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Page 1: CBInsights and KPMG FinTech Webinar
Page 2: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

Join the conversation on TwitterShare your favorite insights & data points on Twitter

@KPMG@cbinsights#fintech

2

Page 3: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

@cbinsights

The Pulse of Fintech:2015 in ReviewThe most comprehensive data-driven look at investment trends, companies, and investors within the global fintech ecosystem.

3

Page 4: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

@cbinsights

About KPMG

4

KPMG EnterpriseYou know KPMG, you might not know KPMG Enterprise.

KPMG Enterprise advisers in member firms around the world are dedicated to working with businesses like yours. Whether you’rean entrepreneur looking to get started, an innovative, fast growing company, or an established company looking to an exit, KPMG Enterprise advisers understand what is important to you and can help you navigate your challenges – no matter the size or stage of your business. You gain access to KPMG’s global resources through a single point of contact – a trusted adviser to yourcompany. It’s a local touch with a global reach.

The KPMG Enterprise global network for innovative startups has extensive knowledge and experience working with the startup ecosystem. Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory requirements - we can help. From seed to speed, we’re here throughout your journey.

KPMG FintechIn today’s fast-paced Financial Services(FS) sector, technology-based businesses and solutions offer Financial Institutions the opportunity to telescope their appetite for innovation and create powerful new business models that can enhance bottom line performance for customers and shareholders alike. KPMG professionals use the combined strength of our renowned FS sector insight, global network of knowledge and experience and our global relationships with the Fintech startup community to help you identify the partnership, equity investment or full acquisition opportunities that are specifically focused on your needs andopportunities. Once you have made the strategic decision to transform your organization, KPMG professionals work with you toimplement your transformational agenda at the operational level and help ensure that you realize the full benefits of your fintech strategy.

Page 5: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

@cbinsights

About CB Insights

5

Backed by RSTP and the National Science Foundation, CB Insights uses data science and machine learning to help our customers predict what’s next—their next customer, their next investment, the next market they should attack, the next move of their competitor or the next company they should acquire.

The world’s leading global corporations including the likes of Cisco, Salesforce, Castrol and Gartner as well as top tier VCs including, NEA, Upfront Ventures, RRE, and FirstMark Capital rely on CB Insights to make decisions based on data, not decibels.

To make your life easier, visit http://www.cbinsights.com

”A detailed discussion of data collection and how the company parses them is written by CB Insights’ data scientists; it convincingly tells the story of scalability and accuracy for what they call “The Cruncher.”

From “Predictive Analytics And Novel Visualization Draw Customers To 'Must Have' Data” published April 8, 2015

Page 6: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

See what other customers have to say at http://www.cbinsights.com/customer-love

“Designed by a VC insider who truly knows the space and understands end-user needs.”

Greg BaeInvestments & Biz DevComcast Ventures

Jack LeeneyPortfolio ManagerTelefonica Ventures

“We're using CB Insights at Salesforce Ventures to analyze industry trends that are relevant to our strategy. It's helped improve our efficiency.”

Matt GarrattSr. Director, Corporate DevelopmentSalesforce Ventures

“CB Insights provides our team with a holistic and thematic approach that really captures market activity….we've found CBI to have the best access for the most accurate market view.”

“We have been looking for a tool that could give us the ability to track, research and identify investment opportunities. CB Insights provides this simply and in a simple, easy to use interface. The depth of information that we get is exactly what we need. Great product.”

Jonathan TudorVentures DirectorCastrol innoVentures

“CB Insights perfectly illustrates what I expect today from such online services to stay tuned to our fast-changing Tech Landscape. Accurate and up-to-date data mash-ups, intuitive UIs, smart data visualization capabilities and direct API access… all packaged together with straightforward pricing.”

Simon MencarelliSenior Manager, Strategic PlanningDassault Systems

“CB Insights' intuitive user interface, analytical capabilities, and detailed investment information create a very powerful tool for our team's research needs.”

