Pod Insights Equity Podcast LatAm 'plays on hard mode' according to VC Mercedes Bent About this episode This week, Mary Ann spoke with Mercedes Bent, Partner on the early stage team at Lightspeed Ventures and co-lead of Lightspeed’s LatAm region and angel fund. The pair chewed through a number of topics, including:
How and why Mercedes started investing in Latin America, and why she thinks the region is more resilient than others
Why we're early in the hype cycle when it comes to the intersection of AI and fintech
Why generative AI and fintech aren't always the best combination and much more.
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Transcript 0:11 Speaker 00 Hello and welcome back to Equity, a podcast about the business of startups where we unpack the numbers and nuance behind the headlines. I'm Maryann Azevedo. This is our Wednesday show where we sit down with a guest, think about their work, and unpack the rest. Today, we're joined by Mercedes Bent, partner on the early-stage team at Lightspeed Ventures and co-lead of Lightspeed's LatAm, Region, and Angel Fund. I'm super excited to have Mercedes on the show. We're going to chat through a number of things, but mostly about the current venture funding landscape as it relates to Latin America, fintech, and AI. Mercedes, welcome to the show. How are you?
0:46 Speaker 01 I'm great. Thanks so much for having me today.
0:48 Speaker 00 Yeah, no, we're so excited to have you. First off, I'm really excited to be interviewing you. I know we've gone back and forth over the years on various deals when I've written about companies that you've invested in. But honestly, today was the first time that I actually read your bio on the Lightspeed site. And I was excited to learn we have a few things in common. One, I too was born in North Carolina, and I haven't read Anne of Green Gables. I did watch the series on Netflix with my daughter.
1:13 Speaker 01 Oh, wow. Okay, a lot. Yeah, I can never watch television things or books I've imagined in my head because it just ruins the characters for me.
1:22 Speaker 00 Yeah, no, I get that, and I've been there too. But since I hadn't read the book, I was able to enjoy the series with my daughter, and it was actually really seemed to be well-done. I can't compare it to the, you know, keeping to the integrity of the book.
1:34 Speaker 01 Right.
1:35 Speaker 00 But we enjoyed it. We also have a lot in common in some other things in that we both have specialized in fintech and Latin America, but in different ways. But before we get into that, first, I'd like to hear more about your background before you became a VC. Like, what did you do professionally? I know you worked with a number of startups. You worked at Goldman Sachs. Tell us more about that.
1:54 Speaker 01 Yeah, totally. I mean, my interest in the tech world came from even before the professional career. When I was a young girl, my parents were entrepreneurs, and we just sat around the dinner table discussing business ideas every day, which I feel incredibly fortunate and privileged. To have had that exposure.
2:11 Speaker 00 I love that. That's awesome.
2:13 Speaker 01 Yeah, it was. It was one of those things where I was almost embarrassed at how my dad would be pulling out RFID chips to to show my friends. So I kind of always thought I would go into the tech world, started out a comp sci major, switched to economics, probably got caught up in the bubble of like, go to work in a big bank. So I worked at Goldman for a couple of years. I also worked at the Federal Reserve. Those are really great financial services experiences, the Federal Reserve right after the crisis.
2:40 Speaker 00 Oh, wow. That must have been really interesting.
2:42 Speaker 01 It was. I was on a behavioral group that was looking to understand why people entered into these loans that they kind of knew they weren't qualified for. And on the, you know, alternative side, why lenders.
2:56 Speaker 00 Gave them the money. Right. Yes.
2:59 Speaker 01 Exactly.
2:59 Speaker 00 Fascinating.
3:00 Speaker 01 Yeah, that's a long story for a different day, but you know, the behavioral psychology approach to it was super interesting that the Fed was doing that. And then at Goldman, I did a lot of asset management, private wealth, high net kind of worth institutional groups and a lot of equities and commodities trading that I did for them. And then did startups from 2012 until I joined Lightspeed. I was originally in operations and then a product manager. I was a GM leading P and Ls, kind of helped grow my company's 2 million to 100 million in revenue. Really fell in love with the kind of startup growth that messy, you have to figure out, manage through uncertainty, time and space that you're in. And then actually started a company in the death care space.
