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#FutureFintech
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June 12 - 13, 2019
New York, NY
events.cbinsights.com/future-of-fintech
@cbinsight @cbinsight
Save with early bird pricing until Dec 31, 2018 #FutureFintech
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ABOUT THE ANALYST
63 Q&A
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9
WHAT THIS REPORT COVERS
Tools to manage bills and track Sales & trading, analysis, and infrastructure
personal and/or credit accounts tools for financial institutions
PAYMENTS/ INSURANCE
BILLING
PERSONAL CAPITAL
FINANCE MARKETS
Audit, risk, and regulatory Investment and wealth management
compliance software platforms and analytics tools
WEALTH
REGTECH MANAGEMENT
MORTGAGE/
LENDING REAL ESTATE
Marketplace lending & alternative Mortgage lending, digitization,
underwriting platforms and financing platforms
GLOBAL FINTECH
REPORT Q3 2018
9
GLOBAL FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:
$5.64 BILLION
ACROSS
375 DEALS
10
Global fintech deals are on pace for a record year
Annual VC-backed global fintech deals and financing, 2013 – 2018 YTD (Q3’18), ($B)
1,460
1,350
1,159 1,164
1,071
838
608
11
Q3’18 sees a pullback after Q2 but deals are still on
track to set record
402
387
352 375
333
317 336 329
310
291
277 279 272
245
234 239
224
198
182
167 171
$5,642
$3,338
$3,112
$2,877
$2,633
$2,434
$2,195
$1,826
$1,702
$1,296
$1,118
$20,596
$935
$5,336
$4,895
$6,307
$8,364
$5,841
$4,565
$4,405
$6,379
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
13
US maintains a narrow single digit deal lead on
Asia, despite biggest dip in 5-quarters
175
14
Africa sees deals top a new quarterly high while
conflict in South America constrains deals
Global VC-backed fintech deals by continent, Q3’17 – Q3’18
15
14
South America
12 +33% QOQ
9 9 Africa
8 +50% QOQ
6
5 5
4 4 Australia
3 +25% QOQ
2
1
15
Funding dipped in nearly every region in Q3’18
Global VC-backed fintech funding by continent, Q3’17 – Q3’18, ($M) (*Ant Financial excluded)
$782 Europe
* $2,132
$989 -10% QOQ
$2,122 $1,807
$709 Asia
$1,661 -89%* QOQ
North America
$2,089 $2,593 $2,850 $3,496 $2,938 -16% QOQ
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
*Ant Financials' $14B round in Q2’18 was excluded from the chart represented on this slide for illustrative purposes 16
Early-stage deals dropped to 5-quarter low
Quarterly deal share by stage to global VC-backed fintech companies, Q3’17 – Q3’18
12% 11%
16% 17% Other
8% 17%
8%
8% 7% 7%
Late-Stage
19% 21%
20% 20% Mid-Stage
27%
Early-Stage
106
86
80
76
82 North America
64 -25.6% QOQ
61 59
57 64
50 Asia
45 43
48 39 -21.9% QOQ
Europe
-4.4% QOQ
18
Despite the dip in deals, Asia maintains the lead
on US in early-stage investments
96
82
73
70
77 64 United States
61 59
57 -23.4% QOQ
50 59
48
45 Asia
39 43
-21.9% QOQ
Europe
-4.4% QOQ
19
The US reclaims mega-round lead over Asia
Q3’18: 12 mega-rounds ($100M+), worth a total $2.08B
7 7 7*
6 6 6
4 4 4 4
1 1 1 1 1
#AhaCBI
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description
Aug’18 // $300M $3.07B Berkshire Hathaway Mobile payments and commerce platform
($10B Valuation)
Sept’18 // $245M $1B Andreessen Horowitz, DST Global, Online payment infrastructure provider and global
($20.25B Valuation) General Catalyst, Khosla Ventures, Kleiner e-commerce enabler
Perkins Caufield & Byers, Sequoia Capital,
Tiger Global Management
Sept’18 // $225M $408M Accel, capitalG, Sequoia Capital Robotic process automation software
($3B Valuation)
Sept’18 // $146.11M $271M Boyu Capital and Sequoia Capital China China-based mobile and micropayment service
provider
22
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description
July’18 // $140M $368M Oriental Patron Financial Group, Qiming China-based fintech that provides users wealth
Venture Partners, and Warburg Pincus management and credit solutions
July’18 // $140M $316M 137 Ventures, capitalG, Dragoneer Online platform that centralizes payroll systems,
($2B Valuation) Investment Group, Emergence Capital benefits information, and core HR
Partners, General Catalyst, Kleiner
Perkins Caufield & Byers, MSD Capital, T.
