payments - Innovalue

payments
Insight. Opinion.
vol 11
CONTENT
1 A report from Las Vegas –
A report from Las Vegas –
review of Money 20/20
review of Money 20/20
Andreas Habersetzer reviews this year's Money
20/20 conference.
Andreas Habersetzer
3 Extended payment factories –
Partner
the potential convergence of digital
payments and transaction banking
The article considers some of the key transaction banking
infrastructures and the implications and opportunities of
the growing relevance of digital payments from a corporate
treasury perspective.
5 MERCHANT ACCEPTANCE: THE DISCOUNTER EFFECT FOR CREDIT CARDS
AND MOBILE PAYMENTS
INNOVALUE investigates to what extent the recent moves
from large discounter merchants might impact the payment habits of German consumers.
7 Pu
blic market valuations and
Attendees
Alongside 10,000 other people I made the way to Las
Vegas at the end of October to this year’s Money
20/20 conference. The current size of this annual
event underlines the current level of interest by the
general public, the media, investors and industry
insiders in fintech, payments and general innovation
in financial services. By now, every major bank has set
up internal teams with the goal to manage the transformation to the digital age – either through in-house
developments, partnerships or acquisitions and be
able to meet the needs of the much quoted millennial.
And members of these teams were represented plentifully in addition to investors, start-ups and representatives from the large payment incumbents.
the market environment
Markets have seen considerable movements over the past
three months with significant share price corrections in
August. Markus Massem takes a look at valuation drivers
and benchmarks the different groups within the payments
universe.
9 M&A Activity
What are the key drivers of M&A and IPO activity? Which
transactions made headlines in the 3nd Quarter of 2015?
What are recent takeover rationales? Robert Kayser
answers these questions.
11 Venture Capital
Once again, the Innovalue team reviews the latest payment startup funding activity (Q3 2015). What are current
product or service innovations for investors, and what are
the global investment trends within the payment
ecosystem?
13 Deal Activity M&A
Transaction overview
15 VC Activity
Transaction overview
Announcements
Corporate announcements form a big part of Money
20/20’s agenda and a summary of selected key notes
is provided in the following chapter:
The most notable announcement was probably the
launch of ChasePay. With 94 million preloaded cards,
Chase hopes to have a critical mass of consumers to
compete with the likes of Apple Pay, Android Pay,
Samsung Pay and all of the other digital wallets.
ChasePay will run on ChaseNet, Chase’s “closed-loop
network”, which is effectively Visa’s network as this
was agreed as part of a 10-year deal in 2013. The
agreement allows Chase to offer ChasePay at a fixed
price: “there will be zero network fees for merchants,
there will be zero merchant processing fees for the
merchants and there will be zero merchant fraud liability”. In addition, Chase is cooperating with MCX’s
CurrentC to grant relevant merchants acceptance
from day one. The partnership combines consumer
(Chase) and merchant reach (MCX) and could be a
game changer for CurrentC that has been written off
already by many in the industry.
MCX’s CEO Brian Mooney also held a separate key
note, demonstrating the progress made with CurrentC during the initial trial period in Salt Lake City.
CurrentC supports multiple payment technologies,
ranging from QR codes to BLE and NFC, depending
on the use case of the merchant (in-store, at the
pump or drive-through etc.) and achieved a seamless integration of the multiple loyalty programmes
of MCX’s merchant members which represent
annual revenue of over USD 1 trillion. The combination of payments and loyalty in one transaction, with
loyalty programes that already matter to the user
today, could be a real differentiator for CurrentC.
Google (Android Pay) and Samsung didn’t want
to be left out and also presented their solutions.
Samsung Pay is based on the technology of Loop, a
company Samsung recently acquired. Loop’s patented Magnetic Secure Transmission technology
“turns in-store payment terminals where you normally swipe a credit card into contactless readers”
allowing “universal merchant acceptance”. From my
understanding, Samsung Pay is also working with
NFC, which would be helpful as the world is migrating towards the EMV standard and away from magnetic stripes.
With key notes from Poynt, Ingenico, Verifone and
First Data with its Clover product suite, POS system
providers were well represented. After a year of
development, Poynt is now ready to ship its cloud
based POS and already has commitments for about
500k terminals. The firm came with a massive
booth, USD 28 million in fresh funding and huge
ambitions to Las Vegas. The terminals are beautifully designed and come with a sophisticated terminal management system, app store and SDK.
Compared with that, Verifone’s next generation POS
“Engage” looked quite traditional, but Verifone
already has the scale that Poynt hopes to reach one
day. Like Poynt, Verifone and Ingenico presented
their own versions of cloud-based marketplaces for
business applications. First Data might currently be
at the forefront, with 128 apps available (in the US)
and more than 350 in development.
payments
2
Insight. Opinion.
Through its announced partnership with Affirm,
First Data will also bring consumer financing solutions to the POS.
The most notable element of PayPal CEO Dan
Schulman’s key note was his continued emphasis on
PayPal’s commitment to provide SMEs with working
capital financing. So far, PayPal has provided over
USD 1 billion to SME’s in the US, UK and Australia.
“The current size of
this annual event
underlines the current
level of interest by the general
public, the media, investors and
industry insiders in fintech,
payments and general
innovation in financial services”
Blockchain
Cloud-based POS /
app marketplaces
SMB Solutions
Faster
payments
Alternative
lending
IoT
commerce
P2P
B2B
Tokenisation
Frictionless
payments
Mobile
payments
Artificial
Intelligence
Social commerce
On the rise
At the peak
Sliding into
the through
Climbing the slope
Plateau of productivity
Figure 1: The payment market continues to be highly innovative,
featuring solutions both for merchants and consumers
Key topics – the Money 20/20 Hype Cycle
Trends change quickly in the current fintech environment, where one exciting idea is quickly followed
by the next. At Money 20/20, topics are excitedly
discussed in one year, followed by disillusion and
reduced interest the year after. One of the mostly
debated topics this year was probably the blockchain and its potential to provide existing services
more securely and efficiently as well as to build new
applications for business and consumers on top of
it. While the launch of Apple Pay absolutely dominated conversations last year, the lack of traction led
to less enthusiastic assessment this year. The perceived hype around certain topics followed by a
drought inspired the development of a “Money
20/20 Hype Cycle” (figure 1), based on Gartner’s
Hype Cycle for Emerging Technologie.
Start-ups to watch
Innovation and start-ups played a big role at Money
20/20 this year, with events like Launchpad 360, a
pitch competition and plenty of high profile VC’s
present.
Monk (www.getmonkapp.com), “a mobile platform
aiming to provide financial security by enabling
social circles to save, borrow and lend together”,
won the jury prize of the start-up pitch. Fluent
(www.fluentfunds.com) was most convincing to the
audience. “Built on the blockchain, Fluent’s platform
enables businesses to reduce friction, improve
transparency, and boost efficiency in financial and
commercial flows along the global supply chain”.
Groundfloor (www.groundfloor.us), a “real estate
crowdfunding” website is among the increasing
number of start-ups trying to revolutionize the real
estate sector, from origination to financing. David
Weiden, Partner at Khosla Ventures, described real
estate as one of the “most under-hyped” sectors in
FinTech. Another area where investors would like to
see more new initiatives includes insurance.
Finally a word about unicorns, (FinTech) start-ups
with a valuation of USD 1 billion or more, which are
increasingly entering difficult terrain or “no-man’s
land”, as one investor put it, as they are facing difficulties in raising money at previous valuations or to
meet their inflated expectations regarding
valuations.
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payments
3
Insight. Opinion.
Extended payment factories –
the potential convergence of digital
payments and transaction banking
Francesco Burelli
Partner
Sungard indicates that “40% of companies are operating with 11 or more payment initiation systems1
and 25% have over 21 payment initiation systems”.
While this number can vary based on the type of
company, it is a fact that companies, including SMEs,
operate complex payment operations with multiple
bank relationships, multiple accounts, and multiple
points of payments initiation, authorisation and control. This challenge is addressed through the centralisation of bank account management and
payment processing, that are otherwise managed at
business unit or subsidiary level, with the aim to
address cost duplication, lack of scale and the need
of visibility that is otherwise required for effective
cash and liquidity management.
