What to Watch for FinTech Startups in 2021 with Devon Sherman, SVP of MassChallenge Verticals

We sat down with Devon Sherman, Senior Managing Director of MassChallenge FinTech and HealthTech, programs that drive intentional partnerships between startups and large enterprises in financial services and digital health in order to solve the biggest challenges facing both industries.

Drawing upon her past learnings as a Global Strategist at State Street Corporation, since 2018 her team’s goal at MassChallenge has been to help startups become more enterprise-ready and to help enterprises become more startup-ready to drive real results together. We asked her about her views on fintech in 2021 – here's what she had to say.

An area we’ve seen considerable activity in is proptech and real estate. Can you talk a little bit about what’s going on there?

There’s a growing emphasis on customer engagement and experience, much like we’ve seen in more traditional financial sectors like banking. Homezada, for one, is an example of a startup that provides a personal finance app to manage every aspect of your home, which speaks to the realization that personal finances and home finances shouldn’t be as siloed as they’ve been in the past. We’re also seeing more emphasis put on real estate as an asset class and harnessing the vast amounts of data available, with startups like Beekin using big data and AI to address the fragmentation and information gaps of the industry.

You touched upon the blurring of traditional boundaries as it relates to an individual’s finances. As someone who sits in both the digital health and fintech industries, can you talk more about what you’re seeing with the overlap of health and wealth?

At MassChallenge, our HealthTech and FinTech verticals have always operated on the same partnership-centric model. As an exciting evolution, this year we’re bringing both programs together under one umbrella, allowing us to double down on the intersection between health and wealth . 

For example, we’re seeing a rapidly growing focus on eldertech, with startups like TCARE and Worthright working with life insurance organizations on long-term care solutions. We also see the sense of urgency on the corporate side -- many of our corporate partners, like Fidelity, are laser-focused on health and wealth this year through our program. Whether it be end-of-life planning (startups like Trust & Will and Cake leading the charge) or managing childrens’ finances (Till and Goalsetter being up-and-coming companies in the space), large enterprises are recognizing that an individual’s wellbeing goes well beyond financial health and that they can help support many areas of their customers’ lives.  

COVID-19 has put a spotlight on small businesses. What role do you see fintech playing to support them?

Fintech is critical to a swift and inclusive recovery for small business owners. We actually partnered with the City of Boston this year to address many of the challenges facing small businesses, from creating improved access to credit to enabling affordable rent. I think this community-driven and public-private partnership approach is critical to holistic long-term recovery. 

In light of the PPP/CARES Act, fintech has really helped change the SME lending space, with Boss Insights and eCredable as strong examples in the data/automation and credit spaces respectively. Monit is also a really cool company to roll out of Eastern Bank recently, because they bring predictive capabilities to help small businesses manage their finances more seamlessly. I hope that we’ll see more fintech startups like these that are solving specific pain points come together as platforms to deliver more holistic solutions to small business customers -- and the individuals behind them.

Last question – any other areas of fintech you’re keeping an eye on?

I’m excited to watch how the funding landscape will continue to evolve in fintech and other industries. At MassChallenge, we’re zero-equity, so we think a lot about how to support startups seeking funding. It will be insightful to see how investors progress the due diligence process, which has historically been so reliant on live, in-person interactions and discussions now that we are a year into lockdown in most places.  

It’s also meaningful to see established funds taking a critical look at their own biases and diversifying venture capital talent, which has historically been dominated by white, cisgender men. I’m encouraged by new funds emerging that focus on underrepresented founders, particularly those in the BIPOC (Black, Indigenous, & People of Color) community, such as Visible Hands here in Boston. It’s also interesting seeing startups in our community thriving with diverse investors that will bring dynamic value to their companies – like how NBA players like Kevin Durant and Chris Paul invested in Goalsetter alongside more traditional players like Mastercard.