Rowe Price, Y Combinator
July’18 // $115M $253M Bessemer Venture Partners, Generation Restaurant management system
($1.4B Valuation) Investment Management, Lead Edge
Capital, T. Rowe Price, Tiger Global
Management
Sept’18 // $102.25M $102M HRVC and Sinowisdom China-based e-commerce payments platform
23
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description
July’18 // $100M $143M Bain Capital Ventures, F-Prime Capital, Global payments platform
Temasek Holdings, QED Investors, Accel
Aug’18 // $100M $143M e.ventures, Kinnevik, Vitruvian Partners Open banking platform
($500M Valuation)
July’18 // $100M $159M Redpoint Ventures, Ribbit Capital, Scale Personalized auto insurance
($1B Valuation) Venture Partners, Tiger Global
Management
24
GLOBALLY THERE ARE
34 FINTECH UNICORNS
VALUED, IN AGGREGATE, AT
$117 BILLION
25
As of 10/31/18
34 fintech unicorns valued at $117B
2018 fintech companies with a private market valuation of $1B+ (10/31/18)
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA
$1.79B $4B
$1.43B
$1B $1.2-$1.6B
$1.46B
$2B $2B (as of Q2’15)
$1B
$3B $1.24B
$1B $4.5B
INDIA
$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B
26
$4B (Q4’18)
US sees new breed of fintech unicorns
2018 fintech companies with a private market valuation of $1B+ (10/31/18)
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA
$1.79B $4B
$1.43B
$1B $1.2-$1.6B
$1.46B
$2B $2B (as of Q2’15)
$1B
$3B $1.24B
$1B $4.5B
INDIA
$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B
27
$4B (Q4’18)
and mega-rounds to established startups to stay private
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA
$1.79B $4B
$1.43B
$1B $1.2-$1.6B
$1.46B
$2B $2B (as of Q2’15)
$1B
$3B $1.24B
$1B $4.5B
INDIA
$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B
28
$4B (Q4’18)
Q4’18 starts strong, minting 2 digital banking unicorns
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA
$1.79B $4B
$1.43B
$1B $1.2-$1.6B
$1.46B
$2B $2B (as of Q2’15)
$1B
$3B $1.24B
$1B $4.5B
INDIA
$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B
29
$4B (Q4’18)
GLOBAL VC-BACKED
FINTECH Q3’2018
INSURTECH
REAL ESTATE DIGITAL
BANKING
CAPITAL
ALT LENDING MARKETS
PAYMENTS REGTECH
MACROS SECTOR
TRENDS
30
GLOBAL VC-BACKED
FINTECH Q3’2018
PAYMENTS
MACROS SECTOR
TRENDS
31
Payments sees deals rebound after a slow H1’18
Global VC-backed payments fintech financing trends, Q3’17 – Q3’18, ($M)
66
62
55 55
52
ENABLING DEVELOPERS
Last Funding Stripe’s integrated technology stack for global money movement
$245M Series E // Sep’18
Valuation $20.3B
Stripe, the global payments provider, has been
aggressively expanding their tech stack. The company
plans to use the latest funding to expand into Southeast
Asia and India.
According to Bloomberg, Stripe sales are roughly $1.5B
annually. Stripe supports businesses in 120 countries,
payments in 130 currencies, and provides services
ranging from fraud prevention to accounting. Stripe
reports that 65% of UK internet users and 80% of US
GLOBAL PAYMENTS &
users have bought something from a Stripe-powered TREASSURY NETWORK
business.