3:42 Speaker 01 It was not so successful. And then I did grad school and came over to Lightspeed.
3:46 Speaker 00 Well, I would imagine that your background in having worked at startups for several years like that and actually being a founder yourself comes in to be a very valuable experience as an investor. And even if your startup wasn't successful, even better, right? Because then you have lessons learned that you can share and things like that. So all of it's valuable. What startups did you work at?
4:08 Speaker 01 I was at General Assembly. It's an ed tech company that is really focused on career mobility. They are offering courses in web design, product management. I was leading their full-time division, where it's kind of like the bootcamp space. And I was also actually leading our financial products implementation. So I was their early customer of a firm upstart when we were using their lending and actually at that time, income share agreement of products, ISA products, and then also exploring a couple of other fintech products we didn't release.
4:38 Speaker 00 So what really drew you to fintech?
4:42 Speaker 01 For me, I've always been interested in investing in products that help consumers build wealth. And I think of that as just the foundations that people need in order to pursue work and life the way they love to. And so I have actually invested in a lot of different categories at light speed. And I kept coming back to investing in fintech because I just think it's such a change agent for people having control over their financial livelihoods. So it's really that mission and purpose. That's what brought me to venture capital as a whole. You know, I've invested in a credit card neo bank. I'm on the board of a company called Story in Mexico. I've invested in SMB neo bank that's verticalized
5:22 Speaker 01 around a specific industry, also in a cross-border bank that is helping companies open US bank accounts from other regions and some wealth management plays as well.
5:33 Speaker 00 Yeah, I noticed also in your bio that you said part of that decision to become an investor was driven by your realization that you could be an agent of change because you could see clearly, as all of us who work in this industry can, that underrepresented founders are severely lacking when it comes to funding. So can you talk a little bit more about that and how that has helped shape your career as an investor?
5:58 Speaker 01 I think of it as I have a unique lens because I'm different than a lot of other people in venture capital. Obviously, I have a similar background from an education perspective and also having worked in tech. But there's lived experiences you have being different, being kind of a one of the only in a lot of spaces that I've been in for the last 15 years. And to me, that meant I can understand founders in a different way, especially ones who felt underestimated and who have felt like the kind of society is not quote unquote on their side or are looking out for them. And then I also think It helps me think through new opportunity areas, new thematic areas to invest in. For example, going into Latin America or Lightspeed.
6:42 Speaker 01 It wasn't a region that we had invested in before. And I'm part Colombian, a tiny part Colombian. And so, you know, that lived experience of actually there's pretty large markets down there. And, you know, just putting on my investor capital hat, there's a huge arbitrage opportunity to be had as well. There's a lot of ability to make money.
7:00 Speaker 00 Oh, yeah.
7:01 Speaker 01 And I think a lot of the perspectives I heard were just so, oh, it's dangerous or people lose a lot of money. And you're like, okay, yes, you know, there's a lot of cities in the US that are dangerous.
7:11 Speaker 00 Right.
7:11 Speaker 01 And so I think there's risk and my background and orientation to venture capital makes me approach risk in a different way.
7:19 Speaker 00 I think that's, that's incredible, really. I think you bring up a very good point. Venture capital, as we know, is very much dominated by white men. And many founders kind of fall into that stereotypical category of white male, having gone to an Ivy League school. You know, there's just, let's just face it, there's a lot of that, there's no getting around it. Do you feel like you were treated differently as both a person who worked at startups? And then as a founder and then as an investor because you didn't fit that stereotypical mold?
7:50 Speaker 01 It's such a hard question to answer. You know, I, I believe so deeply in personal agency and like just pulling yourself up by your bootstraps. So I like to think that I've accomplished everything and been able to kind of manage through any situation. But it would probably be undeniable to say there wasn't some element of it here or there. I think the area it comes into most in venture. And, you know, for founders in the startup world is there's all those studies about when, and I, you know, when women are asked questions, they are asked questions in a more negative light. And they also are not as likely to be. Trusted and believed in terms of the answers that they give.
