Research Briefs

Fin Tech,
Q114 to Q215

A data-driven look at fin tech trends and

disruption in financial services

Table of Contents
Fin Tech Overview
The Future of FinTech and Banking: Global Fin Tech
Investment Triples in 2014

Where is the Smart VC Money Going in Fin Tech?

Follow the Unicorns

Early-Stage Fin Tech Funding is on Pace for the

Biggest Quarter of the Last Three Years

The Periodic Table of Fin Tech

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Banks and Corporates

Heres Where 6 Banking Giants are Placing their
Bets on Fin Tech Startups

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Disrupting Banking: The Fin Tech Startups that are

Unbundling Wells Fargo, Citi and Bank of America

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Google, Intel, and Other Tech Companies Attack

Fin Tech as Corporate Interest in Space Jumps 176%

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Fin Tech Focus: Mobile and Millennials

The Mobile Fin Tech Landscape

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Millennial Personal Finance - The Fin Tech

Startups Targeting Millennials

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March 26, 2015

Fin Tech Overview

The Future of FinTech and Banking: Global Fin Tech Investment

Triples In 2014
Accentures new report The Future of FinTech and Banking uses CB Insights data to highlight trends in global financial technology and the markets that are seeing the most growth.

Global investment in financial technology or FinTech spiked in 2014 reaching more than $12B in investment, demonstrating that the digital revolution
in the sector is well underway. As fintech companies continue to grow and
unbundle banks like Citi, Wells Fargo and Bank of America, established financial players are taking steps to make sure they stay ahead of the trend.
Those are among the many highlights of Accentures new report The Future of Fintech and Banking: Digitally disrupted or reimagined? which is
based on CB Insights data.
The report offers insightful commentary and analysis around Fin Techs
growth trajectory and how banks can stay competitive against their smaller
tech incumbents. Below are some highlights in the Accenture report. The
entire 12-page report can be downloaded for free by logging into CB Insights and visiting the Research tab. If you dont have an account, you can
create one for free here (note: if youve already hit free trial limits, you wont
be able to get the report).

Global Fintech Investment explodes in 2014

Global fintech investment jumped 201% between 2013 and 2014, breaking
the $12B mark across more than 730 deals. The US makes up the lions
share, but Europe experienced the highest level of growth, with an increase
of 215% (year-on-year).

UK and Ireland Continue to Dominate EU Fintech

Whilst the UK and Ireland dominate Europes fintech investment, the rest of
Europe is showing promise: the most significant levels of investments were
in the Nordic countries ($345 million), the Netherlands ($306 million) and
Germany ($82 million).

Silicon Valley Increases Their Fintech Investment Pace

While UK Slows Down
Fintech investment growth in the UK and Ireland was slightly slower (up
136% to $623 million) although the region accounted for 42% of European
investment. Following a relatively slow 2013, fintech investment in Silicon
Valley more than doubled (117%), pushing the start-up hotspot over the $2
billion mark, more than the total investment in Europe ($1.48 billion).

July 26, 2014

Fin Tech Overview

Where is the Smart VC Money

Going in Fin Tech? Follow the
Unicorns

Fin Tech deal activity by 12 top VC firms ranging from Sequoia Capital to
Andreessen Horowitz has grown 61% from 2010 to 2013.
If trying to understand the emerging business models, technologies and
disruption in Fin Tech, one of the smart ways we are seeing financial services firms do this is by following deals and investor money flowing into Fin
Tech companies. But instead of tracking all investors, lets follow the smart
VC money since as we all know, not all VCs are created equal.
And within the Fin Tech universe today, the smart money VCs are investing
in technologies ranging from peer-to-peer loan marketplaces to mobile payments to big data tools for capital markets.
As new innovation rapidly makes its way through the financial services
sector, Fin Tech investments across the entire ecosystem have exploded in
recent years. Of note, a recent report released by Accenture and the New
York City Investment Fund using CB Insights data found global Fin Tech
investments reached nearly $3B in 2013 from under $930M in 2008.
This research brief highlights the Fin Tech investment activity of 12 of the
top venture firms as identified by our tech unicorn VC analysis. The VC
firms whose Fin Tech investments are analyzed include:

Accel Partners
Andreessen Horowitz
Battery Ventures
Benchmark Capital
Bessemer Venture Partners
CRV

Greylock Partners
Kleiner Perkins Caufield & Byers
New Enterprise Associates
Redpoint Ventures
Sequoia Capital
Union Square Ventures

2014 will be a record year for smart VC investment in

Fin Tech
Looking at deal activity within the Fin Tech market since 2007 by these 12
VC firms, we see a significant surge in deal activity since 2009. In fact, total
Fin Tech deals by the 12 firms in 2013 grew 61% compared to 2010 and a
notable 309% compared to 2009. The growth in Fin Tech deals accounts
for both new investments as well as follow-on bets to Fin Tech startups
ranging from Stripe to Wonga to Betterment to Level Money.

Which areas within Fin Tech are top VCs bullish on?
Using the CB Insights Business Social Graph, we visualized the universe
of Fin Tech companies that the 12 VC firms have invested in since 2007
and find hundreds of deals within Fin Tech that the top firms have participated in.

