EXCLUSIVE: “Funding the Future” – Ashish Aggarwal, PayPal Ventures in ‘The Paytech Magazine’

Ashish Aggarwal, Partner at PayPal Ventures makes the case for fintech democratising access to finance

PayPal is one of the original fintechs, having pioneered the digital wallet and changed the way we shop and pay online.

For some pioneering companies, that initial spark can dwindle as new disruptors enter the market. But PayPal isn’t resting on its laurels. From a position of influence and healthy balance sheet, PayPal’s corporate venture capital arm, PayPal Ventures (PPV), invests in exciting startups at Series A and B stages across the globe in multiple sectors including fintech, payments, commerce enablement, artificial intelligence, blockchain and cryptocurrency, and regulatory/cyber technology.

PPV has been investing since 2017 and has a physical presence in San Francisco, New York, and London, with more than 70 companies in its portfolio. This has included the likes of Divvy, Paidy, Plaid, Raisin, Tabby, Tink, and more. It has a global geographic investment mandate with a core focus on the US, UK and Europe, as well as key markets including India, LATAM, the Middle East, Africa, and Southeast Asia.

Partner Ashish Aggarwal has been with PPV since the beginning, with a focus on EMEA and APAC. We sat down with him at the Fintech For Inclusion Global Summit organised by Accion Venture Lab to chat about financial inclusion and whether AI really is going to take over the world.

The Fintech Magazine How has PayPal’s impact as a global company had an effect on its corporate venture capital arm?

Ashish Aggarwal “Broadly, PayPal’s reputable global brand enhances our portfolio companies’ credibility with customers, potential investors, and regulatory bodies.

“On the Ventures side, we leverage the breadth and depth of expertise within PayPal to add value for our founders through multiple layers of support. We provide portfolio-level programming and opportunities for founders to leverage PayPal’s expertise via a dedicated Advisor Network, which includes seasoned executives with extensive knowledge and experience across critical areas such as product development, technology, human resources, government regulations, and marketing.”

The Fintech Magazine What role does tech play in developing financial inclusion?

“Successful fintechs have not only promoted financial inclusion, but actually expanded the total addressable market of financial services”

Ashish Aggarwal “Innovative fintech startups are helping build a more financially inclusive world by expanding access to credit and other financial services to customers in emerging markets, as well as those who have not traditionally been serviced by incumbent financial institutions (FIs). Historically, these FIs have faced challenges in servicing customers and small businesses with low transaction values due to high servicing costs, often caused by manual processes and limited technology adoption.

“Successful fintechs have not only promoted financial inclusion, but actually expanded the total addressable market of financial services by offering a broad spectrum of products – including bank accounts, payment processing, savings, and insurance – to hundreds of thousands of underserved merchants and consumers worldwide.”

The Fintech Magazine What’s the business case for financial inclusion?

Ashish Aggarwal “Being unbanked doesn’t necessarily mean a customer lacks creditworthiness. In many cases, particularly in developing markets, traditional institutions are unable to underwrite due to a lack of available data. This is why we consider digital payments to be the foundational layer.

“Take India’s instant payments system, UPI, as an example. Its widespread adoption has transformed cash transactions into digital ones, creating a traceable record of financial activity. This new data enables fintechs to assess creditworthiness based on a customer’s digital financial footprint, driving a positive cycle of financial inclusion.”

The Fintech Magazine What does PPV look for in founders and startups?

Ashish Aggarwal “We assess founder-market fit, market size, and product- or distribution-led competitive advantages, among other factors. As we typically invest at the Series A or B stages, we expect startups to have a good sense of their unit economics by this point.

“Additionally, we are biased towards business models which have the potential to scale across multiple markets. While this isn’t mandatory, broader applicability can provide a strategic advantage.”

The Fintech Magazine Finally, how much will AI be a central feature in creating the next big fintech unicorn?

Ashish Aggarwal “The pace of evolution in this space is remarkable. AI is emerging as a significant driver of efficiency across various functions, including customer service, risk underwriting, operations, and more. While there are still questions regarding ROI and accuracy, both metrics are improving as the costs of running large language models (LLMs) decrease and their accuracy increases.

“What excites us most is the potential to leverage AI to expand addressable markets by either targeting new customer segments or launching products that were previously unattainable. We are actively investing in AI and closely monitoring new and emerging business models.”

This article was published in The Paytech Magazine Issue 13, Page 38