Nate D’AnnaCorporate DevelopmentCisco

A few of our happy customersThe most publicly reference-able customers of anyone in the industry

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Page 7: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

In God we trust, all others must

bring data

7

Page 8: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 8

Page 9: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 9

IN THE NEXT 35-45 MINUTES, WE’LL COVER

1 Spotlight: BlockchainTrends and opportunities in the emerging blockchain landscape

3 Fintech trends: North AmericaInvestment and startup trends in North American fintech

4 Fintech trends: EuropeInvestment and startup trends in European fintech

5 Fintech trends: AsiaInvestment and startup trends in Asian fintech

2 The hot & crowded fintech spaceMacro trends in the global fintech landscape

Page 10: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

@cbinsights

About Our Presenters.

10

Matthew Wong,Senior Research Analyst, CB InsightsE: [email protected]

Joe Cassidy,Global Partner, Market InfrastructureKPMGE: [email protected]

Warren Mead,Global Partner & Co-leader, Fintech PracticeKPMGE: [email protected]

Page 11: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

Spotlight:Blockchain

Page 12: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

BLOCKCHAIN & BITCOIN INVESTMENT ACTIVITYTop Deals & Cities, 2015

Bitcoin & Blockchain Investment ActivityVC-Backed Companies, 2011 – 2015

Top Deals21 Inc.

$111M // Series C

Coinbase$75M // Series C

Circle Internet Financial

$50M // Series C

Top Cities

San Francisco13 Deals // $261.7M

New York

5 Deals // $26.3M

Austin5 Deals // $3.3M

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.

$3 $1 $80 $299 $474

2 4

26

75 74

0

10

20

30

40

50

60

70

80

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2011 2012 2013 2014 2015

Investments ($M) Deals

Page 13: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

BLOCKCHAIN & BITCOIN DEALS MATURE TO MID-STAGE

2015 saw the first Series C deals in the blockchain & bitcoin space to date. After taking all deal share in 2011 and 2012, seed deal share fell to 53% in 2015.

Annual Blockchain & Bitcoin Deal Share By Stage2011 – 2015

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.

100% 100%

70% 65%53%

15% 26%

18%

4%3%

7%5%

11% 6%17%

2011 2012 2013 2014 2015

Seed / Angel Series A Series B Series C Other

Page 14: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg

BLOCKCHAIN SUMMARY

• High investment levels (and growing) but:-• Lot’s of activity – though mainly peripheral adoption and experimentation

away from “coin” developments• Barriers to scale adoption in Financial / Capital Markets still remain –

standardisation, bigger regulatory challenges being resolved on incumbent technologies

• Still seen as significantly less important in the drive for immediate cost saving, than Cloud and Machine Learning technologies

• Opportunities worth immediately exploring:-• Wholesale Insurance & Specialised Lending markets (for smart contracts)• Digital Identity for KYC / Resolution Planning / Client Porting

Page 15: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 15

The hot & crowded fin tech spaceMacro trends in the global fintech landscape

Page 16: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 16

WHAT IS FINTECH?1 Lending tech

3

4

5

2

6

7

8

Payments / billing tech

Personal finance / asset management

Money transfer / remittance

Blockchain / distributed ledger

Institutional / capital markets tech

Equity crowdfunding

Insurance tech

Page 17: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 17

In 2015 VC-backed fintech companiesraised

$13.8Bacross

653 deals

Page 18: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 18

VC-BACKED FINTECH COMPANIES TAKE 73% OF OVERALL FINTECH FUNDING IN 2015VC-backed fintech companies are taking a greater portion of overall fintech investment. In 2014, VC-backed companies made up 55% of overall fintech investment dollars.

Annual Global Fintech Financing Trend VC-Backed Fintech Companies vs. Overall Fintech Investment*, 2011 - 2015

$2.1 $2.4 $2.8 $6.7 $13.8 $2.4 $2.8

$3.9

$12.2

$19.1

298397

484587

653

457

607

759

933

1162

0

200

400

600

800

1000

1200

1400

$-

$5.0

$10.0

$15.0

$20.0

$25.0

2011 2012 2013 2014 2015

VC-Backed Fintech Investment ($B) Overall Fintech Investment ($B) VC-Backed Fintech Deals Overall Fintech Deals

*Overall investment includes fintech funding by angel investors, angel groups, private equity firms, mutual funds, hedge funds, VC, corporate and corporate VC investors.