While Fin Tech investments span a diverse array of companies ranging

from payments to asset management to personal financial management,
there appear to be several themes that these brand-name venture firms
see opportunities in. When we use the Business Social Graph inputs and
cluster companies by focus area, four markets emerge as being consistent
areas of focus among the top 12 venture firms. These include:

Lending
Personal finance management
Payments technology
Bitcoin

With hundreds of investments, there are many fledgling as well as many

more established private companies on the list. Some of the startups
which feature investment from multiple investors include Square (backed
by Sequoia and Kleiner Perkins), Boku (Benchmark, NEA, A16Z), Stripe
(Sequoia, Redpoint, A16Z), Coinbase (A16Z, Union Square Ventures) and
Funding Circle (Accel, Union Square Ventures).

As financial services institutions increasingly begin to monitor the changing

landscape before them, following the smart money is perhaps one of the
best ways to understand the trends they should stay ahead of and the companies they may want to watch from a competitive, acquisition, partnership
or procurement perspective.
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June 4, 2015

Fin Tech Overview

Early-Stage Fin Tech Funding Is

On Pace For The Biggest Quarter Of The Last Three Years

Early-stage fin tech funding this quarter could surpass the previous high by
more than $200M.

in the number of deals and up 23% versus the same quarter a year prior.
Things dont look to be slowing down as Q215 is on pace for largest
amount invested since the start of 2012. So far, the Q215 deals include
over ten $10M+ Series A financings, among them Ripple Labs $28M and
Patch of Lands $23.8M financings. Q214 holds the previous quarterly
high, with early-stage Fin Tech funding reaching $437M in that quarter.

Top early-stage Fin Tech companies

We used CB Insights Company Mosaic to analyze some of todays top
early-stage fin tech startups globally. Mosaic takes into account various
quantitative factors to rank startups, including fundraising, web traffic, social
media traffic, and job listings, among other things.
Ireland-based money-transfer company CurrencyFair topped our list. The
company most recently raised a $10.7M Series A in April 2015 from Octopus Investments and Frontline Ventures. Germany-based modern-banking
startup Number26 was second, as the companys web traffic has increased
drastically in the months leading up to its $10.6M Series A in April 2015.
Notably, 3 of the top 5 early-stage fin tech companies per Mosaic are based
outside of the US.

Most active early-stage VCs

The usual suspects topped the list of most active early-stage VCs in Fin
Tech since 2012, with 500 Startups, Google Ventures, and SV Angel rounding out the top 3. 500 Startups more notable investments include Chain, a
tool for developers to build apps related to the blockchain, as well as Lettuce, a small business finance-management tool that was acquired by Intuit
in May 2014.
Google Ventures, the most active corporate venture investor overall in Fin
Tech, also has made many early-stage bets in the space since 2012. Their
notable investments include ZenPayroll, which recently raised a $60M Series B at a $560M valuation and Robinhood which raised a $50M Series B
in May 2015. Google Ventures is a seed investor in both companies.
See below for the full ranking.

December 12, 2014

Fin Tech Overview

The Periodic Table of Fin Tech

The 177 companies, VCs, corporate investors, angels, accelerators, and
acquirers engaged in the Fin Tech space that you should know.
Financial services is under assault. From wealth management to remittances to payments processing, the landscape of private companies, investors
and corporate strategics investing and acquiring in financial technology,
otherwise known as Fin Tech, has grown immensely.
So after putting out the Periodic Table of IoT, were excited to introduce
our second industry cut the Periodic Table of Fin Tech a resource to
help illuminate the key players in Fin Tech ecosystem. The 177 companies,
investors and acquirers on the table were pulled from analysis using CB
Insights data around financial health, company momentum, investor quality
and M&A/IPO activity.

We expect that this list of 177 will change over time as new entrants
emerge and gain prominence and others falter, exit and/or get removed.

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Navigating the Periodic Table of Fin Tech

The table focuses on seven different types of organizations as follows (from
left to right).
The left side of the Periodic Table of Fin Tech includes companies
across several key Fin Tech verticals. Additional details on these sub-areas of Fin Tech are below.
On the far right, the table shifts to venture capital firms (both multi-stage
and micro VCs), corporate investors, angels, accelerators/incubators
selected based primarily on total portfolio investments into Fin Tech and
recency of investment in Fin Tech (since 2009). Not surprisingly, several
Fin Tech-specific funds and accelerators made it on to the table.
The bottom section below is acquirers and notable Fin Tech exits.
As disruptive startups look to tackle different segments of traditional financial services, we analyzed Fin Tech companies within seven sub-industries
detailed below:
Lending
Private lending companies on the list includes primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine
learning technologies and algorithms to assess creditworthiness.
Payments/Billing Tech
Private payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.
Personal Finance/Asset Management
Private tech companies that help individuals manage their personal bills,
accounts and/or credit as well as manage their personal assets and investments.