8:32 Speaker 01 And so I think that probably happens to me as well. But you know, there's also advantages. It makes me, I, I try and see the opportunities and say, okay, I can connect with a new group of founders that other people cannot connect with. I can even evaluate founders differently. Something I've noticed in venture capital is there's a kind of dominant way that people expect founders to present themselves that aligns with kind of majority culture. And sometimes soft spoken founders who are extremely bright and intelligent just aren't perceived the same way.
9:06 Speaker 00 They're not taken as seriously, maybe?
9:08 Speaker 01 Yeah, it's like, oh, is that person going to pound the table and really be the fundraiser that takes this to, you know, this business requires a lot of capital. Are they going to be able to raise hundreds, millions of dollars?
9:17 Speaker 00 Right.
9:17 Speaker 01 And I actually will go, I think you think no, because they seem softer and meek. I think the answer is yes, because I haven't heard anyone with that depth of knowledge and the ability to just go into the intricacies of every single part of the tech stack, the regulatory component, all of it. And so that different perspective, which is probably a little bit more open, because I have been on the receiving side of maybe some similar commentary, is what I think enables us to really find those contrarian perspectives.
9:48 Speaker 00 Well, that's an advantage, in my opinion, and especially in a very competitive venture world. I think also the fact that you introduced the firm to Latin America was huge. I mean, I've been following the space for at least six years now. Two thousand seventeen, I believe, is when I first started covering startup scene in Latin America. It's come a very long way since then. Lots of capital deployed, some very big success stories. So I think your, your vision was, you know, a smart one.
10:13 Speaker 01 Right time, right place.
10:14 Speaker 00 Yeah, right. I mean, I think also I wrote earlier this year or this summer, I can't even remember anymore, but Latin America was one of the few regions that saw an uptick in investment in the second quarter globally. I'll tell you exactly.
10:28 Speaker 01 I remember seeing that.
10:29 Speaker 00 You do, okay. And of course, I'm speaking with regard to fintech specifically, because it is such a pain point in the region. But fintechs in Latin America and the Caribbean saw a hundred and fifty percent. Increase in venture dollars raised in the second quarter compared to the quarter prior. So personally, I've been, like I said, I've been covering the region for a long time and I see a really big difference in LatAm founders when I talk to them compared to US-based ones. And I'm not trying to disparage US-based founders in any shape, way or form. There are many amazing US-based founders, but there's definitely a different kind of mindset. I think they've had to work harder, A, to raise capital, to even start the companies. It's harder to do there, right? So there's a different kind of, I don't know if hunger is the right word, but there's just,
11:14 Speaker 00 you feel like they've had to work harder, maybe work harder to prove themselves, to raise that money. And also I feel like the way they run their companies very often is different. They have to be more capital efficient. The money's not so readily available. Would you agree with that or is this just, am I just, is this an outsider's perspective?
11:31 Speaker 01 I think, you know, I saw an interesting quote earlier this year when the SVB crisis was happening. And it was a quote from LatAm founder saying, bank collapses, rising interest rate environment, no capital to be found. This is just every day in Latin America. So we're, we're used to it. I, I do think they play on hard mode a lot of times. And I would agree with you that the founder expectation, the average founder expectation is that capital is scarce. You need to be able to control your burn and survive through droughts of no ability for anyone to raise.
12:09 Speaker 00 Yeah, exactly. And there's countries in Latin America that have suffered through a lot of, you know, pretty tough economic cycles in recent years. So maybe they're, they're just, I don't want to say they're used to this sort of thing, but maybe there's a little bit, the resilience is different when being able to just cope and deal and be prepared, quite frankly, knowing that anything could kind of happen at any time. Really quickly back to fintech. Now, I've been covering fintech for a few years and 2021 was nuts, right? We saw so much money being poured into the space. I think it was 21% of all venture capital dollars in 2021 went to fintech companies. It was by far like the most invested in category. That did continue some in 2022. Obviously, things have kind of come back down to earth a little bit.