The “payment factory”2 concept has now been
implemented in a variety of business models of
which the shared service organisation (SSO) and the
in-house bank (IHB) are the two most widely
adopted. In the SSO model a centralised
unit manages all outgoof both models would
Given the centrality
ing payments through
offer the most benefits to
of payments for
the centralisation of
corporate
treasuries,
account management,
albeit in a more complex
cash and liquidity
payment expertise and
management and the growing treasury structure. This
through the standardiwould combine efficient
complexity of treasury
sation of processes that
funding management,
ultimately offer better
liquidity
optimisation
management … there is the
transparency,
lower
with
payment
potential to extend the reach
transaction cost and
management.
of a corporate treasury’s
aggregated
liquidity
The statement from Sunpositions. The IHB
gard at the beginning of
payment factory operations
model is focused on the
the article would be easbeyond payments to digital
management of funding
ily translated into a simipayments.
and liquidity simplifying
lar statistics for digital
cash
utilisation,
payment
acceptance.
improved visibility and liquidity by acting as a corpoWhile payment factories provide a consolidated
rate’s “in-house” bank for the various business units.
approach to outgoing payments, account receivWhile both models have their advantages, it can be
ables are very much polarised between a bank
argued that a hybrid model leveraging the synergies
model – that is aimed to invoice related
1
http://www.sungard.com/Regions/Africa/solutions/corporate-liquidity/payments-factory I 2 “A payment factory is an accounts payable function that has been centralized for an entire organization. This is an
improvement on a distributed payables system, which incurs more administrative costs to ensure that multiple payables systems are properly managed.” Source: AccountingTools
Page 1
payments
payments management – and a Payment Service
Provider (PSP) model – related to online receivable
payments where the role of a payment factory, in
terms of FX management and payment flow consolidation across multiple payment instruments and
channel, is often fulfilled by a PSP on the back of an
online merchant acquiring proposition.
Given the centrality of outgoing and incoming payments for cash, and liquidity management and the
growing complexity of treasury management, on the
base of the increased flows of international trade and
e-commerce, there is the potential to extend the
reach of a corporate treasury’s payment factory
operations beyond payments to digital payments.
SBU
This would encompass incoming payments with an
optimised mix of FX handling, payment flow consolidation that would ultimately result into an optimised
liquidity management.
As banks are often delegating and surrendering their
acquiring and digital payments business to monoline
acquirers and PSPs on a referral basis, and with the
ongoing blurring of the boundaries between steps of
the payment value chain, there is a potential for PSPs
branching out into transaction banking, to drive the
emergence of a consolidated payment factories
model. When this will happen, the PSPs opportunity
would include not only the provision of digital payment interfaces but the extension into the provision
Bank
Shared service organization
Internal
netting
SBU
External
netting
In-house bank
of IHB platforms, driving further convergence and
blurring of business lines between digital payments
and transaction banking models.
Payment factories were a pre-eminent corporate
treasury topic two, three years ago that has faded
from mainstream debates likely on the basis of adoption and business models that have reached a relative
stage of maturity, leaving the centre of public debate
to other arguments. It is highly likely that the topic will
regain pre-eminence rapidly as digital payment fintech organisations realise the potential offered by the
ability to support corporate treasury solutions beyond
converging online and in-store payments.
Bank
Payment factory
SBU
SBU
4
Insight. Opinion.
Bank
Digital
payment
interface
Trading
partners
...
Cashflow forecasting
FX management
Cash and liquidity optimisation
Capital allocation
Figure 1: Payment factory
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payments
5
Insight. Opinion.
MERCHANT ACCEPTANCE:
THE DISCOUNTER EFFECT FOR
CREDIT CARDS AND MOBILE PAYMENTS
Kalle Dunkel
Senior Associate
Lena Meyer
Associate
March 2015
Interchange regulation passed
December 9th 2015
Interchange regulation in effect
§
€
Thomas Grohnert
Principal
May
June
July
Figure 1: Credit card regulation and new acceptance by merchants
Large retailers accepting credit cards
In a series of announcements over the last few
months the largest German discounters have finally
introduced the acceptance of credit card payments
in all their stores in Germany. These announcements
included among them some of the largest food
retailers Aldi (Nord & Süd), Lidl and Netto as well as
Kaufland. Within the top five in the food retail sector
only the more upmarket players such as Rewe and
Edeka had previously accepted credit cards. Furthermore both MediaMarkt and Saturn, the large scale
electronics retailers of the Metro Group, have introduced credit card acceptance in May of this year.
The most likely driver for this development is the
new regulation for interchange fees for card-based
payment transactions passed by the European
Parliament in March of 2015. This regulation will
come into effect by December 9th 2015 and
includes the capping of interchange fees for credit
card payments at 0.30% of the transaction value.
Currently the interchange fee depends on multiple
factors such as vertical and transaction technology and could be up to 1.85%. Supermarkets in
Germany always had a preferred status. For example for Visa transactions the interchange varies
between 0.68% - 1.00%. Cutting the payment
costs by such a degree clearly makes credit cards
attractive for these low margin high volume
businesses.
Market implication Germany
We think that the move by German food discounters
to credit card acceptance will lead to a significant
increase of the market share of credit card payments
in Germany. In the recent past the share of credit
cards in Germany was relatively low at 5.3% of the
retail transaction volume. Within the food sector this
was even lower at about 2.7%. The contribution
from food discounters was practically zero.
Within the top five food retailers three merchants
(Aldi, Lidl, Netto) joined their two peers (Rewe,
Edeka) in credit card acceptance. This adds over EUR
57 billion in potential credit card volume. With food
retail accounting for about one third of the German
retail market this definitely could lead to a so-called
discounter effect for the credit card market. (figure 2)
Food
(Top 5)
New
CC Acceptance
460
97
(21%)
Food
(others)
68
(15%)
Other
retail
295
(64%)
We have already seen such a discounter effect back
in the mid-2000’s when discounters started to
accept EC debit cards. The annual growth rate in
consumer cards spending at retailers jumped for
about three years from 12% to 34% before settling
again at a base rate of about 10%. (figure 3)
57
(59%)
40
(41%)
Previous
CC Aceptance
Figure 2: Volume implications of discounters (2014)
Growth p.a. [%]
EC retail
transaction
volume
[EUR billion]
10%
Figure 3: Discounter effect on EC cash retail volume
Page 1
payments
Insight. Opinion.
Impact on NFC and mobile payments
So far, there were about 60,000 active NFC termiOver the last years the development in mobile paynals in Germany which accounted for about 8% of
ments has steadily been going towards NFC
points of acceptance. This is relatively low compared
scheme based solutions. All major device/operatto other countries such as the UK with 260,000
ing system manufacturactive NFC terminals
ers (Apple, Samsung &
in the market. The
Google) as well as most
number of contactless
Actions by large
MNOs have based their
transactions in the UK
retail merchants will
mobile payments soluwas 81 million in June
significantly influence 2015. Looking at the
tion on NFC. However, in
Germany neither NFC
NFC acceptance at
payment habits … Germany
nor its prerequisite
large German retailers
to leave the “Dark Age of
credit card acceptance
in general there were
Payment”
had
been
widely
only two among the
available.
30 surveyed players
(Top 5 merchants, 6 verticals) which accepted NFC
payments in the beginning of this year.
6
Among the swell of announcements regarding
credit card acceptance multiple merchants communicated that they would install NFC-activated
terminals. These included MediaMarkt, Saturn and
even Aldi Nord. Furthermore both Visa and MasterCard have been pushing to get their new terminals sold to be NFC-activated. It stands to reason
that the other newly credit card enabled players are
at least hardware-ready for NFC. Given this we
might see yet another discounter effect – for NFC
transactions.
Conclusion
Overall, we at INNOVALUE believe that these
actions by the large retail merchants will significantly influence the payment habits of German
consumers. Their new payment strategy might just
pave the way for Germans to leave the “Dark Ages
of Payment”.
Sources:
GfK, Statista, Visa, Company Websites, INNOVALUE
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payments
7
Insight. Opinion.
Public market valuations
and the market environment
Markus Massem
Senior Associate
The last 3 months up to October 13th have been a
uncertain timing of an interest rate rise in the U.S.
volatile time for international equity markets. A
have made investors cautious. The risk of a slowworldwide sell-off in mid-August led to a strong
down in Chinese growth is possibly the single
decline in share prices and
most important issue
resulted in August being the
driving
investment
The majority of
worst month for the Dow
decisions
at
the
public companies
Jones in 5 years and the worst
moment, keeping marin our payments
month for the S&P500 since
kets somewhat alert.
universe
have
ended up
May 2012. In Europe, the
The majority of public
FTSE 100 fell below the 6,000
higher at the end of the three companies in our paymark for the first time since
ments universe (see
month period even though
2013 and also the German
end of article for comthe slowdown in August has
DAX dropped below the psyposition) have ended
been clearly reflected in the
chologically important mark
up higher at the end of
of 10,000 points. The drivers
the three month period
share price movements.
for the recent stock market
(with 10 out of 18
movements are numerous and include a weaker
stocks posting gains) even though the slowdown
than expected recovery in advanced economies as
in August has been clearly reflected in the share
well as a further slowdown in emerging econoprice movements. A partial rebound from the
mies, especially in Latin America. In addition, the
steep declines was followed by more consistent
impact of a slowing economy in China and the
gains in early October, in line with the wider marThe payments universe (alphabetical order):
Acceptance: Global Payments, Ingenico,
PayPoint, Vantiv, Verifone
Processing: Cielo, Euronet Worldwide, FIS, Fiserv,
Heartland Payment Systems, Total System Services
PSP/Online payments: Wirecard
Issuing/Prepaid solutions: FleetCor, Green Dot, WEX
Schemes: American Express, MasterCard, Visa
Sources: Innovalue research and company filings;
Google Finance for share price data
ket. Since the beginning of the year, 13 out of the
18 stocks are still in positive territory. The overall
payment index is up by 4% over the past three
months and 16% since the beginning of the year.
