things and how retailers accept payments. That wave of innovation is cresting right now. We’ve been working on these themes for five or six years, but now I think it’s quite mainstream. That’s been exciting. There is still a lot of early stage opportunity, but there are some companies that have some real scale now.
The next wave, it’s already begun, is around lending. The banks in the U.S and globally have retreated from any kind of lending that is other than plain-vanilla mortgage lending, student loans, or auto lending. There are areas in the credit world such as small-business credit or other types of consumer lending that are really hungry for capital. There are challenges to investing in lending companies; you have to be very careful. We have a company called On Deck Capital [in our portfolio] at Village that’s been phenomenally successful in the small-business lending area. Whether it’s looking at new credit information sources or new processing platforms it doesn’t have to be investing in lenders themselves. I see a big opportunity over the next five to ten years in and around the lending business.
X: How does that fit with the growing New York scene?
H: It is definitely a core strength of New York. It is highly logical that New York, which is home to so many banks and investment banks, becomes a place where financial-service innovation takes place. There is also a fair bit happening in Boston and Palo Alto and San Francisco. I’m glad to have colleagues in those markets to work with. There is a lot happening in New York outside of financial services. Traditional media has its home here, and then you have companies like Tumblr and Foursquare, which are changing the face of social media. New York is just beginning to take its rightful place in the ecosystem. It’s very exciting to watch.
X: How does Bain Capital Ventures plan to evolve in New York?
H: Bain Capital has had a New York office for a long time in midtown. The partnership has decided to get a new office for the venture group downtown near Union Square. That’s a big statement and recognition of where the venture economy is and the real urgency to be at the heart of that. Bain Capital Ventures has 20 companies [in its portfolio] in New York. It’s already been an existing area of focus, but they’ve been serving it from Boston with a lot of partners flying down on Delta shuttles. That will continue because there are talented Boston-based investors who are going to do media, e-commerce, and health care investing in New York. But it’s a statement that New York is sufficiently important that you’ve got to have a permanent meaningful presence downtown.