12:53 Speaker 00 Fintech is still a big sector. It's an important sector, but just as many other sectors, not as much money going to fintech startups. I think investors are, you know, just kind of. They're being more cautious generally in terms of which companies they invest in. I know as a reporter, I began to see too many companies and very similar, well, in the same spaces, promising the same things to the point where I couldn't tell anyone apart anymore. I had to stop. I really had to dramatically cut back on the funding round stories I would do because I couldn't find a differentiation between companies anymore. Can you relate to that as an investor?
13:28 Speaker 01 Oh, 100%. I mean, I think there was a period of time where you would see five, six copycats all pop up at the same time that were a derivation of one slightly later stage or unicorn company with a slight spin on it. And you know, this overproliferation of startups, I've been asking myself the question a lot of, you know, I think we already hit maybe the peak unbundling phase of the consumer fintech market in the US, and I would say US specifically because other markets, Latin America, Southeast Asia, Asia have super apps that we don't have. And I think this is exactly what you're talking about. There were just so many companies being funded. There's a different app for everything.
14:10 Speaker 01 And if we think about just the evolution of where we were in the bull market cycle, we went from, you know, physical big branches where there was consolidation and cross-sell there to now having internet distribution. It doesn't really create an opportunity for centralization. And so, yeah, we've been actually wondering how we're coming out of this peak unbundling and going to start to head back into a bundled phase of consumer fintech.
14:35 Speaker 00 I am actually very interested in that because I think we've seen some winners in the space and some who have really struggled a lot. I guess when you think about fintech was just overhyped in general. And, and speaking of overhyped, I'm going to get to in a minute, the intersection of AI and fintech. But first, we're going to take a quick break.
14:57 Speaker 00 What do you think's just been overhyped in fintech overall? And just in tech in general, I mean, in what you've invested in, we don't have to talk just about fintech, of course.
15:07 Speaker 01 Sure, yeah. Overhyped, it's interesting. When I think overhyped, I think how people built business models was very overhyped the past couple of years, which isn't a sector or a product category or a technology. But I think actually the idea of entrepreneurship itself was a bit overhyped because everybody assumed, oh, you just, you worked at a big tech company, maybe a thing, you like throw together a pitch deck, you know, you'll be able to go out and raise two, $5 million, easy. And then you kind of get a little bit of traction, maybe not quite product market fit, but you have some numbers in the tens of thousands, like you'll probably be able to raise A. And so the overhype was actually the really incorrect assumption of how easy it should have been to start a company.
15:53 Speaker 01 And that's fueled by venture capitalists as well. So, you know, it's the whole market. It's not, I'm not speaking against founders and saying they were, you know, wrong and remiss in the opportunity that they saw. But I do think that it was overhyped. Entrepreneurship is extremely difficult. And so that's what I'm seeing now is the better, and also the evaluations were very overhyped.
16:14 Speaker 00 Oh, gosh, yes.
16:15 Speaker 01 We're all coming back down to earth.
16:16 Speaker 00 For sure. I mean, obviously, we're seeing that with the, the number of down rounds that we report on, which was to be expected. We all kind of knew this would be the year of down rounds, so that's not shocking. Evaluations just reached crazy levels, 2021. They're coming back down to earth to more realistic places, I think, for everybody. But you raise a really great point about entrepreneurship being overhyped. I would agree with that. I do think that just because you might have an idea or a good idea to start a company, doesn't mean you should start one. And I think you're right. A lot of people just saw this, all this capital flowing and just decided they wanted to start a company, not really necessarily thinking it through long term.
16:56 Speaker 00 And that's where I see what we're kind of seeing now playing out, which companies really thought through things more long term, viable business models, real potential for product market fit. So we're seeing, I think, a weeding out now in general, again, not just in fintech, but overall of the companies that really didn't just start just to start, but like had something there, I guess. Yeah.