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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@cbinsights www.cbinsights.com#fintech@kpmg 19

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HOW MUCH IS FINTECH FUNDING BOOMING?Limiting the data to equity funding involving VC-backed fintech companies shows 2015 reached a multi-year high, topping 2014’s VC-backed total by 106%. Deal activity grew 11% compared to 2014 and a whopping 119% compared to 2011.

Annual Global Financing Trends to VC-Backed Fintech Companies2011 – 2015

$2.1 $2.4 $2.8 $6.7 $13.8

298

397

484

587

653

0

100

200

300

400

500

600

700

$-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

2011 2012 2013 2014 2015Investment ($B) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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@cbinsights www.cbinsights.com#fintech@kpmg 21

$Q4’15 FINTECH FUNDING SEES STEEP DROPOFF AS DEALS SEE LOWEST QUARTERLY TOTAL OF 2015After mega-rounds including a $1B round to marketplace lender SoFi buoyed Q3’15, fintech funding cooled off in Q4’15. Funding fell 64% amid a drop in $100M+ round activity vs. the previous quarter, while deal activity fell 7%.

Quarterly Global Financing Trends to VC-Backed Fintech CompaniesQ1’11 – Q4’15

$0.6 $0.6 $0.4 $0.5 $0.7 $0.5 $0.7 $0.5 $0.5 $0.5 $0.8 $0.9 $1.5 $1.7 $1.1 $2.4 $2.5 $4.9 $4.7 $1.7

85 83

63 67

92101

92

112 10699

136143

135

153143

156165 169 165

154

0

20

40

60

80

100

120

140

160

180

$-

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Investments ($B) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 22: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 22

MEGA-ROUNDS A HUGE CONTRIBUTOR TO FINTECH’S 2015 BOOM, BUT SLOWING DOWNBoth North America and Asia saw a significant rise in fintech mega-rounds in 2015. After taking fewer than 10 $50M+ deals between 2011 and 2014, Asia saw 17 $50M+ deals to venture-backed fintech startups.

$50M+ Financings to VC-Backed Fintech CompaniesNorth America vs. Asia vs. Europe, 2011 - 2015

2 35

29

38

1 1

7

17

24

8

2011 2012 2013 2014 2015

North America Asia Europe

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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@cbinsights www.cbinsights.com#fintech@kpmg 23

CORPORATES PARTICIPATE IN 1 of EVERY 4 FINTECH DEALSIn the past three quarters, corporations and their venture arms have participated in 25%+ of all global deal activity to VC-backed fintech companies.

Corporate Participation in Global Deals to VC-backed Fintech CompaniesQ4’14 – Q4’15

74% 79% 75% 74% 75%

26% 21% 25% 26% 25%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Other Investors Corp / CVC Deal Participation

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 24: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 24

19 FINTECH UNICORNS AND RISINGThe number of billion-dollar private companies within fintech has grown to 19 valued in aggregate at $58.7B globally. 14 fall in either the lending or payments space.

Global Fintech Unicorns By Valuation$B

Source: https://www.cbinsights.com/blog/fin-tech-payments-lending-unicorns/

Page 25: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 25

VC-BACKED PAYMENTS TECH FUNDING FALLS IN Q4’15

Payments Tech Investment ActivityVC-Backed Companies, Q4’14 – Q4’15

$1,019 $639 $931 $1,141 $203

3639

3230

45

0

5

10

15

20

25

30

35

40

45

50

$-

$200

$400

$600

$800

$1,000

$1,200

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investment ($M) Deals

Top DealsOne97 Communications

$575M // Corporate Minority

Affirm$275M // Series B

Zuora$115M // Series F

Top CountriesUnited States

60 Deals // $920.7M

India21 Deals // $1.39B

United Kingdom20 Deals // $291.3M

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 26: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 26

VC-BACKED LENDING TECH SEES DEALS AND DOLLARS DROP IN Q4’15

Lending Tech Investment ActivityVC-Backed Companies, Q4’14 – Q4’15

Top Deals

Top Countries

$317 $438 $754 $2,009 $383

11

22

15

21

12

0

5

10

15

20

25

$-

$500

$1,000

$1,500

$2,000

$2,500

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investments ($M) Deals

SoFi$1.35B // Series E

Avant$325M // Series E

DianRong$207M // Series H

United States36 Deals // $2.72B

China10 Deals // $538M

United Kingdom7 Deals // $249.2M

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 27: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 27

EARLY-STAGE INSURANCE TECH DEALS HEAD TOWARD RECORD HIGHFintech investors are focusing their attention on coming tech innovation and disruption in the insurance industry.