The acceptance bucket gained about 6% over the
last three months, with both Vantiv and Global
Payments outperforming their comparable peers
with gains of 21% and 22% respectively. PayPoint
and Ingenico closed at the same level at the end
of the period while Verifone’s stock declined by
11% over the past three months, given gradual
losses over the course of September. Verifone
announced a USD 200 million share repurchase
authorisation on September 28th, the first in Verifone’s history, representing about 6.5% of the
company’s outstanding shares. Global Payments
continues to be the strongest performer with YTD
gains in excess of 60%. The shares jumped 11%
on October 8th on the back of strong earnings
and an increase in the outlook for the year 2016.
The month of August saw two strongly anticipated IPOs as both WorldPay and First Data
made their stock market debut. WorldPay was
able to pull off the largest UK IPO of the year and
was priced at 240p, in line with the most recent
price range of 235-250p. Advent International
and Bain Capital, who bought the company from
RBS five years ago received gross proceeds of
GBP 1.2 billion and will retain a 49% share in the
company post the IPO. The listing values WorldPay at more than 16 times underlying 2014
EBITDA of GBP 375 million.
First Data ended up issuing its shares at a discount to the published price range of USD 18 to
USD 20, floating the company at only USD 16 per
share. The company sold 160 million shares to
raise close to USD 2.6 billion. KKR, the company’s
private-equity owner, was not selling any stock in
the offering, and the proceeds will be used solely
to pay down some of the company’s USD 21 billion in total debt, as was stated in the IPO filing.
KKR had acquired First Data in April 2007 for
about USD 29 billion.
135
Last 3 months
130
125
120
115
110
105
100
95
90
85
Jan-15
Acceptance
Feb-15
Processing
Mar-15
April-15
PSP/Online payments
May-15
Issuing/Prepaid
Jun-15
Schemes
Jul-15
Aug-15
Sep-15
Jul-15
S&P 500
Figure 1: Indexed stock price performance year-to-date October 13th 2015
Page 1
payments
8
Insight. Opinion.
The comparables within the processing bucket
gained about 11% over the last three months.
Cielo was the only underperformer over the
period, with the share price declining consistently
throughout July until early October, losing about
13%. Heartland Payment Systems and Euronet
Worldwide performed strongly, gaining more
than 20% over the period following stable
increases post the August decline.
Within the PSP and online payments category,
Wirecard AG gained 12% over the last three
months and is up by 17% since the beginning of
the year.
The comparables of the issuing / prepaid solutions bucket lost about 6% over the last three
months, with all of WEX, Fleetcor and Green Dot
posting share price losses. WEX lead the losses
with 18% while Fleetcor and Green Dot lost 7%
each over the three months period.
Lastly, the trading comparables within the
schemes bucket gained a total of 2% over the last
3 months. American Express shed another 2% of
market value over the period while MasterCard
finished unchanged and Visa gained about 8%.
American Express is still down by about 18% year
to date. The company reported better than
expected second-quarter profit as it was able to
benefit from cost-savings due to job cuts. Competition for "co-brand" deals in which card issuers
team up with prominent corporate partners to sell
cards remains strong, and American Express lost
a number of lucrative co-brand contracts this year
due to the higher prices it charges compared to
rivals.
70%
60%
61%
61%
50%
47%
40%
45%
30%
29%
25%
20%
10%
10%
24%
31%
26%
29%
24%
14%
12%
8%
0%
Revenue growth CY 13-14
Ebitda margin CY 13
Ebitda margin CY 14
Figure 2: Payments universe operational metrics as of October 13th 2015
35.0x
35.2
30.0x
25.0x
25.6
20.0x
21.3
9.2
5.0
15.3
12.3
11.3
7.4
6.3
4.9
19.3
16.8
13.5
12.8
10.0x
5.0x
21.6
17.3
15.0x
3.6 4.3
5.6
0.0x
EV/Rev CY 13
EV/Rev CY 14
EV/EBITDA CY 13
EV/EBITDA CY 14
Figure 3: Payments universe trading multiples as of October 13th 2015
Acceptance
Processing
PSP/Online payments
Issuing/Prepaid
Schemes
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payments
9
Insight. Opinion.
M&A Activity
Robert Kayser
Senior Associate
M&A activity and deal characteristics
A total of 46 M&A transactions were announced
in the third quarter of 2015. One less compared to
the same period of 2014. However, it has been by
far the strongest quarter in 2015 in terms of deals
and volume. Despite the sell-off in global markets
due to concerns about China’s economy, M&A
activity has not really been affected. While the
summer months tend to be generally slower for
M&A activity, particularly August and September
have been busy months. The financial terms of 14
transactions, with a total volume of USD 14.1 billion, were disclosed. This quarter’s highlight in
terms of deal size is FIS’s acquisition of Sunguard
for USD 9.1 billion including the assumption of
USD 4.6 billion in long term debt. In June the company filed to go public. But as speculated in our
last issue the group of private-equity firms that
owned Sungard, including Bain Capital, Blackstone and KKR & Co., preferred a clean exit before
the full IPO process would have started. SunGard
makes software for financial institutions from
which FIS expects to expand its enterprise banking and capital markets solutions portfolio. The
combined company will have more than USD 9.2
billion in annual revenue, 55,000 employees and
operate in more than 100 countries.
The median EBITDA-multiple decreased from
14.7x to 13.1x between 2014 and 2015. The median
revenue multiple increased by 36 per cent, from
2.8x to 3.8x between 2014 and 2015. TIO’s acquisition of Softgate System, valued at USD 30.3
Geographically, 61 per cent of the targets were
based in North America (Q3/2014: 49%), followed by 22 per cent in Europe (Q3/2014: 34%)
and 11 per cent in Asia/Pacific. After a strong H1 in
Europe deal activity has been more quiet in the
last three months. As a result the pendulum has
swung again in favour of the Anglo-Saxon investors (+24% YoY) and targets (+12% YoY). There
has been only one Non-European investor to the
10 European targets in this quarter, a situation
observed for the first time. Nevertheless my
hypothesis is that with the euro lower in value and
growth slowly picking up, Europe could become
again a vital target area for Asian and U.S. investors and boost cross-border activities. Looking
forward, M&A is still seen as the quickest way to
expand in what remains a low or slow-growth
environment. Furthermore, cash will likely remain
readily available and debt, while likely to get more
expensive, remains reasonably priced. Thus, in
terms of deals, 2015 has still the potential to be a
record-breaking year.
M&A Market development
47
15
39
38
36
Value USD billion
million, equates to a multiple of 6.1x EBITDA and
0.8x revenue. The acquisition of Sungard by FIS
equates to a multiple of 13.1x EBITDA or 3.5x revenue. PayPal’s acquisition of Xoom for USD 982.4
million equates to a multiple of 48.9x EBITDA or
6.2x revenue. Envestnet paid 104.3 Yodlee’s
EBITDA or 6.4x revenue in an acquisition valued
at USD 573.9 million. The enterprise/revenue
multiple for CVC Capital Partner’s acquisition of
Linxens is 6.6x. The acquisition of AppRedeem by
Perk.com for USD 2.5 million equates to a multiple
of 3.6x invested capital.
46
50
14.1
40
10
Numbers of transactions
In the third quarter of 2015, deal activity in the
international fintech industry has surged significantly compared to the first two quarters. A total
of 46 transactions have been reported with a
total disclosed volume of USD 14.1 billion. Further consolidations among mobile payment providers as well as (crypto-) currency markets
have been among the drivers. In addition, Worldpay went public while First Data launched its initial public offering.
30
8.1
5
20
2014
Q3
10
3.6
2.4
0
2014
Q4
1.6
2015
Q1
Transaction volume
0
2015
Q2
2015
Q3
Value USD billion
Figure 1: Value and volume comparsion
Median enterprise value multiples
16x
14.7
14.5
13.1
14x
12x
9.5
10x
8x
6x
3.7
4x
3.8
2.8
2x
2012
2013
Revenue Multiple
2015
Q3
2014
Ebitda multiple
Figure 2: median value, revenue, Ebitda
Target and buyers by region
15%
2%
7%
11%
9%
4%
2%
9%
28%
34%
22%
49%
61%
22%
60%
Q3/14
67%
Q3/15
Q3/14
Targets
RoW
Asia/Pacific
Q3/15
Buyers
Europe
North America
Figure 3: 2014-2015 funding comparsion
Page 1
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Insight. Opinion.
