THE Q VC FINTECH INVESTMENT LANDSCAPE. November 2016

Transcription

1 THE Q3 016 VC FINTECH INVESTMENT LANDSCAPE November 016

2 THE 016 VC FINTECH INVESTMENT LANDSCAPE 016 has seen 839 deals globally attracting $15.bn of investment Global investment is up 7% to Q3 016 vs the same period in 015 and has surpassed the 015 total of $14.9bn Global deal size is slightly ahead of 015 Q3 levels, with the average increasing from $14.3m to $18.1m, partially attributable to large Chinese investments such as Alipay VC investment in the UK to Q3 016 is down 6% at $53m YOY and has only just reached the halfway mark of the total 015 investment of $1.1m Q1 016 YOY performance in the UK kept pace but Q 016 slowed dramatically to 33% of Q 015 investments which many analysts contributed to the general uncertainty in the run up to the Brexit referendum on 3 June 16 Q3 016 recovered modestly with $139m in investment, 7% better than Q of the Top 0 UK deals closed post Brexit,3 June 016, totaling $105m The UK attracted 76 deals, the highest volume outside the US at 457, and was third in terms of total investment of $53m behind US at $5,65m and China at $7,117m The UK s Starling Bank, which raised $101m, was the only UK investment in the Global Top 0 global deals Challenger Banks attracted the most investment in the UK. Starling Bank, SETL, Tandem Bank, Sonovate and Ezbob round up the top 5 FinTech deals in the UK, all over $5m in deal size Source: Pitchbook

3 Global 3

4 GLOBAL FINTECH VC DEAL VOLUME to Q3 016 Russia 8 Denmark 5 Sweden 19 Netherlands 7 U.K. 76 Finland 5 Canada 18 Ireland 7 Germany 19 France 18 U.S. 457 Switzerland 5 Japan 7 China 14 Israel 14 Mexico 8 India 37 Singapore 1 Brazil 5 50 Australia Source: Pitchbook 839 deals in total in 57 countries 4

5 GLOBAL FINTECH VC INVESTMENT to Q3 016 Denmark $4m Sweden $54m U.K. $53m Canada $67m Ireland $518m Germany $346m France $57m U.S. $5,65m Switzerland $39m Japan $61m South Korea $4m China $7,117m Israel $161m Mexico $64m Hong Kong $170m Vietnam $8m India $6m Singapore $35m $500m Brazil $79m $100m Australia $85m $50m $10m 10k Source: Pitchbook $15. billion invested over 839 deals 5

6 FINTECH VC INVESTMENT GLOBAL Global investment to Q3 016 has increased 7% YoY vs Q3 015 to $15.bn 016 investment has already surpassed the 015 total of $14.9bn Q3 has slowed to 65% of the YoY investment Capital Invested (USD $m) , , ,60 1,074 14,890 15,173,96 6,573 3,314,044 Q3 YoY -65% 839,310 7,401 5, Q , # of deals THE UK 016 Global VC FinTech Investment UK investment to Q3 016 has decreased 6% YoY vs Q , UK investment has only just reached the halfway mark of the total 015 investment of $1.1m Q 016 slowed dramatically to 33% of Q 015 possibly due to Brexit 8 of the Top 0 UK deals closed post Capital Invested (USD $m) 1,00 1, , Q3 YoY +7% # of deals Brexit 3 June 016 totaling $105m Q Q1 Q Q3 Q4 Number of deals 016 UK VC FinTech Investment Source: Pitchbook 6

7 TOP FINTECH VC DEALS YTD Q3 016 Globally the top 3 deals came from China, however the US saw the highest deal volume, with 10 of the top 0 deals Payments 6-Apr-16 B $4,500m Capital Markets 15-Jan-16 Undisclosed $1,00m Consumer Finance 16-Jan-16 A $1,013m In the UK only the top deal was in the top 0 deals globally Capital Markets 31-May-16 Undisclosed $400m InsurTech -Feb-16 Undisclosed $400m Challenger Banks Blockchain Challenger Banks SME Financing SME Financing 11-Jan Jul-16 1-May-16 8-Jan Mar-16 Angel Angel B A Undisclosed $101m $39.5m $3m $9m $8.5m Source: Pitchbook 7

8 TOP GLOBAL INVESTORS AND DEALS - YTD Q3 016 Techstars was the top global investor and there was one UK deal in the top 0 global deals Top global investors by number of investments Top 0 global deals by deal value ($M) Techstars Y Combinator 500 Startups Startupbootcamp AliPay (China) Lu.com (China) JD Finance (China) ION Trading (Ireland) Oscar (US) ,00 1,013 4,500 Sequoia Capital 9 51credit.com (China) 310 Digital Currency Group Khosla Ventures Index Ventures Foundersclub Founders Fund LendingHome (US) QuarterSpot (US) Solar Mosaic (US) PowerPlan (US) Dividend Solar (US) WeLab (Hong Kong) UK deal Financial Solutions Lab 8 Weidai.com (China) 153 Peter Thiel Valar Ventures QED Investors Point Nine Capital Foundation for Internet Development-Initiatives Fenway Summer Ventures LendUp (US) DoorDash (US) Kreditech (Germany) Starling Bank (UK) The Direct Pay Online Group (Ireland) Affirm (US) Betterment (US) Source: Pitchbook 8