Early-Stage Insurance Tech Investment TrendSeed/Series A, Jan 1, 2011 – Mar 8, 2016

Source: https://www.cbinsights.com/blog/early-stage-insurance-tech-record/

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@cbinsights www.cbinsights.com#fintech@kpmg 28

FINTECH EXITS FALLThe amount of fin tech M&A has increased but fell back in Q4’15.

Fintech Exit ActivityQ1’14 – Q4’15

NOTABLE RECENT EXITS

$4.7 Billion Q4’15 (IPO)

$2.9 BillionQ4’14 (IPO)

$1.3 BillionQ4’14 (IPO)

Page 29: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 29

FINTECH IPOs UNDERPERFORMING THE U.S. MARKETSquare, OnDeck Capital, and Lending Club have all underperformed the S&P 500 since their IPOs.

Fintech IPO PerformanceLending Club, OnDeck Capital, Square

Page 30: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 30

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@cbinsights www.cbinsights.com#fintech@kpmg 31

THE BUSINESS SOCIAL GRAPHThe Business Social Graph lets you visualize the investment, acquisition, competitor, partner & customer relationships between players in a space. It makes mapping and understanding an ecosystem dead simple.

The Business Social Graph

Source: https://www.cbinsights.com/blog/financial-services-bitcoin-investors/

Page 32: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 32

VC INVESTORS ARE TAKING AN INCREASING INTEREST IN FINTECHOver 200 investors in fintech in 2010. Now, there are over 900. Investors see blood.

Investors in Fintech: Then and Now2010 vs. 2010-2016

Source: https://www.cbinsights.com/business-social-network

2016YTD

Page 33: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 33

FINTECH IS ALSO ATTRACTING NON-FINANCIAL SERVICES CORPORATIONS (UNUSUAL SUSPECTS)Google Ventures is among the most active investors overall in fintech.

Corporate Investor Fin Tech Investments / Acquisitions

Page 34: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 34

GLOBAL CORPORATES ALSO INTERESTED IN FINTECH Activity is not restricted to US corporations. SoftBank led a $1B financing round to student loan refinancing marketplace SoFi in August at a $4B valuation.

Corporate Investor Fin Tech Investments / Acquisitions

Page 35: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 35

CITIGROUP, GOLDMAN SACHS LEAD MAJOR BANK INVESTORS INTO VC-BACKED FINTECH STARTUPSCitigroup and its venture arm, Citi Ventures, have been the most active major bank investor over the past 5 years, followed by Goldman Sachs, which has made investments into Circle Internet Financial, Motif Investing and Square, among others.

Major Bank Investments to VC-backed Fintech Companies2011-2015

13

10

5

3 32 2

Citigroup Goldman Sachs JPMorgan Chase Morgan Stanley Wells Fargo Bank of America Credit Suisse

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 36: CBInsights and KPMG FinTech Webinar

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ANALYZING JP MORGAN CHASEJPM’s latest fintech investments reflect excitement over the prospects of blockchain.

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@cbinsights www.cbinsights.com#fintech@kpmg 37

ANALYZING GOLDMAN SACHSGoldman Sachs is one of the most active fintech investors among financial services players.

Page 38: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 38

THE UNBUNDLING OF A BANK

Source: https://www.cbinsights.com/blog/disrupting-banking-fintech-startups/

Page 39: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 39

THE UNBUNDLING OF A BANK – INTL EDITION

Source: https://www.cbinsights.com/blog/disrupting-european-banking-fintech-startups/

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THE INCUMBENT RESPONSE

Partner Acquire

Invest

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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@cbinsights www.cbinsights.com#fintech@kpmg 42

DIGITAL BANKING FUNDING HAS JUMPED MORE THAN 10X SINCE 2010

Source: https://www.cbinsights.com/blog/disrupting-european-banking-fintech-startups/

Investment plunged into personal digital banking startups in 2015 including SoFi, Avant, and Betterment.