Key drivers of and rationale for M&A activity
Deal activity in Q3 has been coined by transactions in the mobile payments sphere which made
up 26% of all transactions. Especially PayPal
stands out with its two acquisitions of Xoom and
Modest in the U.S. Through the acquisition of
Xoom PayPal expands its international money
transfer business portfolio whereas the purchase
of Modest strengthens the commerce experiences. After the acquisition of Paydiant in March
this year PayPal puts major efforts in mobile. This
is in dire need as for example ApplePay not only
launched successfully in the U.S. but also in the
UK and SamsungPay started with a sweeping
launch in South Korea. Alibaba continued its
astonishing growth by grabbing a 40% stake in
India’s Paytm for USD 680 million. The two companies intend to build a mobile payment ecosystem in the country. In addition, mobile payments
can also be of interest for established industries.
Volkswagen Financial Services, the financial subsidiary of German car producer Volkswagen,
bought German sunhill technologies. The deal
gives Volkswagen access to a mobile payment
system and 2 million customers across Europe.
Consolidation among pure mobile payment apps
such as PayPal or Yapital might reach its turning
debt of GBP 1.2 billion) or more than 16 times last
point this year. However, in countries such as Geryear’s underlying EBITDA. Private equity firms
many there are already more in-app payment
Advent International and Bain Capital which
solutions (e.g. myTaxi or Handyticket), then pure
bought Worldpay for GBP 2 billion from Royal
payment apps. Therefore, I expect mobile payBank of Scotland five years ago as part of bail out
ments also in the near future to be a major deal
terms ordered by the European Union Bain, hit its
driver.
targeted valuation of GBP 6 billion. With the IPO
After initial transactions last quarter, consolidaWorldpay declined a GBP 6.6 billion takeover bid
tion among (crypto-) currency marketplaces has
of French Ingenico which has been in official
gained further speed.
negotiations.
In
Dutch Coinfy which proaddition,
German
In terms of deals,
vides a mobile application
Wirecard reportedly
2015 has still the
that enables buying, sellhas been among biding, and accepting bitcoin
ders but has not
potential to be
payment in stores, bought
revealed this in puba record-breaking year
Coinzone
to
further
lic. Worldpay proexpand its European marcesses around USD
ket share. Canadian Winston Resources acquired
564 billion in payments each year, from about
UK-based Crypto Next for USD 6.8 million. Finally,
400,000 merchants. It also handles about 40
Currencies Direct, a provider of foreign exchange
percent of European Web transactions. Furtherand international payment solutions, was purmore, First Data launched its IPO after filing pubchased by alternative investment managers Pallicly in July. Former owning private-equity firm
amon Capital and Corsair Capital.
KKR & Co. planned to seek at least USD 2.5 billion
Regarding initial public offerings (IPO) the general
– on a valuation of USD 20 to 25 billion. This will
market atmosphere has become increasingly
likely be exceeded as the intended purchase of
more benign. Payment processor Worldpay went
160 million shares would bring more than USD
public which has been the largest floatation in the
3.5 billion in one of the largest IPOs in U.S. marUK in 2015 and is set to be the biggest IPO of a
kets this year. The proceeds raised from the issuprivate equity company in the UK ever. The listing
ance would be used to redeem roughly USD 2.5
values Worldpay at GBP 4.8 billion (excluding net
billion of senior unsecured notes.
10
Altogether 2015 might become a year of private
equity. Nearly 10% of all buyers in the third quarter have been strategic investors. Most recently
Iconiq, a secretive investment company that acts
for many of the most influential executives in Silicon Valley, such as Facebooks’ Mark Zuckerberg
or Twitter’s Jack Dorsey, has made an investment
in Dutch payment processor Adyen. Less than a
year after raising USD 250 million at a USD 1.5
billion valuation from institutional investors
including private equity group General Atlantic
and Singapore’s Temasek, Adyen has raised funds
now at a USD 2.3 billion valuation. This makes the
company one of the most highly valued technology start-ups in Europe. In addition CVC Capital
and Astorg Partners acquired French smart card
producer Linxens for USD 1.67 billion. The key
reason for the investments is, in particular, the
search for returns to optimize the monetisation of
portfolios which can be apparently achieved by
the high scalability of some fintech businesses.
Sources: Bloomberg, Financial Times, Mergerstat,
Mergermarket, Nilson, Reuters, company publications
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11
Insight. Opinion.
Venture Capital
Stefan Thomalla
Associate
Philipp Steinbrück
Associate
Funding Activity
VC funding activity kept its momentum in the third
quarter of 2015. While the nominal number of
funding rounds decreased to 117, compared to 153
in Q2 (and 113 in Q1), the overall funding volume
increased. The total (disclosed) volume amounted
to USD 3.5 billion in equity and USD 335.9 million in
debt financing in the third quarter. It is striking that
the average value per funding round increased by
about 44% to USD 32.8 million compared to the
previous quarter.
Funding Activity by Region
North America
61
Europe
27
Asia
20
Oceania
Africa
Australia
South America
Total
1
1
4
3
117
Although North America continues to lead the field
and accounts for more than half of the disclosed
funding rounds, FinTechs based in Asia were able to
gain ground. Out of the 117 funding activities 20
were in Asia, making it (by the number of funding
rounds) the biggest winner of this quarter. Europe
continues to secure the second place with a total of
27 funding rounds. Australia is ranked fourth with a
total of 4 funding rounds and is closely followed by
South America, with 3 funding activities. Not seen
on the list of the last quarter, however now present
again is Africa, where one funding activity took
place.
Investment Trends
Similar to the trend seen throughout the year, financial marketplaces was the biggest winner of venture capital funding (26 funding activities).
Financial marketplaces concerns the process of
enabling the transfer of cash flows between two
parties, with the aim to provide equity and debt
largest venture round of USD 60 million from Amacapital. In recent years, the traditional institutional
zon, Fidelity Growth Partners India, Mousse Partlenders have been joined by new and agile market
ners, Sequoia Capital and Walden International.
players. Such players connect market participants
Other Financial Services deals focused on compain a peer-to-peer (P2P), business-to-customer
nies offering integrated financial management plat(B2C), customer-to-business (C2B) and businessforms (e.g. payable), cloud based services and
to-business (B2B) relationship. During the third
solutions that enable customers to manage both
quarter, KrediTech closed one of the largest rounds
expenses and savings (e.g. Cloudability). It remains
of the segment. The German company uses bigto be seen if the shift in funding activities will condata in combination
tinue in the next
with algorithms to
quarter(s) for the
A segment attracting
evaluate credit risks
Financial
Services
and offer competisegment.
interest of venture
tive loans. KrediA segment attracting
capitalists as well as
Tech succeeded in
interest of venture caplarge investment banks are
two funding rounds
italists as well as large
this quarter – first in
investment banks are
Virtual / Crypto Currencies
July, where it raised
Virtual / Crypto Curand the underlying blockchain
USD 110 million and
rencies and the undertechnology.
in late September,
lying
blockchain
where another USD
technology. While the
92 million were raised. Another success of this
blockchain is the backbone of crypto currencies like
quarter was Avant, the American consumer lendBitcoin, its potential applications range from smart
ing company, which raised USD 325 million in Sepcontracts to P2P data storage. The use of a distribtember. With this, it continues to become one of
uted ledger, a protocol adding a new “block” with
the largest online providers of B2C loans in the US.
each transaction, makes the blockchain identifiable
Investors included JP Morgen as well as the private
and verifiable to the entire network. In the third
equity firm General Atlantic. With this investment
quarter, a total of 11 fundings with a total volume of
JP Morgan extends its interest in Avant, following
USD 72.8 million occurred. Of these transactions,
the USD 200 million “warehouse” credit facility the
several were targeting ventures researching the
firm and Credit Suisse provided in August.
blockchain technology in applications aside from
Based on the number of deals (15), Financial Sercrypto currencies. Targets included among others
vices was the 3rd largest funding segment of the
PeerNova, a Californian based company, offering a
quarter. However, as 27 deals were closed in Q2,
blockchain based data storing solution. The comthis represents a significant decrease of 44 percent
pany raised USD 6 million from an undisclosed
in the segment. Even more remarkable is the reducinvestor. The segment’s largest venture capital was
tion in terms of funding volume. In Q2 a volume of
raised by Chain (USD 30 million) from well-known
around USD 591 million was raised (USD 345 milcompanies including Visa, NASDAQ, Citi, Capitallion Q1), in Q3 funding’s with a total volume of only
One, Fiserv and Orange.
