a year, which is insane.” – Zach Perret [26:50]
• Modern Fraud, Modern Weapons:
  • AI now powers scams formerly run by human crime rings (e.g., “pig butchering” scams).
  • Plaid’s Protect suite uses cross-network analytics to assess & prevent fraud.

9. Inside Plaid: Evolution & Crucible Moments (30:22–38:28)

• Growth Stages and Visa Acquisition Saga:
  • Plaid's founding, all about account linking (2014–2019).
  • Near-sale to Visa in January 2020, then reversal after DOJ investigation and COVID-19 boom.
  • “We had a year of exclusivity...and they have these things called material adverse event, so you can get out of a deal if something crazy happens. ... You can not get out...in the case of a global pandemic.” – Zach Perret [32:55]
  • Refocused culture post-acquisition, weathered “Fintech Winter,” now enjoying renewed product velocity and happiness from building through hard times.
• Industry True Believers Remain:
  • Tourist employees and investors left; those remaining are “true believers,” bringing renewed mission and community.

10. Where We Are Now and Looking Ahead (38:28–43:59)

• Current Cycle:
  • “Early to mid spring...green shoots, lots of emergence...Some snow in the background, but...looking pretty optimistic right now.” – Zach Perret [38:34]
• 2026 Predictions & Focus (Closing):
  • Returns to excitement about AI in enterprise fintech.
  • Emphasis on software-driven, network-effect businesses.
  • For Plaid: Protect (fraud suite) and Lens Score (modern credit score) are main growth drivers.
  • Ongoing recruitment, culture of customer-centricity, and “optimism for 2026.”

Notable Quotes & Memorable Moments

• On Fintech’s Cycles
  • “2018, 2019 in fintech was late spring...You went from late spring to, like, big EDM pumping summer really fast. Like, the music turned on very loudly, very quickly.” – Zach Perret [02:07]
• On the Downturn
  • “Summer went into a very, very short fall...And Fintech Winter was the second half of 2022, most of 23 and 24.” – Zach Perret [04:11]
• On Embedded Finance
  • “Every company is a fintech company...Now you see the emergence of embedded finance.” – Zach Perret [05:37]
• On AI’s Real Impact
  • “Turns out the biggest use case for AI is fraudsters committing fraud against financial services companies.” – Zach Perret [26:39]
  • “The cat will win long term, but the mouse is winning right now.” – Zach Perret [26:55]
• On Product-Led Recovery
  • “Many...have rebundled...they want to become...the full financial picture for their customers.” – David Haber [14:08]
• On True Believers
  • “Tourists go home...the people now that are focused on it are...the people who really want to be here in the long term.” – Zach Perret [37:58]

Timestamps for Key Segments

• 00:00–06:41 — Mapping out the seasons of fintech: boom, bust, & rebound
• 09:46–13:39 — Crypto: subset or superset of fintech?
• 14:00–17:19 — Banks’ changing relationship to technology
• 17:47–19:36 — What drove the fintech bust & who survived
• 20:54–24:34 — Geographies, consumer vs. enterprise, AI inflection
• 26:27–30:22 — AI, fraud, and the tech arms race
• 30:22–38:28 — Plaid’s history, key moments, and sustaining culture
• 38:34–41:01 — State of the cycle, what’s next for fintech and Plaid
• 41:01–43:47 — AI's enterprise impact, hiring & predictions for fintech’s next era

Tone & Takeaways

• The conversation is reflective, candid, and frequently self-deprecating. Both guests speak with a combination of nostalgia for wilder times and pragmatism about challenges ahead—especially the threat fraudsters pose with new AI tools.
• There’s a recurring “seasons” metaphor: The fintech industry, like nature, endures cycles—those who survive and adapt become foundational pillars.
• Optimism runs throughout: both for new software opportunities (especially with AI) and for the resilience of founders, teams, and financial systems willing to adapt.

For those who haven’t listened:
This episode is essential for understanding not just what happened in fintech from 2018–2025, but why—and where it’s headed. It’s packed with honest war stories, sober assessments, and a genuinely forward-looking outlook, making sense for investors, builders, and anyone paying attention to financial technology or the broader economy.