Global Digital Banking Annual Financing Trend$M, 2010 - 2015

Page 43: CBInsights and KPMG FinTech Webinar

@cbinsights www.cbinsights.com#fintech@kpmg 43

THE GROWING CROP OF FINTECH STARTUPS FOR MILLENNIALS

Fintech startups targeting Millennials have attracted $3.7B in funding across more than 150 deals over the last five years. Whether in stock trading, consumer lending, personal savings or buying insurance, startups are innovating with the importance of this demographic and investors are paying attention.

Source: https://www.cbinsights.com/blog/fin-tech-startups-millennials/

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EARLY-STAGE DOLLARS CONTINUE TO PILE INTO FINTECH

While deals tapered off in 2015, early-stage fintech funding (Seed/Series A) rose to another record high at $1.73B.

Financing Trend to Early-Stage Fintech Companies2011 - 2015

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Fintech trends:North America

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MEGA-ROUNDS BUOY NORTH AMERICA FINTECH FUNDING TO $7.67B ACROSS 378 DEALS IN 2015

In North America, 2015 reached a 5-year funding high for fintech, reaching $7.67B across 378 deals buoyed by mega-rounds to SoFi, Affirm, and Credit Karma among others. Funding was up 73%, while deals rose 6% versus the previous year.

North American Annual Financing Trends to VC-Backed Fintech Companies2011 – 2015

$1.6 $1.8 $2.2 $4.4 $7.7

237271

328355

378

0

50

100

150

200

250

300

350

400

$-

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

2011 2012 2013 2014 2015

Investment ($B) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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OVERALL INVESTMENT TO VC-BACKED NORTH AMERICAN FINTECH STARTUPS PLUNGES IN Q4’15

North American Quarterly Financing Trends to VC-Backed Fintech CompaniesQ4’14 – Q4’15

$1.6 $1.7 $2.3 $2.7 $0.9

99 97103

89 89

0

20

40

60

80

100

120

$-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investment ($B) Deals

Deal activity to VC-backed North American fintech companies in Q4’15 matched Q3’15’s low of 89 deals. While funding rose to $2.7B in Q3’15, Q4’15 saw a major drop-off, falling 64% versus Q3’15 to under $1B.

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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LATE-STAGE FINTECH DEAL SIZES COME BACK TO EARTH IN NORTH AMERICA IN Q4’15

North American Late-Stage Fintech Deal SizeQ4’14 – Q4’15

After mega-rounds including SoFi’s $1B financing pushed Q3’15’s median deal size to $75.0M, median late-stage deal sizes fell back in Q4’15 to $38.0M.

$57.0

$32.3 $40.0

$75.0

$38.0

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Median Late-Stage Deal Size ($M)

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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SERIES B DEAL SHARE RISES TO 5-QUARTER HIGH AS SEED DECREASES

North American Quarterly Deal Share by StageQ4’14 – Q4’15

In Q4’15, Series B activity took 22% of all fintech deals in North America, a 5-quarter high. VC-backed seed deal share in fintech fell to 27% in the same quarter, matching a 5-quarter low.

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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CORPORATE DEAL SHARE OF VC-BACKED NORTH AMERICAN FINTECH COMPANIES RISES FROM Q3

CVC Participation in North American Deals to VC-Backed Fintech Companies Q4’14 – Q4’15

After dropping to 18% in Q3’15, corporate investor participation in VC-backed fintech deals rose in Q4’15 to 25%. Corporates have participated in 20%+ of all North American fintech deals in 4 of the past 5 quarters.