USD 219 million (minus 63 percent) were closed.
This trend was caused in particular by low North
American funding activity, with only 6 Financial
Funding Activity by Segment
Services venture rounds during this quarter (17 in
Financial Marketplace
26
Q2). Contrary to this is the Asian market, where
Financial
Services
15
twice as many deals were conducted in Q3 (4)
Online
Payments
8
compared with 2 in Q2. This pattern is in line with
the overall market trend for Asia. Therefore it is not
Mobile Payments / mCommerce
16
surprising that the largest deal in the segment was
Virtual / Crypto Currency
11
also raised in Asia. India based BankBazaar, which
Others
41
provides instant customized rate quotes on loans
Total
117
and insurance products, received the segment’s
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12
Insight. Opinion.
Chain develops network solutions based on the
blockchain technology, aiming to change the accessibility of information and the transfer of assets.
Though the third quarter showed a decrease in
funding activity within this segment, we believe
that the increasing interest by institutional investors and initiatives by large banks will fuel investments in blockchain related ventures in the
upcoming quarters.
Conclusion
This quarter is another indicator of the growing
interest in FinTech ventures. While the nominal
number of funding rounds showed a decrease compared to the previous quarter, the overall average
capital raised increased substantially. We believe
that this trend will continue in the upcoming quarters as ventures seem to grow and are aiming for
higher capital fundings.
It will be interesting to see whether a shift in the
funding concentration by segment will take place.
The Financial Marketplaces segment, typically the
segment with the highest number of funding
rounds in 2015, showed a big dive compared to the
previous quarter. Competition within this segment
seems to accelerate, potentially causing smaller
players to be pushed out of the market
or be unsuccessful in raising funds from venture
capitalists. We expect this to continue and potentially intensify further.
In our view, ventures related to the blockchain technology are going to be of increasing interest during
the upcoming quarters. We believe that funding will
further shift from Bitcoin to the underlying blockchain technology.
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13
Insight. Opinion.
DEAL Activity M&A
Q3 2015
Date
Announced
Target Company
Country
TC Industry
Buyer(s) (Country)
Country
Transaction
value (USDm)
1
01/07/15
Linxens
France
Manufactures smart card connectors
CVC Capital Partners
UK
1,665
2
02/07/15
Xoom
USA
Provides online money transfer services internationally
PayPal
USA
982.4
3
02/07/15
iSend
USA
Provides international electronic payment
Ding
Ireland
N/D
4
06/07/15
Columbus Data Services
USA
Processes automated teller machines
Cardtronics
USA
80
5
06/07/15
XE.com
Canada
Provides Internet foreign exchange tools and services for
corporate clients
Euronet
USA
40
6
14/07/15
Talio Labs
USA
Develops mobile messaging application
Remitly
USA
N/D
7
14/07/15
Softgate Systems
USA
Provides independent neighborhood-based payment center
operation services
TIO
USA
30.3
8
15/07/15
TransGlobal Payment Solutions
UK
Provides collaborative payment and collection solutions
Equiniti
UK
N/D
9
15/07/15
Transaction Wireless
USA
Provides wireless payment solutions
First Data
USA
N/D
10
21/07/15
NettCash
Zimbabwe Provides financial investments services
Mozido
USA
N/D
11
23/07/15
American Credit Card Processing
USA
Provides electronic payment processing services
Priority Payment Systems
USA
N/D
12
27/07/15
Premier Payments
USA
Provides credit and debit card payment processing services
Newtek Business Services
USA
16.5
13
05/08/15
YTS Solutions
India
Provides mobile payment solutions to individuals, operators
and financial institutions
Bharti Airtel
India
N/D
14
06/08/15
Financial Tech
USA
Provides API banking services
Silicon Valley Bank
USA
N/D
15
11/08/15
Yodlee
USA
Provides digital banking, financial data and account
aggregation services
Envestnet
USA
573.8
16
11/08/15
Currencies Direct
UK
Provides foreign exchange and international payment
solutions to private and corporate clients.
Palamon Capital + Corsair Capital
UK
310.9
17
11/08/15
CoinRepublic
Singapore
Operates an digital currency brokerage platform
meXBT
Mexico
N/D
18
12/08/15
SunGuard
USA
Provides software and technology services
Fidelity National Information
Services
USA
9,749
19
12/08/15
CT-Payment
Canada
Smart Card Marketing Systems
USA
N/D
20
13/08/15
Coinzone
Netherlands
Provides comprehensive point-of-sale services to financial
institutions and merchants for debit and credit card
authorization and settlements
Provides online payment services
Coinify
Netherlands N/D
21
14/08/15
Mobileview Italia
Italy
Provides mobile payment solutions
BOKU
USA
N/D
22
19/08/15
Modest
USA
Operates as mobile commerce platform
PayPal
USA
N/D
23
21/08/15
Tastebud Technologies
USA
Develops mobile loyalty applications
Raise Marketplace
USA
N/D
24
27/08/15
FutureAdvisor
USA
Provides investment advice
BlackRock
USA
N/D
25
01/09/15
Banco Nacional De Mexico SA (Merchant Mexico
Acquiring Business)
Engages in merchant acquiring business
EVO Payments International
USA
N/D
26
01/09/15
FX Mart
India
Provides electronic payments services
Flipkart
India
6.8
27
02/09/15
Boku (Pay By Call Business)
USA
Provides call payment services
DaoPay
Austria
N/D
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14
Insight. Opinion.
Date
Announced
Target Company
Country
TC Industry
Buyer(s) (Country)
Country
Transaction
value (USDm)
28
03/09/15
Wipit
USA
Provides financial services solutions for the unbanked and
under banked consumer
Urban FT
USA
N/D
29
04/09/15
Cash Bases Group
UK
Designs and manufactures cash management equipment
APG Cash Drawer
USA
N/D
30
04/09/15
iPay88
Malaysia
Provides online payment gateway services and solutions
NTT DATA
Japan
N/D
31
07/09/15
Qustomer
Belgium
Provides digital loyalty solutions
ING
Nether­lands N/D
32
09/09/15
Aurora Financial Systems
USA
Operates as payment processor and program manager
Finicity
USA
N/D
33
11/09/15
Crypto Next
UK
Offers white label crypto currency exchange services
Winston Resources
Canada
6.8
34
14/09/15
Terrapin Financial Services
USA
Provides merchant processing services
BluePay
USA
N/D
35
15/09/15
Toyota (Co-brand US Credit Card
Portfolio)
USA
Provides payment services
Alliance Data Systems Corporation
USA
N/D
36
15/09/15
Catalyst Business Development
USA
Provides payment gateway services, sales and software
solutions
Spindle
USA
N/D
37
16/09/15
sunhill technologies
Germany
Provides mobile payment systems
Volkswagen Financial Services
Germany
N/D
38
16/09/15
Beanstream Internet Commerce
Canada
Provides payment, risk management and authentication
services
Bambora
Sweden
N/D
39
18/09/15
Spree Commerce
USA
Provides an open-source ecommerce platform for stores
First Data
USA
N/D
40
21/09/15
Ambur POS
USA
Provides iPad and iPhone point of sale system for more than
1,500 restaurants
ShopKeep.com
USA
N/D
41
21/09/15
AppRedeem
USA
Provides an advertising platform for mobile application
discovery, branding, and monetization
Perk.com
USA
2.5
42
22/09/15
Cover
USA
Provides mobile dining application for payment of bills
Velocity
USA
N/D
43
23/09/15
GRG International (Australian ATM
Business)
Australia
Operates automated teller machines
DC Payments Australasia
Canada
1.5
44
23/09/15
B+S Card Service
Germany
Provides electronic payment solutions
Deutscher Sparkassen Verlag
Germany
N/D
45
24/09/15
Sightline Payments (ATM and Cash
Business)
USA
Provides payment solutions for gaming companies
NRT Technologies
USA
N/D
46
29/09/15
Paytm (20% stake)
Asia
Provides mobile payment solutions
Alibaba
China
680
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15
Insight. Opinion.
Venture Capital Activity & Company Profiles
Q3 2015
Target (Country)
Round
Investor(s)
Venture
Volume
(USDm)
167.00
Description
N/D
Funding
(USDm)
180.00
1
GFG Group (NZ)
2
LoanSolutions (PH)
Seed
N/D
John Dang, Kickstart Ventures, KK Fund
N/D
Loan Solutions is the largest platform in the Philippines that connects
borrowers and lending partners online.
