Introduction

Despite recent talk that fintech investing has cooled, Sheel Mohnot, co-founder and general partner of Better Tomorrow Ventures (BTV), believes the sector’s opportunities are far from exhausted. According to Mohnot, about 20% of global GDP is tied to financial services, yet much of it remains undigitized, leaving a massive window for innovation. BTV, led by Mohnot — formerly a general partner at 500 Startups — and NerdWallet co-founder Jake Gibson, is positioning itself to capitalize on this ongoing transformation in financial technology.

Digitization: The Next Frontier in Finance

Many financial transactions today are still handled manually, creating inefficiencies across the industry. Mohnot emphasizes that the “massive digitization opportunity” is still ahead of us, and BTV’s investors share this optimism. Recently, the firm raised a $140 million third fund, almost matching its previous $150 million fund, signaling continued confidence in fintech despite market fluctuations.

Unlike the exuberant environment of 2021 — when startups raised follow-on rounds at inflated valuations — the current fintech landscape is more measured. Mohnot explains that the cooler enthusiasm allows BTV to participate in the best startups without needing as much capital. Interestingly, the firm has yet to tap into its $75 million opportunity fund from 2022, which could support future late-stage investments, especially as fintech IPOs like Chime, Klarna, Navan, and Wealthfront attract renewed attention.

Focus on Early-Stage Fintech and AI

BTV is particularly bullish on AI-driven solutions in accounting and other labor-intensive financial services. The shortage of accountants and growing demand for automation present ideal opportunities for AI applications. BTV has already invested in three accounting startups:

• Basis – recently raised $34 million Series A led by Khosla Ventures.
• Layer – an embedded accounting platform for small and medium-sized businesses.
• InScope – a startup automating audited financial statement drafting.

Beyond accounting, Mohnot identifies AI’s potential in underwriting, compliance, fraud detection, and customer support, noting that AI can perform these tasks more efficiently and at lower cost.

BTV’s broader fintech portfolio includes companies like Coast, a payments platform for fleet drivers; Relay, an online banking and cash management platform for small businesses; and Unit, a banking-as-a-service startup valued at $1.2 billion.

Investment Strategy and Outlook

For its third fund, BTV plans to invest in 30 to 35 companies, with individual check sizes ranging from $500,000 to $3.5 million. The firm’s strategy underscores a clear belief: even in a more disciplined market, fintech remains ripe for innovation, particularly where AI and automation can reduce costs and improve efficiency.

Conclusion

Better Tomorrow Ventures continues to demonstrate that fintech is far from a saturated space. By focusing on digitization, AI applications, and labor-intensive segments like accounting, BTV is positioning itself to capture the next wave of transformative fintech startups. With strategic capital deployment and a careful eye on both early-stage opportunities and potential late-stage exits, the firm is shaping a future where financial services are faster, smarter, and more accessible — proving that the fintech revolution is just getting started.

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