9 UK 9

10 UK FINTECH VC DEALS - YTD Q3 016 BY VERTICAL AND STAGE In the UK over 60% of deals where in Challenger Banks, SME Financing, Money Transfer and FX and Digital Currencies and Blockchain verticals UK deals by vertical UK deals by value Financial Inclusion and Education 3% Peer-to-Peer 3% Enterprise Software 6% Payments 6% Alternative Finance (other) 6% Crowdfunding 7% Other 3% Wealth Management % Capital Markets % Data & Analytics 1% Challenger Banks 7% SME Financing 13% Deal size 5M+ 10M - 4.9M 5M - 9.9M 1M - 4.9M 500K - 0.9M.78 (4) (3) (11) (8) (7) Digital Currencies & Blockchain 8% Money Transfer & FX 13% 0-499K.81 (3) Deal value (number of deals) USD (m) Source: Pitchbook 10

11 TOP UK INVESTORS AND DEALS - YTD Q3 016 Entrepreneur First was the UK s top investor and within the top 0 UK deals there were 7 Innovate Finance members Top UK investors by number of investments Top 0 UK deals by deal value ($M) Entrepreneur First 5 Balderton Capital Techstars Passion Capital Index Ventures William Reeve Venrex Velocity Capital Private Equity Seedcamp Samos Investments Point Nine Capital Notion Capital MCI Capital LocalGlobe Holzbrinck Ventures Global Founders Capital e.ventures DN Capital Dawn Capital Alex Chesterman Starling Bank SETL Tandem (Retail Bank) Sonovate Ezbob TransferWise LendInvest Property Partner Azimo GoCardless Crowdcube Money Guide App WeSwap.com Payleven Receipt Bank Revolut MarketInvoice Neyber DueCourse Meniga Innovate Finance member Source: Pitchbook 11

12 POST BREXIT ROUNDS IN UK 8 of the top 0 deals in the UK were post Brexit, totaling $105m of investment Money Guide App Blockchain Crowdfunding Other FX 15-Jul Aug Aug Jul-16 Angel Undisclosed Angel B $39.5m $10.5m $10m $10m Main Investors Undisclosed Main Investors Crowdfunded (own platform) Main Investors Undisclosed Main Investors Ascot Capital Partners, EC1 Capital, IW Capital FX Peer-to-Peer SME Financing Financial Inclusion 11-Jul Julr Sep-16 3-Aug-16 A Undisclosed Undisclosed B $9.6m $9.5m $8.3m $8.m Main Investors Balderton Capital. Ribbit Capital, Index Ventures Main Investors MCI Capital, North Zone Ventures Main Investors Global Founders Capital, Simon Franks, Alex Chesterman Main Investors Velocity Capital Private Equity and Frumtak Source: Pitchbook 1

13 UK Q3 016 analysis 64% of investment was follow-on investment, with 67% of investment coming from investors domiciled in the UK Q3 UK deals by vertical Domicile of source of investment (Q3 015 vs Q3 016) Financial Inclusion and Education, 6% Peer-to-Peer, 7% Enterprise Software, 1% Capital Markets, 1% Wealth Management, 6% Data & Analytics, 3% Digital Currencies & Blockchain, 8% 100% 90% 80% 70% 60% 59% 67% Q3 015 Q3 016 Payments, 5% 50% Crowdfunding, 8% Other, 10% SME Financing, 9% 36% new investment (mostly SETL) 64% follow-on investments Money Transfer & FX, 15% 40% 30% 0% 10% 0% 5% 17% 17% 8% 3% 3% 0% 0% UK USA Asia Europe Unknown Source: Pitchbook 13

14 New Funds 14

15 NEW FINTECH FOCUSED FUNDS LAUNCHED IN 016 (GLOBAL) (1/3) Several FinTech focused funds have been launched in 016 so far, a good indicator that investment momentum will continue FUND LOCATION SIZE DATE LAUCHED Singapore China Initial capital of $5m from Life.SREDA, but looking to expand to $50m by the end of 016 and top $100m by 017 Apr-16 INVESTMENTS MADE None to date $00m May-16 None to date Ireland Enterprise Ireland Competitive Start Fund (CSF) 500k May-16 None to date China Undisclosed May-16 None to date FinTech USA $5m Jun-16 None to date (previous funds have invested in 80 FinTech companies over the last 6 years) 15

16 NEW FINTECH FOCUSED FUNDS LAUNCHED IN 016 (GLOBAL) (/3) Several FinTech focused funds have been launched in 016 so far, a good indicator that investment momentum will continue FUND LOCATION SIZE DATE LAUCHED INVESTMENTS MADE UK 0m Established Jun-16, launch date unknown N/A DB 1 Ventures Germany Undisclosed Jun-16 Includes some existing investments e.g. Digital Assets holdings (Blythe Masters Blockchain startup) Switzerland Ventures CHF 10m Jun-16 None to date UK 100m (follow on investment) Jul-16 Original fund has invested in Ripple (Blockchain - US), izettle (payments - Sweden), Elliptic (Blockchain UK). USA $300m Sep-16 None to date however canvas's first fund, raised in 013, was an investor in Lending Club 16

17 NEW FINTECH FOCUSED FUNDS LAUNCHED IN 016 (GLOBAL) (3/3) Several FinTech focused funds have been launched in 016 so far, a good indicator that investment momentum will continue FUND LOCATION SIZE DATE LAUCHED INVESTMENTS MADE (8 th fund) Europe 300m Sep-16 One investment from previously fund Northzone VIII Zervant (A-invoicing Finland) Capital Accelerate and Scale Tech Startup (CASTS) Europe 7.4m Sep-16 (unfrozen after Brexit pause) None to date Australia Initially seeking to raise $7.5m - $55m via IPO, however the minimum amount was not raised so the fund is going private Sep-16 N/A 17

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