17:21 Speaker 01 Exactly. And I felt that within fintech, what that led to in the US was probably overhyped or overproliferation of companies that were, for example, a neo-banking model for another kind of subsegment of an identity group.
17:36 Speaker 00 Yes.
17:37 Speaker 01 As much as I love the possibility of what those and the mission that these companies are trying to achieve, I don't know that it's the best idea. I know you've written about this as well. They have graduation problems. You know, you bring somebody onto your platform. If they had the need, for example, no SSN user, then they might go on and they get their social security number and now they're going to graduate off your platform. And then the question of, you know, how at the forefront is someone's racial identity or their gender or, you know, their career. I think there's some elements where there was just a lot of slices of it. But as we saw with SBB and FRB, we're actually going through reconsolidation of the banking market versus, you know, extension of it. So.
18:20 Speaker 00 Yeah. I mean, I've been thinking a lot about that, honestly. And you're right, because I did cover multiple startups in the space targeting very specific demographics, whether that be black Americans, Latinos, Latinas in the US, Asian Americans, LGBTQ. I mean, there were just so many. And as I would write about them, which, by the way, I'm not seeing funding rounds for many of these startups come to fruition anytime recently, right? It's been a while. And I wondered, as I was covering these, like, who's really going to be successful at this? Because what can you offer that is really, truly differentiated for a specific demographic, other than just being a good neo-banker, offering important digital banking services? You know, what?
19:05 Speaker 00 I don't want to say it's gimmicky because I'm sure there are companies that had maybe specific offerings catered to certain demographics. But yeah, in a way, it did feel gimmicky. It's like, really, what can you offer? Is it more of just a marketing play?
19:19 Speaker 01 A hundred percent. Where I do think there's a better opportunity for verticalized fintechs is probably from a commerce perspective. If you look at verticalized, you know, SaaS companies around, for example, the barbershop community or around teachers or healthcare professionals, you know, it's SaaS that they need for their workflow. And then you start to build into the payments layer. You can start to offer financial products to their end customers and to the intermediary. I think that's the better area for verticalization to take place. And we're starting to see that happen a lot more.
19:57 Speaker 00 Well, as I alluded to earlier, we know that AI is like currently the sector of the moment, right? That's where a lot of investors are paying attention to or putting their investor dollars into. And I know you've tweeted your thoughts about this intersection of fintech and AI. I think one of the things you said is that we're early in the hype cycle as it relates to fintech. Can you elaborate on that?
20:19 Speaker 01 Yeah, we put out at Lightspeed a blog post in, I want to say, May or June of this year, highlighting some of our perspectives on fintech and AI. And a couple of thoughts. One, fintech is not new to AI. We've been using it in risk and underwriting models and in fraud detection for a very long time. This is kind of the standards of making sure you utilize machine learning. Now, what's new is generative AI. And it's actually a really different form of technological innovation than kind of predictive model-based, outcome-based AI. And so I actually think the areas where in financial products don't have a lot of room for errors. And so we don't actually see generative AI being used
21:03 Speaker 01 in core financial technology companies that have to have accuracy front of mind. There, we're still seeing a lot of the more traditional AI models used. Where we are seeing it and why I said it's early. Is we've been seeing generative AI and investing research tools, the more human interface, the let me search for this and have it pull up different documents. It's been trained on kind of the publicly available data sources. That we're seeing, we're seeing a bit of the automatically invest my funds into different stocks or retirement plans. It's still so early, though, because all of the applications that are using generative AI are missing a bit of trust from consumers.
21:43 Speaker 01 I have this conversation with founders all the time of what task do your consumers fully trust AI to do? They don't want a human in the loop. And it always comes back to only a couple of areas, really anything that helps take away their liabilities. So subscription cancellations, you know, automatically using AI to call my person who I have some debt with and trying to get me out of it, maybe spending less, like getting me coupons and savings. And so anything that decreases my spend, decreases my, the balance sheet of me, my liabilities, I'm happy to use AI for.