RECENT PARTNERSHIPS
LAUNCHED
33
SQUARE 2.0
34
N+1 OF PAYMENTS IN EARLY PHASES
Tech: AI-powered computer vision software Tech: Hardware price tag & mobile Tech: Mobile scanner, non-RFID reader, and
powering autonomous checkout payments app payments app
Q3’18 Funding: $5.5M Seed-II Q3’18 Funding: $.04M Convertible Note Q3’18 Funding: Undisclosed
Total Funding: $10M Total Funding: $10M Total Funding: $2.2M
Select Investors: CRV, Y Combinator, Select Investors: 500 Startups, Dream Select Investors: Plug and Play Accelerator,
Initialized Capital Assembly Tech Nation Fintech
35
GLOBAL VC-BACKED
FINTECH Q3’2018
ALT LENDING
MACROS SECTOR
TRENDS
36
Alternative lending sees boost from a fresh crop of
startups focused on POS and emerging markets
Global alternative lending VC-backed financing trends, Q3’17 – Q3’18, ($M)
55
49
45 41
45
Focus: Omni-channel software for retailers to offer POS Focus: Omni-channel platform that allows merchants to offer
lending, boost sales, and increase checkout conversions. Bread their customers the ability to spread the cost of products or
integrates with sales software (Shopify, Magento). services into interest-free installments.
Differentiator: White-label & installments Differentiator: Installments
Q3’18 Funding: $60M Series C Q3’18 Funding: $15M Series A
Select Investors: RRE, Menlo, Bessemer, Kinnevik Select Investors: American Express Ventures, Mastercard
38
India sees next wave of lending startups focused
on point-of-sale to boost booming e-commerce
Select Q3’18 alternative lending deals
Focus: Omni-channel EMI payment Focus: Digital lending platform that Focus: Digital credit platform for
and digital lending platform focused enables people to pay using digital EMI, college students providing monthly
on financing electronics and without the need for a credit card or a payment plans for e-commerce
appliances. Partners include Amazon, credit score. purchases (Amazon, Flipkart)
Flipkart, Uber, and others. without collateral.
Differentiator: Card-less digital EMI
Differentiator: Multi-option EMI Differentiator: Micro-loans
Q3’18 Funding: $13.4M Series A-II
Q3’18 Funding: $30M Series C Q3’18 Funding: Undisclosed Series A
Select Investors: Omidyar Network, PayU
Select Investors: Endiya Partners, India, Ribbit Capital, Xiaomi Ventures Select Investors: FinUp Finance
Fosun RZ Capital, Sistema Asia Fund, Technology Group, Simile Ventures,
Vertex Ventures SE Asia, VenturEast Blume Ventures
39
GLOBAL VC-BACKED
FINTECH Q3’2018
REAL ESTATE
MACROS SECTOR
TRENDS
40
VC-backed fintech companies focused on real
estate are still promising despite deal dip
26
24
19
15
13
INSURTECH
MACROS SECTOR
TRENDS
44
Insurance tech funding boosted by mega-rounds
to unicorns to fuel further product expansion
Global VC-backed insurance tech financing trends, Q3’17 – Q3’18, ($M)
46
44
40
34
25
Growth strategy:
• Entering the Medicaid Advantage space by 2020
• Using in-house machine learning applications to
identify new markets to enter and at-risk patients
• Forecasted to grow to 260K members in 2018
• Expanding to Ohio in 2019 through a partnership
with Mount Carmel Health System
46
Auto carriers raise large investments in 2018 to
fuel expansion Licensed & Planned
DIGITAL
BANKING
MACROS SECTOR
TRENDS
48
Digital banking startups are cropping up
globally to challenge traditional institutions
Global VC-backed digital banking financing trends, Q3’17 – Q3’18, ($M)
20
18
13 13
10
51
WHY BANKS SHOULD CARE
3,000,000
1,500,000 1,600,000
1,046,000
796,000
600,000 600,000
450,000
200,000 210,000 250,000
100,000 120,000
Loot Lunar Greenlight Starling Tandem Varo Neon Monese Gimi Monzo N26 Chime Revolut NuBank
Financial
Source: Company’s respective press releases 52
Startups targeting the next generation of bank
customers to teach money fundamentals early
Select Q3’18 digital banking deals
Preliminary Points
Last Funding Valuation
$125M Series C // Oct’18 $1.1B
Brex is a San Francisco-based B2B financial services
company that extends credit to startups. Startups
typically do not meet financial qualifications for business
credit. Leveraging an in-house KYC and underwriting
process, Brex issues credit based on the amount of
money in the startup’s corporate bank account. B
Brex’s core products include a credit card issued in
partnership with Visa and Sutton Bank that links to a
mobile app that automatically captures, manages, and
digitizes expenses. Brex launched out of beta in June
SELECT STARTUP
2018 and reports having onboarded 1,000 customers.
