Village Ventures co-founder Matt Harris is busy preparing to become a managing director at the New York offices of Bain Capital Ventures, where he plans to explore investments in early and growth-stage companies in the financial-services sector. It is a bit of a homecoming for Harris, who started his investing career at Boston-based Bain in 1995.
In 2000, Harris co-founded Village Ventures, an early stage venture capital firm in New York that focuses on financial services and media. Some of his prior investments include On Deck Capital, iSend, and Metamarkets.
Harris spoke with Xconomy recently about his pending return to Bain, what the future holds for the financial services market, and the growing importance of New York in the venture ecosystem.
Xconomy: What does rejoining Bain’s ranks mean to you?
Harris: Homecoming is the word I’ve been using. That’s how it feels. Bain Capital was a seed investor in Village Ventures. They’ve been on my board of directors for the decade I’ve been at Village. This is going to be more intense. I don’t start until September; I’ve got a bunch of work yet to do at Village.
X: What will this move mean for you in terms of the scale of investments you will explore?
H: There are two major differences. Bain Capital Ventures is chartered and mandated to do both early stage, which I’ve focused on, and much later stage and growth-equity investing. That was something I was looking for in terms of a next step. We contemplated transitioning Village to be the kind of platform that could do both, but that’s pretty hard to do. A big part of the logic for me was the ability to invest in companies across stages. I’ve been exclusively focused on financial-services companies. When you become very sector focused, you wish you could be stage-agnostic. You see great companies in your sector. Some of them are early stage but many of them are more advanced. It’s a growing frustration not to be able to invest at a later stage. That is one thing I am excited about.
Bain Capital Ventures has a terrific footprint in financial-services as well. [Village Ventures is] with them in [payment processing technology company] TxVia. Going back to when I was there, we were the lead investor in Experian. There is a real legacy and track record in financial services. There is a guy there named Jeff Schwartz who is one of the best in the business in financial services. For me to have colleagues, in particular Jeff, who understand the dynamics going on in payments, lending, and capital markets is a real pleasure. The strategy of being a leader in financial services is made easier by the presence of multiple partners who understand it and are excited about it.
X: What is happening in the financial-services sector that gets you excited?
H: The single biggest wave of innovation is in payments. Companies like Square, Dwolla, and Google Wallet, and dozens of innovative new players are following in PayPal’s footprints in terms of changing the way consumers and businesses pay for