77% 80% 74%82% 75%

23% 20% 26%18% 25%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Other Investors Corp / CVC Deal Participation

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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THE MOST ACTIVE VC INVESTORS IN NORTH AMERICAN FINTECH

Most Active VC Firms in North America Fintech Companies2011 – 2015

Rank Investor Rank Investor1 Andreessen Horowitz 9 Spark Capital

2 SV Angel 10 Kleiner Perkins Caufield & Byers

3 500 Startups 11 Blockchain Capital

3 Google Ventures 12 QED Investors

5 RRE Ventures 13 New Enterprise Associates

6 Khosla Ventures 13 General Catalyst Partners

7 First Round Capital 15 Crosslink Capital

7 Plug and Play Ventures

Andreessen Horowitz has been the most active investor in North America fintech companies since 2011, followed by SV Angel, 500 Startups, and Google Ventures.

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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CALIFORNIA VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

California Fintech Investment ActivtyVC-Backed Companies, Q4’14 – Q4’15

Top Deals

Top Cities

$635 $1,177 $1,795 $1,522 $623

35

4752

35 34

0

10

20

30

40

50

60

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investment ($M) Deals

San Francisco79 Deals // $3.7B

Palo Alto

12 Deals // $322.9M

Los Angeles8 Deals // $156.5M

SoFi$1B // Series E

Zenefits$500M // Series C

Affirm$275M // Series B

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 54: CBInsights and KPMG FinTech Webinar

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NEW YORK VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

NY Fintech Investment ActivtyVC-Backed Companies, Q4’14 – Q4’15

Top Deals

$46 $97 $74 $162 $122

15

8

15 15

17

0

2

4

6

8

10

12

14

16

18

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investment ($M) Deals

Betterment$60M // Series D

ShopKeep$60M // Series D

CommonBond$35M // Series B

Top Cities

New York

50 Deals // $442.4B

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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Fintech trends:Europe

Page 56: CBInsights and KPMG FinTech Webinar

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VC-BACKED EUROPEAN FINTECH FUNDING HITS NEW HIGHVC-backed fintech companies in Europe raised $1.48B in funding across 125 deals in 2015. It was the second straight year of $1B+ invested in European fintech companies as deal activity rose 30% on a year-over-year basis.

European Annual Financing Trends to VC-Backed Fintech Companies2011 – 2015

$360 $270 $246 $1,111 $1,477

35

70 70

96

125

0

20

40

60

80

100

120

140

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2011 2012 2013 2014 2015

Investment ($M) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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FINTECH FUNDING AND DEALS IN EUROPE DROP IN Q4’15Q4’15 a 5-quarter funding low in Europe as funding activity fell 31% from the quarter prior. Deals have trended at 30+ to VC-backed fintech companies for the past 4 quarters.

European Quarterly Financing Trends to VC-Backed Fintech CompaniesQ4’14 – Q4’15

$379 $344 $384 $442 $306

21

30 30

3431

0

5

10

15

20

25

30

35

40

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Investment ($M) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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EUROPEAN FINTECH SEED DEAL SHARE SPIKES IN Q4’15Seed deal share in European fintech companies rose for the second consecutive quarter to 42% in Q4’15. Series A activity took one-fifth of all fintech deals in Q4’15, after taking 30%+ of all deals in 3 of the past 4 quarters.

European Quarterly Deal Share by StageQ4’14 – Q4’15

33%23% 23% 29%

42%

38%

30%40%

18%

19%

14%

20%10%

24%3%

7% 10% 9%6%

5%3% 3% 9%

6%

3%6%

10% 17% 10% 12% 16%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Seed / Angel Series A Series B Series C Series D Series E+ Other

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 59: CBInsights and KPMG FinTech Webinar

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CORPORATE PARTICIPATION IN EUROPEAN FINTECH DEALS DROPS TO 10% IN Q4’15While corporates participated in one-quarter of all deals to VC-backed fintech companies, participation was much smaller in Europe, where corporate participation has fallen below 15% in 4 of the past 4 quarters outside of a rise in corporate participation in Q3’15.

CVC Participation in European Deals to VC-Backed Fintech CompaniesQ4’14 – Q4’15

86% 86% 90%72%

90%

14% 14% 10%28%

10%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Other Investors Corp / CVC Deal Participation

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 60: CBInsights and KPMG FinTech Webinar

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INDEX VENTURES, BALDERTON ARE MOST ACTIVE VC INVESTORS IN EUROPEAN FINTECHNo investor was more active in European fintech since 2011 than Index Ventures and Balderton Capital, which invested in Transferwise, Funding Circle and iZettle among others. Accel Partners rounded out the top three most active European fintech VCs.