22:20 Speaker 00 Right.
22:21 Speaker 01 But anything that touches my nest egg, my assets that could potentially lose me money, I'm not sure I want to use AI. The consumer trust is just not there yet.
22:30 Speaker 00 Right. And it almost could be seen as a negative. I think if you're a fintech, you know, and touting that, then you might actually turn off some people. So looking ahead for the rest of this year in 2024, what do you see playing out in the startup world and venture world? Are we going to just continue to see more hype in the AI space? So how do you see this all shaking out?
22:51 Speaker 01 Well, I do think AI is creating really interesting opportunities right now is in a lot of the creative world. Like we've invested in maybe thirty five companies, companies like Stability AI, Tome, Glean, tons of companies that are in the productivity space, the creative media space. And that's where I'm excited for the opportunities for AI in the next kind of one to two years, like the short term. Companies that are doing, you know, text to video, text to image. I think this is a new form of input that actually improves the production and. Workflow of a lot of individuals. For example, my founders are using it with content businesses as a way to speed up testing and iteration.
23:33 Speaker 01 And especially if you have an enterprise customer, it's difficult to get them to, you know, actually get their input on your product. And so you can push more iterations to them faster and get time to revenue to decrease. So we are seeing that. That's where I'm really excited for AI to take shape. And then separately on fintech, you know, what I'm excited about is mostly not AI. I would say in fintech, I'm excited. There's kind of a, I've been thinking through this theory. I think we're entering kind of a third wave of finance. If you think about the first wave was the physical, you know, bank branches on the corner space. Then we moved into the desktop finance where companies like TurboTax and, you know, companies that were bringing us online for the first moment.
24:17 Speaker 01 Then we moved into the mobile banking era, which is the last 10 years. Neo banking became very popular. Where are we going from here? It's actually a little bit unclear, and I think investment in consumer fintechs has been low because people don't know where we're going. The companies I'm seeing grow the most are companies that enable users to feel like they're more sophisticated with their spend and wealth choices. And so we already have an app for everything. We already have five to seven debit and credit cards. But companies that make me feel like I'm spending my marginal dollar in the most intelligent way possible. That's where I'm seeing a lot of companies grow. So things like travel, you know, accounts for when you're traveling,
25:00 Speaker 01 making sure that you're saving and optimizing on taxes by maybe having like cross-border global accounts. Other companies that are, what we talked about earlier, doing some of the automatic refund cancellations, but starting to think a little bit ahead predictively for you to other expenses that you might want to get in front of. How do I have my cash that's been idling and sitting around? Yeah, I can just put it in a account earning three, four percent. But maybe what about like automatically investing me into? Treasury bills and kind of putting me in a laddered approach and ensuring that I'm actually getting the most out of this rising interest rate environment. So we're seeing a ton of that, which is, I would say automated, but not really generative AI driven.
25:43 Speaker 00 Yeah, no, that makes sense. That's super interesting. Well, we're technically out of time here, but I could talk to you for another hour. This has been so much fun. Mercedes, I really appreciate your coming on the show. For our listeners, can you tell them where to find you on social media?
25:57 Speaker 01 Yes, you can find me on Twitter, still using it, Mersevent, M E R C E V E N T. And that's the main one. Otherwise, email is best. I'm on LinkedIn as well, but LinkedIn and Twitter and email are best.
26:12 Speaker 00 Yes, and you can find Equity on Twitter or X, as I guess it's now officially called, and Threads, at EquityPod. Thank you again, Mercedes, for joining us. Thank you all to our listeners, and we'll talk to you again on Friday.
26:25 Speaker 01 Thank you.
26:27 Speaker 02 Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azevedo. We are produced by Teresa Loconsolo with editing by Kel. Bryce Durbin is our illustrator, and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.
Previous Equity Monday: Robotaxis hit a speed bump and IPOs are back on the menu Next Startups that are Ramp-ing up, and startups that are full of sh** Page updated October 26, 2026 · transcript and summary are machine-generated
