disruption in financial services? a silicon valley perspective

Disruption in Financial Services?

A Silicon Valley PerspectiveMay 2016

NEA is the Largest VC Firm in the World

Founded in 1978 $16.8 billion in committed capital across 15 funds Currently investing out of $3.1 billion NEA 15, the largest VC fund ever

raised Global presence: Menlo Park, CA; Chevy Chase, MD; Shanghai & Beijing,

China; and Mumbai, India 500+ funded companies 200+ IPOs and >300 M&A exits since inception 20 IPOs in 2014 and 2015

Our Partners Build Transformational Companies

Why does the world favor disruptors?

VS

5

Innovators are Riding Multiple Waves…

The 4 Major Pillars of Financial Services Disruption

MillennialBehavior

NewPlatforms

Big Data

FavorableRegulation

The “Unbundling” of Financial Services

Sources: Tom Loverro and Plaid

8© 2016 NEA CONFIDENTIAL

Genius or Insanity?

Disruption is a Leap of Faith…

Source: CB Insights

2011 2012 2013 2014 20152.1 2.4 2.8

6.7

13.8298397

484587

653Annual Global FinTech Financing

VC-Backed FinTech Investment ($Bn) VC-Backed FinTech Deals

>$25 Billion in VC Investment in FinTech in 5 Years

How is P&C Insurance Changing?

Car Insurance By the Mile, 100% Mobile Distribution

How is Asset Management Changing?

100% Mobile, Free Trading, No Customer Acquisition Cost

Over $2B in transactions in

12 months!

Data First Health Plans, Personalized for Self Insured Companies

How is Health Insurance Changing?

The ACA will force ~300,000 businesses to self-insure…

How is Banking Changing?

>7 Billion

transactions collected

in18 months!

Any App to Any Bank, One Platform

Key Considerations for Evaluating Disruptors

What are their core competitive advantages?- Technology? Regulation? User experience?

What segment of the market are they attacking?- Is it an unprofitable niche or disruptive innovation?

When will they impact your core business?- Can you afford to ignore them now?

Understand Your “Existential” Threat

Modernize Distribution Across Channels

Old Salesforce Modern Reps

VS

Embrace New Technology to Compete

Archaic Technology Modern IT

VS

Partner with Best-of-Breed Vendors

Thank you!jsakoda@nea.com

@jonsakoda