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FinTech Deals Round-up: D-A-CH and Global

Opportunities for the Rafikis

Samarth Shekhar

Co-Founder, FinTech Forum DACH

9th May, 2014 | Frankfurt am Main

FinTech Forum DACH a BankITX and TechFluence initiative

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FinTech Investment Trends

• In the last 5 years… – FinTech investment tripled (~$930 mn in 2008 to ~$2.97 bn. in 2013) 1

• In the last 3 years… – Investments into FinTech grew 4x faster than VC investment overall1

• In the last year (2013)… – New FinTech-focused funds worth > $1bn were launched2

• In the last quarter (Q1-2014)… – VC investment in European FinTech companies reaches post-dotcom

high (€ 166 mn in Q1-2014 vs. €263 mn in Q2 2000) 3

1 TechCrunch: Global Fintech Investment Boom Is Benefitting London Most … 2 FinTech Forum: 1 Billion USD for new FinTech-focused funds in 2013 3 Financial News: VC investment in European fintech companies reaches post-dotcom high 4 Unquote: Fintech: throwing down the gauntlet to financial services

However, 2013 deal volume in DACH: ~2% of global vs. US (~60%), UK (~30%) 4

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Updates: FinTech Forum DACH

• Jul. 2013: Launched FinTech Forum DACH: first hub for FinTech startups, investors, banks etc. in German-speaking Europe

• Aug.-Oct. 2013: Identified 100+ FinTech startups in DACH & 50+ investors

• Nov. 2013: First FinTech startup pitch event in the region

• Jan. 2014: First weekly newsletter covering DACH FinTech startup scene

• Feb. 2014: First(-ever) Study of 100 DACH FinTech Startups

• Mar. 2014: Partner and judge at the Innotribe Startup Challenge 2014

• May 2014: DACH FinTech Startup Ecosystem: joint study with Bankstil)

In the last 4 months in D-A-CH: Pitch Days for 2 new incubators, 1 new FinTech mega-event, 1st VC Magazin FinTech Roundtable…

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Selected DACH FinTech Deals: 2011+

Credit card processing (Square rival). Rocket Internet , plus over €10 mn from New Enterprise Associates, ru.net, Holtzbrinck Ventures in 2012

SaaS Banking Software for Microfinance: $2 mn from Point Nine Capital, Runa Capital and Kizoo in 2013

Online payment startup (Stripe rival). > €14 mn from Holtzbrinck Ventures, Sunstone Capital and Blumberg Capital in 2013.

P2P lending platform. $12 mn from Index Ventures, Union Square Ventures in 2013.

* Disclosed deal amounts between 2011+ only. Sources: http://venturebeat.com/ , http://venturevillage.eu/, http://www.gruenderszene.de/, http://techcrunch.com/

Big data credit scoring/micro-lending. Multi-mn. € from Blumberg Capital, Point Nine Capital, Heiko Hubertz (Bigpoint), Samwer Brothers in 2013.

Licensed Web 2.0 Bank. JZ International, Corporate Finance Partners, Anthemis Group, Life.SREDA, founders etc.

Online credit marketplace. > € 4 mn from Privatbank Banca Sella , Earlybird, Neuhaus Partners in 2011

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Kreditech pumpt sich weitere 15 Millionen Dollar LaterPay sammelt 3 Millionen ein SevenVentures schließt Media-Deal mit Online-Banking-App Numbrs Zencap-Das neue Rocket-Startup – Lendico für den Mittelstand Crowdsource Insurance Startup Friendsurance Raises New Cash (“multi-mn.”)

Klarna Acquires Germany’s Sofort For $150M To Build A Formidable European Payment Network

E-Loan Specialist Wonga Buys BillPay, The PayPal Of Germany…

Minkabu aus Japan übernimmt sharewise

Selected DACH FinTech Deals: 2011+

* Disclosed deal amounts between 2011+ only. Sources: http://venturebeat.com/ , http://venturevillage.eu/, http://www.gruenderszene.de/, http://techcrunch.com/

2014+

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FinTech “LEGO”: global updates

• FinTech / digital banking market share expected to be 35% by 2020

• Square valued at $5B

• LendingClub (P2P lending) raised $180M, eventually valued at $2.3Bn

• eBay acquired payment and billing platform Braintree for $800M

• Sberbank set up $100 million fintech start-up fund

• Banco Santander put $6.6m+ into mobile PoS firm iZettle

• Goldman Sachs put $25M in traders’ social network MotifInvesting

• Spain's BBVA acquired online bank Simple for $117M

• Five UK banks* added new mobile payment facility Zapp to their apps

• London FinTech Accelerators: Barclays / TechStars, Level39, Startupbootcamp FinTech

• FIS acquired mobile payments firm mFoundry for $165M

• VISA invested €45M into mobile banking platform Monitise.

• First Data bought T-commerce startup Clover for $34.1M, loyalty programs startup Perka for $30M.

• BBVA announces

• Web companies, Telcos seen as the biggest threat to banks (EFMA study)

– Amazon moved into P2P and in-

store payments

• T-Mobile: your next bank in US! * Metro Bank, Santander, Nationwide, First Direct, HSBC

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Learnings / take-aways for…

• Startups: (disproportionate) opportunity, but window of 1-3 y – After US & the UK Germany/Continent “waiting to happen”

– Option 1: grow to global domination in their space

– Option 2: domestic/European market leaders (acquisition targets!)

• Investors: under-marketed but high-potential startups in DACH / Continent (vs. near-hype in US, UK) – B2C startups: “Bankenstürmer” / competitors or partners

– B2B startups: also in other sectors! (Who wanted to sell to banks in crisis?)

• Banks (in D-A-CH): if you don’t do it somebody else will: other banks, other banks in other countries, telcos, tech giants etc.)

As Rafiki advises in Lion King 1 ½ (2004), “Look beyond what you see!”