Most Active VC Investors in European Fintech Companies2011 - 2015

Rank Investor Rank Investor1 Index Ventures 8 Point Nine Capital

1 Balderton Capital 8 83North

3 Accel Partners 8 Draper Esprit

4 Northzone Ventures 8 Route 66 Ventures

4 Octopus Ventures 13 Anthemis Group

4 Holtzbrinck Ventures 13 Passion Capital

4 SpeedInvest 13 Notion Capital

8 High-Tech Gruenderfonds 13 General Atlantic

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

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UK VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

UK Fintech Investment ActivtyVC-Backed Companies, 2011-2015

$162 $158 $101 $409 $962

16

31 32

42

61

0

10

20

30

40

50

60

70

$-

$200

$400

$600

$800

$1,000

$1,200

2011 2012 2013 2014 2015

Investment ($M) Deals

Top DealsFunding Circle

$150M // Series E

Atom Bank

$128M // Series B

WorldRemit

$100M // Series B

London50 Deals // $743.7M

Top Cities

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 63: CBInsights and KPMG FinTech Webinar

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WITHIN FINTECH, INVESTORS TURN EYE TO DIGITAL CHALLENGER BANKSAtom Bank, Mondo, Tandem, and Fidor are among the investor-backed digital banking startups in the UK applying for or with full banking licenses.

Select Digital Challenger Banks & NeobanksBy total disclosed funding

Page 64: CBInsights and KPMG FinTech Webinar

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GERMANY VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

Germany Fintech Investment ActivtyVC-Backed Companies, 2011 - 2015

Top Cities

$13 $18 $44 $101 $193

5

9

12

15

21

0

5

10

15

20

25

$-

$50

$100

$150

$200

$250

2011 2012 2013 2014 2015

Investment ($M) Deals

Kreditech$92.2M // Series C

Raisin$22M // Series B

Smava$16M // Series C

Top Deals

Berlin10 Deals // $79.1M

Hamburg5 Deals // $109.7M

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 65: CBInsights and KPMG FinTech Webinar

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Fintech trends:Asia

Page 66: CBInsights and KPMG FinTech Webinar

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ASIA: 2015 FINTECH FUNDING TOPS $4.5B; QUADRUPLES 2014 TOTALFunding to VC-backed fintech companies in Asia exploded to hit $4.52B in 2015 across 130 deals. The spike was attributed to a notable rise in $50M+ fintech deals, which included One97, Dianrong, and BankBazaar, among others.

Asian Annual Financing Trends to VC-Backed Companies2011 – 2015

$0.2 $0.3 $0.3 $1.1 $4.5

21

49

71

119130

0

20

40

60

80

100

120

140

$-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2011 2012 2013 2014 2015

Investment ($B) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 67: CBInsights and KPMG FinTech Webinar

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ASIAN FUNDING DOLLARS TO VC-BACKED FINTECH COMPANIES DIVE IN Q4’15After hitting $1B+ in both Q2’15 and Q3’15, Asian fintech funding fell $1B in Q4’15 from the quarter prior. The steep drop of 75% came despite a smaller decrease of just 18% in deal activity.

Asian Quarterly Financing Trends to VC-Backed CompaniesQ4’14 – Q4’15

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 68: CBInsights and KPMG FinTech Webinar

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EARLY-STAGE FINTECH DEALS RISE FOR FOURTH STRAIGHT QUARTER IN Q4’15The median early-stage fintech deal size in Asia rose for the fourth straight quarter to $4.5M in Q4’15. The Q4’15 deal size high was 543% larger than the median early-stage fintech deal in the same quarter last year.

Asian Early-Stage Deal SizeQ4’14 – Q4’15

$0.7

$2.3 $2.5

$3.5

$4.5

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Median Early-Stage Deal Size ($M)

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 69: CBInsights and KPMG FinTech Webinar

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ASIAN FINTECH SEED DEAL SHARE FALLS TO FIVE-QUARTER LOWAs fintech emerges in Asia, deal activity has shifted toward the mid-stage as Q4’15 saw Series B and Series C stage activity combine to take 29% of activity. In the same quarter, fintech seed deal share fell to a 5-quarter low of 16%.