CUSTOMERS
Select Investors
DST, Green Oaks Capital, Ribbit Capital,
Y Combinator, Max Levchin, Peter Thiel
54
MORE TO COME?
55
GLOBAL VC-BACKED
FINTECH Q3’2018
CAPITAL
MARKETS
MACROS SECTOR
TRENDS
56
Capital markets tech funding deals drop to five-
quarter low
Global capital markets tech VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
65
49
47
41
35
57
Emerging banking-as-a-service startups look to give
“legacy infrastructure” a fintech facelift
Last Funding
SELECT CUSTOMERS
59
OVER A DECADE IN THE MAKING, “RPA” IS THE NEW “BIG DATA”
*Industry coverage is broader than financial services and funding round not included in fintech financing 60
GLOBAL VC-BACKED
FINTECH Q3’2018
REGTECH
MACROS SECTOR
TRENDS
61
Regtech sees pullback in early-stage deals and
funding flows to established business
Global regtech VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
30
22
21
17
13
63
Incumbents jump in on data-as-a-service startups
to upgrade fraud prevention on heels of breaches
Acquired
Headquarters: UK Headquarters: US
Focus: Ongoing surveillance and AML Focus: Knowledge graphs and data mapping
compliance
Description: Enigma aggregates data into
Description: Quantexa uses big data representations of real-world relationships,
analytics to tackle complex financial providing a source of intelligence on people,
crime and data challenges within the places, and companies.
financial services, corporate, and public Headquarters: US
Q3’18 Funding: $95M Series C
sectors. Acquired Q3’18
Select Investors: BB&T, Capital One Growth
Q3’18 Funding: $20M Series B Focus: Real-time credit reporting, data
Ventures, Comcast Ventures, Crosslink Capital,
Select Investors: Albion Capital, Dawn MetLife, NEA, Partnership Fund for New York certification, and authentication services
Capital, HSBC Venture Capital City, Third Point, Two Sigma Ventures
64
Questions?
Twitter: @lcdavis1225
ldavis@cbinsights.com
65
WHERE IS ALL THIS DATA FROM?
66
APPENDIX Q3’18:
VC-backed Fintech
Regional, M&A,
and Investor Trends
67
ASIA FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:
$1.81 BILLION
ACROSS
123 DEALS
68
Asia sees deals and funding level out after
record in Q2’18
Asia VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
136
123
105
94
85
$709
$1,661 $2,122 $16,132 $1,807
69
US FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:
$2.8 BILLION
ACROSS
130 DEALS
70
US deals dip near
US fintech funding deals and funding dipped in Q3’18
5-quarter low
US VC-backed fintech financing trends, Q3’17 – Q3’18, ($B)
Early-stage deals slipped
after a record Q2’18 causing 175
157
deals to drop for the second
consecutive quarter in
130
Q3’18. 132 129
$764 MILLION
ACROSS
85 DEALS
72
Despite the dip in funding, deals in Europe jumped
driven by a fresh crop of early-stage fintechs
Europe VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
87 85
77 75
72
73
UK fintech
UK-based fintech rebounded to a 5-quarter high
recovered after
UK VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
Brexit fears stalled
quarterly deals 45
#AhaCBI
Q3’18 top exits: IPO by valuation
There were 2 fintech IPOs in Q3’18, both listed on international exchanges
IPO Q3’18 // $1.96B $373M Accel, Index Ventures, Ribbit Capital, Union Square
(LSE: FCIF) ($2.05B Valuation) Ventures, BlackRock, CreditEase Fintech
Investment Fund, DST Global, Temasek Holdings
76
Q3’18 top exits: acquisitions by valuation
Total Disclosed
Company Deal Date // Valuation Funding (M) Acquirer Description
Q3’18 // $332.31M $57M Digital marketplace with a focus on real estate and
automobiles
77
Top investors
#AhaCBI
The most active fintech VCs from Q3’17 – Q3’18
By unique fintech company investments (new or follow-on)
Rank Investor Select Fintech Investments
79
The most active fintech VCs from Q3’17 – Q3’18
By unique fintech company investments (new or follow-on)
Rank Investor Select Fintech Investments
80
Questions?
ldavis@cbinsights.com
Twitter: @lcdavis1225
81
WHERE IS ALL THIS DATA FROM?
82
cbinsights.com
@cbinsights
83