3
BankBazaar (IN)
C
60.00
Amazon, Fidelity Growth Partners India, Mousse Partners,
Sequoia Capital, Walden International
79.00
Pret d’Union (FR)
D
34.00
Eurazeo, Pierre Kosciusko-Morizet
52.40
Chennai based BankBazaar is a neutral online marketplace that gives instant
customized rate quotes on loans and insurance products comparing products
of India's leading financial institutions.
Pret d’Union provides an online platform to facilitate financial transactions between
individual lenders and borrowers.
4
5
Payever (DE)
Seed
0.55
High-Tech Gruenderfonds
0.81
Combnies different payment and shop application in one register card on a mobile
device.
6
Ant Financial (CN)
A
N/D
National Social Security Fund (NSSF)
N/D
Ant Financial is an online payment services provider that enables individuals and
businesses to execute payments online in a secure manner.
7
InvoiNet (AR)
N/D
4.00
IFC
N/D
InvoiNet makes electronic invoices available for financing within an online
marketplace.
8
FAMOCO (FR)
Venture
4.40
Aurinvest, Bpifrance, Hi Inov
5.40
FAMOCO is creating android-based NFC reading devices.
9
LSQ Funding Group (US)
Private
Equity
40.00
Ares Capital Corporation
140.00
LSQ Funding provides specialized accounts receivable financing to growing
companies.
10
SlimPay (FR)
B
16.60
Prime Ventures (Lead)
16.60
Payment gateway for SEPA Direct Debit and more.
11
Nearex (SG)
B
N/D
Beenos Partners, Tata Capital, Xinvesco
N/D
Nearex offers a proximity transactions system (devices for merchants and
contactless cards for customers).
12
IndiaLends (IN)
Venture
N/D
DSG Consumer Partners (Lead), Siddharth Parekh
N/D
IndiaLends is a digital lending and borrowing marketplace.
13
Lendingkart (IN)
A
10.00
Ashvin Chadha, Mayfield Fund, Saama Capital,
Shailesh Mehta
10.00
Lendingkart is an online financing company dedicated to help entrepreneurs
and small businesses with Working Capital Loans.
14
Karmic Labs (US)
A
5.00
Greycroft Partners (Lead), Marketplace Fund I, LP
7.70
Karmic Labs offers a budget and cash flow planning tool for managers that
allows their employees to request specific amounts of cash for specific events.
15
Toast (SG)
Seed
0.75
Startupbootcamp
N/D
Toast is an online and iOS money transfer app that allows users to send money
instantly without using the current legacy banking network SWIFT.
16
Fundible (UK)
N/D
0.11
Wales Technology Seed Fund
N/D
Fundible offers a platform on which customers can club together to collectively
buy a product or service.
17
BitFury Group (US)
C
20.00
DRW Trading Group, Georgian Co-Investment Fund,
iTech Capital
60.00
BitFury is the leading, fully integrated Bitcoin Blockchain security and
infrastructure provider.
18
KrediTech (DE)
C
110.00
Peter Thiel, N/D
158.00
Kreditech loans money to customers with little or no credit rating.
19
Self Lender (US)
Seed
1.50
Silverton Partners
2.00
Self Lender offers a consumer finance service to help underserved people to
build up credit history.
20
Airbitz (US)
Seed
0.45
Damian Cutillo, Paul Puey, Rick Henri Chan, Tim
Horton, William Swanson
0.45
Airbitz offers a Mobile Bitcoin wallet.
21
ClassWallet (US)
Seed
1.90
3.10
22
Fenergo (UK)
Private
Equity
75.00
Accelerated Growth Partners, Kaplan Ventures,
MaverixLab, NewSchools Venture Fund, William
Guttman
Insight Venture Partners
23
Fastacash (SG)
B
15.00
Rsing Dragon Singapore, Life.SREDA, UVM 2 Venture
Investments
23.50
24
GiftStarter (US)
Seed
0.13
500 Startups
0.16
ClassWallet is a virtual wallet for schools that replaces cash, checks and
interoffice envelopes. Through ClassWallet, administration, parents and
vendors connect with teachers for peer-to-peer funding.
Fenergo offer Client LifeCycle management software to private banks,
spanning the front and back office functions. Covers KYC, CDD, AML,
UDSI, MiFID II, FATCA, Dodd-Frank.
Fastacash allows users to send "value" in the form of money, airtime etc
as well as digital content such as pictures and videos through social networks
and messaging platforms.
GiftStarter is an application offering Gift partial payments.
25
Fastacash (SG)
B
15.00
Rising Dragon Singapore, Life.SREDA, UVM 2 Venture
Investment
23.50
26
Credit Benchmark (UK)
B
20.00
Balderton Capital, Index Ventures
27.00
27
Malauzai Software (US)
Venture
11.00
N/D
24.10
75.00
GFG Group provides consumer electronic payment software solutions to
banks, mobile network operators, and third party processors.
Fastacash allows users to send "value" in the form of money, airtime etc as
well as digital content such as pictures and videos through social networks and
messaging platforms.
Operate a unique model for credit risk data, aggregating anonymized credit risk
estimates from leading banks and financial institutions.
Created mobile banking SmartApps to serve community banks and credit unions.
Page 1
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16
Insight. Opinion.
Target (Country)
Round
Volume
(USDm)
3.60
Investor(s)
28
Estimize (US)
B
29
Ethoca (CA)
Private
Equity
45.00
30
Upstart (US)
C
35.00
Third Party Ventures, Collaborative Fund, First Round,
Khosla Ventures
53.20
31
FlyPay (UK)
A
10.70
Time Out
12.40
32
Linqpays Limited (MT)
Seed
N/D
N/D
N/D
Linqpays offers ist clients Finance management support.
33
ShoCard (US)
Seed
1.50
AME Cloud Ventures, Digitsl Currency Group, Enspire
Capital, Morado Venture Partners
1.50
Digital identity enabled by the blockchain.
34
Privitar (UK)
Seed
1.20
David Cleevely, David Gammon, Gerard Buggy, Sir
Peter, Tom Glocer
1.20
Enables organisations to extract value from sensitive data sets while
complying with regulation and protecting client privacy.
35
Revolut (UK)
Seed
1.50
Balderton Capital, Seedcamp
2.00
36
Innovati (IN)
Venture
5.00
Catamaran Ventures
6.60
Revolut is a card and App which allows customers to pay for items all around the
world with zero fees. It transfers the currency automatically into the local currency
of the country the customer is in. The card is part of the MasterCard scheme.
Solutions for improving operational efficiency and enhancing customer
experience in every payment transaction.
37
CircleBack Lending (US)
A
17.50
N/D
22.20
38
Bitx (NG)
A
4.00
"Digital Currency Group
PayU"
4.80
39
Mint Payments (AU)
N/D
2.94
Vix Investments
N/D
40
Factom (US)
A
1.00
N/D
1.10
41
Money Mover (UK)
N/D
1.00
N/D
2.00
International payment enabler and currency exchange platform for SMEs.
42
Mswipe Technologies (IN)
C
25.00
Axis Bank, DSG Comnsumer Partners, Falcon Edge
Capital, Matrix Partners India, Meru Capital, Olacabs
25.00
mPos solution that links to an bank account and runs on any mobile device.
43
DealStruck (US)
Debt
10.00
Community Investment Management (CIM)
9.50
Lending marketplace connecting profitable, small- and medium-sized businesses
with individual and institutional accredited investors.
44
Bankers Toolbox (US)
N/D
N/D
Accel-KKR
N/D
Banker's Toolbox helps community banks with software based solutions to
prevent money laundering as well as fraud and kite prevention.
45
China Rapid Finance (CN)
C
35.00
Broadline Capital
56.00
Consumer credit access to Chinese consumers. Omni-channel borrower
acquisition system and proprietary Big Data Analytics.
46
Buyatab (CA)
Seed
N/D
N/D
N/D
47
Cognia (UK)
Venture
N/D
Oxford Capital Partners, Swisscom, Vodaphone
4.60
eGift Card Solutions offered to merchants with mobile integration. Customers
can purchase, send and redeem eGift Cards from their mobile device through
text, email or social media.
Cognia has a cloud-based PCI compliance payment processing solutions and
reduce PCI compliance requirements by 90%.
48
Shopkeep (US)
D
60.00
Activant Capital
97.20
Cloud-based Point of Sale for restaurants and retail stores which also allows for
reporting, analytics and customer marketing. Also allows inventory management.
49
OneVest (US)
A
2.00
N/D
5.30
OneVest aims to connect early stage tech companies with accredited investors.
OneVest has over 80,000 entrepreneurs and 15,000 investors registered.
50
Stripe (US)
D
N/D
American Express, Visa, Sequoia Capital, Kleiner
Perkins Caufield & Byers
190.00
Stripe offers online merchants the ability to accept and manage payments.
51
iwoca (UK)
B
20.00
Acton Capital Investors, CommerzVentures Global,
Redline Capital Management
31.50
Lending facility for SME's to access funding similar to larger companies helping
them to place large stock orders and bridging cash flow gaps.
