Professional Documents
Culture Documents
Research Brief
Page
13
14
17
28
32
35
The Boom in Global Fin Tech Investment Fin Tech Grabs $3B
in 2013
38
40
tranched Series A deals. The largest single funding round in the space goes
to Blockchains $30.5M round led by Lightspeed Venture Partners and
Wicklow Capital. BitPays $30M round from Index Ventures, AME Cloud
Ventures, Felicis Ventures and Founders Fund among others came in a close
second.
Top Investors
Perhaps not surprisingly, Union Square Ventures which is where Pease
works, was invested in the highest number of companies (9) on the list
including Coinbase, SigFig and Funding Circle. A list of VC investors, outside
of USV, who have invested in four or more of the bank disaggregation
companies since 2009 is below.
10
Intel Capital
Google Ventures
eBay (PayPal)
MasterCard Worldwide
American Express
11
Visa
Qualcomm Ventures
SK Telecom Ventures
SingTel Innov8
Motorola Solutions Venture Capital
12
13
Intuit has acquired more companies in 2014 than any of the past 5
years. We analyze their acquisition activity, industry focus, and
geographic areas of focus.
Intuits inclusion on our Periodic Table of Tech surprised some folks so we
dug into the data a bit. But as our ranking of top tech acquirers highlighted,
the firm has been on an acquisition tear over the past two years having done
more acquisitions since 2013 than the previous 5 years combined. Intuits
CEO recently stated that their increased acquisitions are a step towards the
companys mission To be the operating system behind small business
success.
We used CB Insights Acquirer Analytics to analyze the small business
software companys increased M&A deal activity.
The data below.
2014 already breaks acquisition highs for Intuit
After 9 acquisitions from 2008-2012, Intuit acquired 6 companies in 2013,
and has acquired 8 thus far in 2014, the highest single-year tally in the past
10 years. The largest transaction for Intuit thus far this year came in the
form of a $360M acquisition of Check, a mobile bill pay company. This is the
second largest reported acquisition for Intuit since 2008, with the 2012
$423.5M deal to acquire Demandforce holding the top spot.
14
15
16
As the graph below highlights, deal activity to the funding space has
consistently grown over the last 5 years. With almost 230 deals last year,
the space saw deals climb 8% from 2012 and 171% since 2009.
17
The quarterly funding activity chart shows the general growth in deal activity
and the influence of large deals on the overall funding tallies. Q1 2014 was a
breakout quarter for payments tech with almost $700M in venture financing,
owing to a few notable deals including Stockholm-based Klarna, which has
seen heavy investment from Sequoia Capital, and which raised 90M
($121M) in a growth equity round and Stripe, which raised $80M in Series C
funding at a valuation of $1.75B.
19
20
21
22
Early-Stage Investors
Not surprisingly, 500 Startups also tops the list of early-stage payments tech
investors, as all 14 of its investments in the industry were at the seed stage.
SV Angel and Accel Partners tied for second-most investments in the
payments space. Its interesting to note that had incubators been included, Y
Combinator would also have ranked #2 on the list below.
23
Mid-Stage Investors
Balderton Capital, the European division of Benchmark Capital until 2007,
has been the most active investor in mid-stage payments companies. The
London-based VC has invested in several startups in the payments industry
since 2009, including Wonga, LevelUp, and EWise.
24
Late-Stage Investors
Sequoia Capital, DAG Ventures, FTV Capital, Doll Capital Management, and
TTV Capital led investment in late-stage payments tech among VCs. With
the exception of TTV, all are based in California.
Exit Activity
The payments tech industry saw a decline to about 50 exits last year, down
from a peak of 69 exits in 2012. Acquisitions make up the vast majority of
25
exit activity within the industry. Notable industry exits include Braintree,
which provides ecommerce payments platforms and was acquired by eBays
Paypal business unit last year for $800M and Xoom Corporation, an instant
money transfer service that IPOd.
eBay/PayPal have been the top acquirer of payments tech companies in the
past several years, buying six companies since 2009. Google, American
Express, and Intuit also bought several companies in that time. The diversity
of acquirers underscores the players, both new and old, attacking the
payments space.
