With a new $140M fund, BTV is betting big on the digitization of financial services

Fintech investing may no longer be the media darling it was in 2021, but for Better Tomorrow Ventures (BTV), the opportunity has never been more compelling.

“Finance is a massive industry — roughly 20% of global GDP — and it’s still far from fully digitized,” says BTV co-founder and general partner.

That belief underpins the firm’s latest milestone: the close of its $140 million third fund, a near match to the $150 million fund it raised in early 2022 during the tail end of the zero interest-rate policy (ZIRP) boom.

“We actually planned to raise a smaller fund this time,” Mohnot explains. “2021 was over the top. Companies were raising follow-on rounds at inflated valuations almost immediately after we invested — and that wasn’t sustainable.”

With the market cooling off and valuations settling, BTV sees a more disciplined environment where it can invest smartly without needing outsized capital.

The firm also hasn’t yet tapped into its $75 million opportunity fund raised alongside Fund II. But with fintech IPOs like Chime, Klarna, Navan, and Wealthfront on the horizon, late-stage appetite may return and that dry powder could soon come into play.

BTV has backed three early-stage startups transforming the accounting space:

• Basis, which recently raised a $34M Series A led by Khosla Ventures
• Layer, an embedded accounting platform for SMBs
• InScope, which automates audited financial statement creation

But accounting is just the beginning. Mohnot believes AI will reshape the entire fintech stack.

“Financial services are incredibly labor-intensive — from underwriting and compliance to fraud detection and customer support,” he explains. “AI can handle all of it, and do so at a much lower cost.”

Beyond AI and accounting, BTV continues to invest in infrastructure and tools that power the future of finance. Notable companies in its portfolio include:

• Coast, a payments platform for truck and fleet drivers
• Relay, a cash management and online banking platform for small businesses
• Unit, a banking-as-a-service company last valued at $1.2 billion

With Fund III, the firm plans to invest in 30 to 35 companies, writing checks ranging from $500,000 to $3.5 million.

Despite the market’s cooling enthusiasm for fintech, Mohnot and co-founder Jake Gibson (also co-founder of NerdWallet) remain focused on the long game.

“Finance isn’t going anywhere. And it’s still way too manual,” Mohnot says. “We’re just getting started with the digitization — and AI is going to accelerate it.”