52
Seedrs (UK)
2.50
N/D
22.80
Seedrs offers investors to invest as little as USD 10 per transaction into startups
looking to raise capital. The company completes the most deals in Europe.
53
Crowdcube (UK)
Equity
Crowd­
funding
C
6.00
Balderton Capital, Draper Esprit, Numis, Tim Draper
15.90
54
Cryptocurrency Research
Group (US)
Grant
3.00
National Science Foundation
3.00
Crowdcube enables investors to invest or loan to small companies in return
for equity or an annual return. Platform for startups and investors to meet on
the platform.
The firm is a cross-discipline research firm which focuses on studying
cryptocurrencies and other decentralised consensus tech.
55
BankFacil (BR)
A
3.00
Accion Frontier, Redpoint eventures
4.40
WorldQuant, Bob Greene, Briam Finn, Euromoney
Institutional Investor, Frank V. Sica, Jarrod Yuster, Peter
Nesvold, Ross Garon
Spectrum Equity
Funding
(USDm)
6.20
Description
45.00
Ethoca offers a solution to Fraud by providing a platform to bring together
Card Issuers and Merchants. If Card Issuer notices committed fraud then
the Merchant is made aware through the Fenergo platform.
Upstart is a lending platform, lending money to people based on their
Education and Experience as opposed to their credit score. Upstart offers
3 year fixed rate loans.
Allows restaurant customers to check, split and pay the bill on their
mobile devices.
Financial platform which facilitates the estimation of fundamentals for
independent analysts.
Internet-based consumer lending platform with two aims: provide prime and superprime consumers in the Unite States a fast and efficient way to borrow money at
attractive rates and institutional investors a robust platform to invest in these loans.
Allows acceptance of Bitcoin by merchants and provides Fis with institutional
storage and liquidity tool and access to advance crypto-fiat transfer protocols and
customised solutions.
Omni-channel payments processing solution provider. Focus areas are: Customer
Present (CP) payments via mobile devices such as smartphone or tablets, leveraging
innovative Bluetooth NFC card readers. Customer Not Present (CNP) payments via
the internet such as e-commerce, MOTO, recurring or bill payments.
Factom has developed the Blockchain software to simplify records management,
record business processes and address security and compliance issues.
BankFacil uses Financial Education as a tool to understand what type of loans
are required by consumers and uses Real Estate and Autos as collateral.
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17
Insight. Opinion.
Target (Country)
Round
Investor(s)
A
Volume
(USDm)
5.00
Reinventure
Funding
(USDm)
5.00
56
Beat the Q (AU)
57
Description
GREX (IN)
A
0.63
Chandru Badrinarayan, Kunal Bajaj
0.63
58
SavingsGlobal (DE)
B
21.80
Index Ventures, Ribbit Capital, Tom Stafford, Yuri
Milner
32.00
59
CashStar (US)
D
15.00
FTV Capital, Intel Capital, Mosaik Partners, North Hill
Ventures, Passport Capital
43.00
60
Ezetap (IN)
C
23.50
35.00
61
Payable (US)
Seed
2.10
62
Mogl (US)
Venture
7.90
63
Prodigy Finance (UK)
Venture
12.50
Bergruen Holdings, Capricorn Investment Group,
Helion Venture Partners, Horizons Ventures, The
Social+Capital Partnership
Freestyle Capital, Haystack, Lerer Hippeau Ventures,
Moment Ventures, Redpoint Ventures, Rick Marini,
Rothenberg Ventures, Y Combinator
Aequitas Capital, Avalon Ventures, Correlation
Ventures, Monroe Capital, Moore Venture Partners,
Sigma Partners
Balderton Capital, Ed Wray
64
Cloudability (US)
B
6.00
N/D
15.80
Financial Management tool which enables businesses to track all cloud
based expenses and analyse them to gain data to mentor spending.
65
bitFlyer (JP)
Venture
4.00
6.90
bitFlyer is a trading platform for the virtual currency Bitcoin with either a
private or corporate account.
66
ToneTag (IN)
N/D
1.00
Mitsubishi UFJ Capital
Mitsui Sumitomo Insurance Company
Venture Labo
Reliance Capital
N/D
67
Vendorin (US)
N/D
0.89
N/D
4.90
ToneTag develops a Software, that enables the interaction between a
merchant's and customer's device via sound waves and NFC technology
without the need of a specific hardware.
Vendorin runs a platform for business owners, through which B2B transactions
can be made electronically instead of being handled via checks.
68
Digital Retail Apps (US)
Seed
0.76
Texas Ventures
0.76
69
Xfers (SG)
N/D
0.12
N/D
N/D
70
GuiaBolso (BR)
B
7.00
7.00
71
nVoicePay (US)
Debt
1.80
Ribbit Capital (Lead); e.Bricks Ventures; Ed Baker;
Kaszek Ventures; Mark Goines; Omidyar Network;
Peter Kellner; QED Investors; Valor Capital Group
N/D
10.30
72
Tesorio (US)
N/D
0.12
Y Combinator
0.12
73
iZettle (SE)
D
67.00
175.80
74
PaidEasy (US)
Seed
2.00
Intel Capital (Lead); Zouk Capital LLP (Lead); 83North;
Creandum; Dawn Capital; Index Ventures Northzone;
Santander Innoventures
Ivor Ichikowitz
75
Payoneer (US)
E
50.00
90.00
76
Tyfone (US)
C
6.60
Carmel Ventures, Greylock Partners, Nyca Partners,
Ping An, Susquehanna Growth Equity, Wellington
Management
CIA, David Petraeus, In-Q-Tel
77
Avalon Solutions (US)
N/D
2.00
Privat Investor
5.00
78
MarketInvoice (UK)
Venture
10.00
Paul Forster, VC Northzone
20.40
79
CaptialMatch (SG)
A
0.70
0.70
CapitalMatch offers short term loans to SMEs and investment opportunities
to private people.
80
Drip Capiral (US)
N/D
0.12
CE Tech Invest
Crystal Horse Investments
Innosight Ventures"
Y Combinator
0.12
Drip Capital is offering SMEs short term credits.
81
SericaPay (US)
N/D
0.12
Y Combinator
0.12
An platform through which merchants can accept and customers
make payments.
82
Revel Systems (US)
C
13.50
ROTH Capital Partners
128.50
Revel Systems provides an iPad point of sale solution that is mobile,
cloud-based, and secure.
This state of the art system offers an open API with third party integration,
detailed and extensive real-time reporting, and is the only POS solution
to offer True Offline Mode. Revel Systems exceeds standards set for PCI
compliance, and offers the security of the cloud to allow an owner to conduct
his or her business from anywhere.
Beat the Q allows customers to order on route to the merchant,
thereby skipping the Queue as your order will be ready. Merchants
take payments online.
Grex offers a platform on which high-growth start ups with good upside
opportunities are posted for other investment professionals to potentially
invest in.
SavingsGlobal and its German brand WeltSparen provide on online
infrastructure for savers to find best Deposit rates from International Banks.
CashStar offers personalised gift cards which can be sent instantly, with
omni-channel capabilities. Allows merchants to combine gift cards with
marketing and reward programmes.
Ezetap make a device which can be connected to your smart phone to
enable card payments. Business is developed in India.
2.10
Payable offers contractors the ability to manage and analyse payments as
well as having Onboarding, Work-Tracking analytics.
45.20
Reward App which gives user 10% cash back if they pay by Credit Card
or Debit Card. The user will receive a link which offers them the chance to
donatethat cashback to the homeless.
Loans offered to students who wish to join Business School. Company
has a 99% repayment rate after having loaned out USD 75 million to students.
12.50
2.00
11.90
Digital Retailer Apps offers an mobile application, which allows the client
to scan and pay for items without the assistance of a sales person.
Simultaneously, staff can accept payments via the mobile applications
when serving a client but not using a traditional POS device.
Xfers offers merchants a platform to connect their online bank account
with that of their clients and collect and track payments.
GuiaBolso offers its clients a platform to better manage their money by
helping in financial-decision making and automates the process of improving
and categorizing transactions from users' bank accounts and credit cards.
nVoircePay manages the invoices for the client and coordinates the best
payment method, time of money transfer and thereby reduces the transaction
costs while increasing efficiency.
Tesorio operates a platform through which it is matching vendors and
buyers and uses an algorithm to calculate the financial rates, that appeal
to both. Hereby it is optimizing the working capital demand of its clients.
iZettle provides POS solutions such as card readers for iPhones or tablet.
PaidEasy is a mobile application through which its users connects with
a merchants and can add purchases to her shopping cart which than can
be clear through the application.