31%39%

26% 19% 16%

31%25%

26%31% 35%

22% 22%

11% 22% 19%

3%

11%

14% 10%7%3%

3% 3%3%

6% 3%

10% 11% 16% 8% 13%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Seed / Angel Series A Series B Series C Series D Series E+ Other

Asian Quarterly Fintech Deal Share by StageQ4’14 – Q4’15

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 70: CBInsights and KPMG FinTech Webinar

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ASIAN CORPORATES REMAIN ACTIVE, ACCOUNT FOR 40% OF ALL FINTECH DEALSWith the presence of Alibaba, Tencent, Baidu, Rakuten and others, corporates participated in 40% of all financing deals to Asian VC-backed fintech companies in Q4’15. Corporates participated in nearly half of all deals to VC-backed fintech companies in Q3’15.

59%69%

58% 53% 60%

41%31%

42% 47% 40%

Q4'14 Q1'15 Q2'15 Q3'15 Q4'15

Other Investors Corp / CVC Deal Participation

CVC Participation in Asian Deals to VC-Backed Fintech CompaniesQ4’14 – Q4’15

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 71: CBInsights and KPMG FinTech Webinar

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ACCEL PARTNERS, EAST VENTURES, SEQUOIA CHINA TOP MOST ACTIVE ASIAN FINTECH VCsThere was a three-way tie for most active VC in Asian fintech companies since 2011 between Accel Partners, East Ventures, and Sequoia Capital China. 500 Startups and Sequoia India rounded out the top 5.

Most Active VC Investors in Asian Fintech Companies2011 - 2015

Rank Investor Rank Investor1 Accel Partners 7 IDG Capital Partners

1 East Ventures 10 Blume Ventures

1 Sequoia Capital China 10 GMO Venture Partners

4 500 Startups 10 Jungle Ventures

4 Sequoia Capital India 10 AppWorks Ventures

6 Life.Sreda 10 Kalaari Capital

7 Golden Gate Ventures 15 Mitsubishi UFJ Capital

7 CyberAgent Ventures

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 72: CBInsights and KPMG FinTech Webinar

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CHINA VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

China Fintech Investment ActivtyVC-Backed Companies, 2011 - 2015

Top Cities

Top DealsZhong An

$931M // Private Equity

Lu.com$485M // Private Equity

Dianrong$207M // Series C

Beijing12 Deals // $704M

Shanghai5 Deals // $1.6B

Shenzhen2 Deals // $127M

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 74: CBInsights and KPMG FinTech Webinar

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INDIA VENTURE-BACKED FINTECH INVESTMENT ACTIVITY

India Fintech Investment ActivtyVC-Backed Companies, 2011 - 2015

Top Cities

Top DealsOne97

$680M // Corporate Minority

BankBazaar$60M // Series C

PolicyBazaar$40M //Series D

Bangalore11 Deals // $57M

Mumbai9 Deals // $79M

Gurgaon6 Deals // $32M

$31 $17 $24 $247 $1,502

7

1517

25

43

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2011 2012 2013 2014 20150

5

10

15

20

25

30

35

40

45

50

Investment ($M) Deals

Source: KPMG, CB Insights Pulse of Fintech: 2015 Year in Review

Page 75: CBInsights and KPMG FinTech Webinar

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@cbinsights

About Our Presenters.

75

Matthew Wong,Senior Research Analyst, CB InsightsE: [email protected]

Joe Cassidy,Global Partner, Market InfrastructureKPMGE: [email protected]

Warren Mead,Global Partner & Co-leader, Fintech PracticeKPMGE: [email protected]

Page 76: CBInsights and KPMG FinTech Webinar

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FOR ALL DATA INQUIRIES EMAIL CB INSIGHTS [email protected]

TO CONNECT WITH A KPMG ADVISER IN YOUR REGION EMAIL [email protected]

kpmg.com/fintechpulse [website]@kpmg [Twitter]

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