Notes:
This analysis includes private company investments in the payments tech
industry by venture capital firms, corporations, corporate venture investors,
26
27
Which areas within Fin Tech are top VCs bullish on?
Using the CB Insights Business Social Graph, we visualized the universe of
Fin Tech companies that the 12 VC firms have invested in since 2007 and
find hundreds of deals within Fin Tech that the top firms have participated
in.
29
While Fin Tech investments span a diverse array of companies ranging from
payments to asset management to personal financial management, there
appear to be several themes that these brand-name venture firms see
opportunities in. When we use the Business Social Graph inputs and cluster
companies by focus area, four markets emerge as being consistent areas of
focus among the top 12 venture firms. These include
Lending
Personal finance management
Payments technology
Bitcoin
30
31
33
Motivations and strategy aside, it is clear that American Express has bought
into its venture strategy more than its competitive peers. The NYC-based
payments behemoth has in 19 deals in the last 2 years versus Visa and
Mastercard which have combined for a total of 6 deals. Whether American
Express strategy of actively investing in companies far afield from its core
business proves prescient or ill-advised remains to be seen.
34
35
36
37
Accenture's new report 'The Boom in Global Fin Tech Investment' highlights
that global fin tech financing has tripled over the past five years with UK and
Ireland-based companies taking the lion's share of Europe's Fin Tech deals.
Global investment in financial technology or Fin Tech has more than tripled
during the last five years. And among the growing global centers of Fin Tech
investments is the U.K. and, more specifically, London.
Those are among the many highlights of Accentures new report The Boom
in Global Fin Tech Investment: A new growth opportunity in London. Using
CB Insights data, the report offers insightful commentary and analysis
around Fin Techs growth trajectory and the emergence and opportunities
of London as Europes Fin Tech capital. Below are some highlights in the
Accenture report. The entire 16-page report can be downloaded for free by
logging into CB Insights and visiting the Research tab. If you dont have an
account, you can create one for free here.
Global Fin Tech investments hit $3B in 2013
With innovation enabled by new consumer behaviors, technology and
regulations, 2013 saw private Fin Tech companies raise nearly $3 billion
more than tripling the $930M invested globally in Fin Tech in 2008.
38
39
While demand for both crowdfunding and P2P lending platforms has grown,
funding dollars have primarily accrued to a small group of well-funded P2P
lending platforms including Lending Club, Prosper Marketplace and Funding
Circle.
Betaworks unveiling of its new Alphaworks investment platform this week
was the latest effort bolstering crowdfunding as a legitimate and even
mainstream alternative for financing. Of course, crowdfunding also has wellknown players like Kickstarter and Indiegogo as well.
Venture capital investors are playing a big role in the rise of alternative
financial services putting funding dollars toward both crowdfunding (equity,
donation, reward etc.) as well as peer-to-peer lending platforms, matching
individual borrowers and unrelated lenders or peers.
Demand for both crowdfunding and P2P lending platforms has grown but as
the chart below highlights, P2P lending platforms have raised nearly $715M
vs. $237M to crowdfunding platforms since 2009.
40
The most well-funded P2P lending company is Lending Club, which counts
investors including Norwest Venture Partners, Canaan Partners and Union
Square Ventures and is currently valued at $3.8B and is a Tech IPO Pipeline
company. Chinese P2P lending company Renrendai announced a mega
$130M round led by Trustbridge Partners in January. Other P2P lending
startups that have raised $25M+ just since 2009 include UK-based Funding
Circle, Benchmark Capital-backed Prosper Marketplace and Zopa, which
raised a $25M round from hedge fund Arrowgrass Capital Partners last
month.
There have been some notable VC financings in the crowdfunding space. Just
last month, online crowdfunding platform Indiegogo raised a notable $40M
round from investors including Kleiner Perkins Caufield & Byers and
Institutional Venture Partners. Equity crowdfunding platform Angellist
raised $24M last year at a rumored $150M valuation.
Interestingly, Union Square Ventures-backed KickStarter is among the most
prominent crowdfunding platforms but last raised funding 48 months ago so
will be one to watch in the coming months.
41