Payment Solutions which allows firms to receive, withdraw and send payments
globally. Customers include Google and Airbnb.
Patented, neutral and comprehensive memory card-based payments
solution for mobile contactless payments. Services include Mobile Banking,
Mobile Identity Management, Mobile Remote Payments, Mobile Retail
Services and Mobile Contactless Payments.
Avalon Solutions is engaged in the development of Software as a
Service (SAAS) applications, to provide its clients (small-to-medium businesses)
with payment process solutions such as mPOS.
MarketInvoice pre-finances invoices for family businesses, high net worth
individuals and corporates.
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18
Insight. Opinion.
Target (Country)
Round
83
Grouplend (CA)
A
Volume
(USDm)
10.20
Investor(s)
84
SoFi (US)
N/D
1,000.00 N/D
1,750.00
85
Avant (US)
Debt
325.00
Jefferies & Company
JP Morgan // KKR & Victoria Parc Capital
1,730.00
AvantCredit operates a web based consumer-lending business
for short term loans of up to USD 20k.
86
Dianrong (CH)
C
207.00
China Fintech Fund
Standard Chartered Bank
219.00
Shanghai based Dianrong offers a P2P lending platform.
87
XENDIT (US)
N/D
0.12
Y Combinator
0.12
XENDIT is a mobile wallet through which customers can
transfer money to merchants and friends.
88
Moneytis (FR)
Seed
N/D
N/D
N/D
The firm enables its clients to transfer money to an receiver
in an other currency.
89
Able Lending (US)
B
6.00
Blumberg Capital (Lead); RPM Ventures (Lead)
Expansion Venture Capital; Peterson Partners;
SierraMaya360
12.50
90
Nok Nok Labs (US)
C
16.30
91
Magiccube (US)
Seed
2.20
DaouKiwoom Group; DOCOMO Capital; Thundersoft; 47.80
DCM Ventures; Lenovo Group; ONSET Ventures; Raven
Ventures
Azure Capital Partners; EPIC Ventures; Bialla Venture
2.20
Partners; Visa
Able is a lender for SMEs, offering loans for a period over the term
of 1-5 years and additionally supports the new ventures with advice
on marketing and growth strategy. A normal Able loan consists out
of 25% raised through F&F and 75% added through Able.
Nok Nok Labs offers a user verification solution that allows for an
identification to any application by using the existing security capacities
of their respective device.
The firm has developed a software-only technology that aims to
stops digital-transaction fraud at the endpoint of a transaction.
92
XENDIT (US)
N/D
0.29
Y Combinator
0.41
XENDIT is a mobile wallet through which customers can transfer
money to merchants and friends.
93
Remitly (US)
C
12.00
N/D
34.50
Remitly offers expatriates a money transfer services from a mobile
phone in the US to a mobile phone in a country abroad.
94
InVenture (US)
A
10.00
Collaborative Fund (Lead); Google Ventures
Lowercase Capital; Mesa Ventures
11.20
Allows clients to get a loan via its mobile phone instead of going to
a broker or bank.
95
Electronic Payments (US)
1 Round
5.00
Super G Funding
5.00
96
Paymium (FRA)
N/D
1.10
Galitt; Kima Ventures; Newfund
1.10
The company has a Station-, Mini- (tablet) and Mobile- device, through
which payments can be accepted. In addition, the product supports the
merchant with additional business information such as inventory levels etc.
Paymium is a marketplace for Bitcoin which is tries to secure compliance
standards by working with an approved payment institution.
97
Prospa (AU)
B
60.00
AirTree Ventures; Carlyle Group; Entree Capital;
Ironbridge Capital
60.00
Prospa offers short term loans to Australia located SMEs for the
period of 3 to 12 month.
98
CommonBond (US)
B
35.00
195.70
CommonBond offers a higher education loan to students at a lower rate,
however allowing investors to receive a sustainable return.
99
ShapeShift (CH)
Seed
1.60
August Capital (Lead), Existing Investors, Nyca
Partners, The Social+Capital Partnership, Tom Glocer,
Tom Kalaris, Tribeca Venture Partners, Victory Park
Capital, Vikram Pandit
Digital Currency Group (Lead); Bruce Fenton; Michael
Terpin; Roger Ver; Trevor Koverko
2.40
ShapeShift provides a bitcoin and other virtual currencies exchange.
100
Shift (US)
N/D
50.00
N/D
50.00
101
Kash (US)
Seed
N/D
Structure Capital, Draper Associates, Green Visor
Capital
2.00
Shift is an Mobile application similar to a mobile wallet (regardless
of currency) that is connected with a Visa card, allowing the client to
control money and to make mobile and card transactions.
Kash is a provider of a direct bank mobile payment app that is also
rewarding consumers purchases with deals or free gifts.
102
Chain (US)
B
30.00
Capital One; Citi Ventures; Fiserv; Nasdaq; Orange; Visa
43.70
Chain provides an easy access API to the Bitcoin blockchain that
allows developers to simply integrate Bitcoin protocol.
103
Abra (US)
A
12.00
Arbor Ventures; Carthona Capital; First Round; RRE
Ventures
14.00
104
Case Wallet (US)
N/D
1.00
Future Perfect Ventures
3.15
105
LightSpeed (CA)
C
61.00
Caisse de Depot et Placement du Quebec (Lead);
Investissement Quebec (Lead); Accel; iNovia Capital;
126.00
Abra is an mobile application through which customers can upload
money, transfer it to friends and merchants and withdraw money at
Abra tellers (shops) globally.
Case Wallet is a potable device (size of a credit card) which allows
the customer to pay with bitcoin by scanning a barcode and verifying
ones identity via a fingerprint.
POS software developer LightSpeed develops a mobile payments service.
106
Fundera (US)
B
11.50
14.90
Fundera is an online market place that helps SMEs to facilitate funding
through alternative lending.
107
Satispay (IT)
A
3.50
Susquehanna Growth Equity (Lead); Aaron Levie;
BoxGroup; David Rosenblatt; First Round; Khosla
Ventures; QED Investors; Scott Belsky
N/D
11.20
Satispay is a payment network that can be used for micro payments,
P2P money transfer, in-store and online purchases.
108
PaySur (MEX)
Seed
0.25
N/D
0.28
Allows clients to register at the platform and transfer money to other
users or businesses via registered credit- or debit cards.
109
PeerNova (US)
N/D
6.00
N/D
19.00
The firm offers a platform through which data's validity is secured
based on the blockchain principle.
110
KrediTech (DE)
C
92.00
J.C. Flowers & Co., Amadeus Capital Partners, Värde
Partners, HPE Growth Capital, Blumberg Capital, Peter
Thiel
355.00
German based Kreditech applies Big Data technologies on credit
decisions to give out short term microloans globally.
Lance Tracey (Lead)
Markus Frind"
Funding
(USDm)
10.20
Description
Grouplend offers its clients loans that can be set up via their website.
A credit rating and payment schedule is setup via the website and offers
consumers a convenient way to get a loan.
SoFi is a P2P lending platform for private loans (focusing on educational
loans) that combines reduced rate student loans and career advice.
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19
Insight. Opinion.
Target (Country)
Round
Investor(s)
N/D
Volume
(USDm)
675.00
Description
ANT Financial, Alibaba Capital Partners
Funding
(USDm)
875.00
111
Paytm (IN)
112
Pushpay (NZ)
N/D
18.70
Pie Funds Management
22.60
A
10.00
Morningstar, Mohamed El-Erian, Contour Venture
Partners, Andrea Jung, Ajay Banga
10.00
New Zealand based Pushpay provides a mobile payment app,
which can be used at any registered merchant throughout the
United States, Australia or New Zealand.
US based Ellevest offers an investment platform for women.
113
Ellevest (US)
114
Credible (US)
A
10.00
Soul Htite, Carthona Capital, Ron Suber, Scott
Langmack
12.70
115
Qualpay (US)
A
8.00
N/D
8.00
116
Safe Cash Payment
Technologies (US)
Seed
1.12
Bialla Ventures, Naveen Jain, Vuk Bulajic, Vinh Vo,
Chris Kitze.
N/D
117
Adyen (NL)
Venture
N/D
Iconiq Capital
N/D
India based Paytm is a provider of a mobile commerce platform,
including a mobile wallet.
Credible offers an online lending platform, which is dedicated to
students to get access to loans as well helping them to refinance
their loans afterwards by calculating an individual saving plan.
US based Qualpay is a provider of a multichannel acquiring and
payment processing platform.
Safe Cash offers a crypto currency payment system allowing cash
to be used as a digital asset, with member banks storing U.S. dollars
and providing tokens which are redeemable for cash.
Adyen is a payment service provider specialised in multi channel
web-based payment processing for merchants - via web shops, at
the POS as well as mobile applications.
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Insight. Opinion.
20
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