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Money Transfer/Remittance
Private money transfer companies include primarily peer-to-peer platforms
to transfer money between individuals across countries.
Digital currency
Companies here span key software or technology firms in the digital currency space ranging from bitcoin wallets to security providers to sidechains.
Institutional tools
Companies either providing tools to financial institutions such as banks,
hedge funds, mutual funds or other institutional investors. These range
from alternative trading systems to financial modeling and analysis software.
Equity crowdfunding
Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.
Venture Capital Firms
Venture capital firms included make venture equity investments across the
stage spectrum and geographies focusing on Fin Tech companies. The VC
firm category spans both micro VCs and large multi-stage firms with LP
commitments ranging from $25M to well over $1B+.
Corporate Investors
Corporate investors into Fin Tech include both corporations making direct
investments and separately identifiable corporate venture units such as Citi
Ventures or BBVA Ventures.

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Angel Investors
Fin Tech angel investors listed are individual angel investors who offer early-stage capital, advice and networks to startups in exchange for equity or
convertible debt.
Accelerators/Incubators
Accelerators and startup incubators typically offer some combination of equity investment, mentorship and resources around company development.
Those on the Fin Tech periodic table have either funded a number of Fin
Tech portfolio companies or have a specific focus on Fin Tech i.e. Boost.vc,
FinTech Innovation Lab.
Fin Tech Acquirers
Key public corporations that have acquired private FinTech companies in
the last five years.
Notable exits
Key Fin Tech companies that have been acquired or went public in the
last 5 years ranging from lending and money transfer firms (Lending Club,
Xoom) to personal finance and bill paying tools (Check, Mint.com).

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July 14, 2015

Banks and Corporates

Heres Where 6 Banking Giants

Are Placing Their Bets On FinTech Startups

Major banks including Goldman Sachs, Morgan Stanley, Citi, and Bank of
America share overlapping investments in financial tech startups.

Funding to financial technology is thriving as startups in the space harness

major trends like big data, mobile, and social networks.
Major banking giants arent sitting on the sidelines as they see some of
these startups attack traditional banking segments, including payments,
wealth management, and billing.
Six major banks Bank of America, Citigroup, Goldman Sachs, JPMorgan
Chase, Morgan Stanley, and Wells Fargo have made strategic investments in 30 financial tech (fintech) companies since 2009, according to CB
Insights data.
Of the six banks, Citigroup has been most active primarily through its
strategic venture arm Citi Ventures which has invested in fintech startups
ranging from Betterment to Jumio to Square. Goldman Sachs, as weve
previously detailed, has increasingly ventured into fintech startup investing,
with thematic investments across payments tech and big data finance.

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The chart below shows total fintech deals (new and follow-on) by the six
banks since 2009. Note: Debt and lines of credit were not included in the
analysis.

One useful way to visualize investor strategies in fintech is to use CB Insights Business Social Graph, which shows how the banks investments
intersect and diverge. Interestingly, the six banks investments overlap in a
number of cases, as the visualization below highlights.
JPMorgan and Goldman Sachs for example, have both backed Motif Investing, a San Mateo, California-based online brokerage allowing users to
buy baskets of stocks. Morgan Stanley, Bank of America, and Citi (as well
as UBS and Jefferies) have all invested in Visible Alpha, a startup offering a
platform for aggregating and interpreting stock analyst models and forecast
data. Perhaps most notably, mobile payments company Square has garnered investments from four separate bulge-bracket investment banks as
its valuation climbed to $6B: Goldman Sachs, Citi Ventures, JPMorgan, and
Morgan Stanley.

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More thematically, several categories have been prominent for bank investments in fintech:
Payments tech: A number of the banks have invested in various payments
startups ranging from Square and Obopay in mobile payments, to business-payments network BIlls.com, and online transaction company Revolution Money. The latter was acquired by American Express in 2010.
Data analytics: Another hot area is big data analysis as it pertains to financial services. Goldman Sachs and Bank of America share an investment in
Context Relevant, which offers an advanced analytics platform for financial
services. Goldman has also invested in Kensho Technologies, Dataminr,
and Antuit in this category. Citi Ventures counts big data analytics firm
Ayasdi as a portfolio firm.
Two other areas that saw multiple bank investments include personal finance tech (Betterment, Motif) and P2P lending (Prosper Marketplace and
Lufax).

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March 22, 2015

Banks and Corporates

Disrupting Banking: The FinTech Startups That Are Unbundling Wells Fargo, Citi, and Bank
of America
Traditional banks are under attack from a number of emerging specialist
startups. Here are the FinTech startups unbundling banking.

In November, Tom Loverro of RRE Ventures wrote that banks are under
attack and showed a few of the major players leading this trend. Inspired
by his post and Alexander Peases, we wanted to dig in and see how banks
are being unbundled by startups. The graphic below details companies
attacking bank services ranging from robo-advisers wealth management
services like Wealthfront and Betterment to small business loan companies
like OnDeck Capital and Kabbage to small business service providers like
Zenefits and ZenPayroll, and many other areas.
As we detailed in our analysis of the startups disrupting FedEx, these
emerging companies attacking Wells Fargo, Bank of America, Citi and
banking more generally are not attacking them head on across multiple
products. Instead, theyre attacking individual services & products (hence
the term unbundling). Said another way, are banks going to be out-innovated and lose their edge not because of their incumbent, large competitors, but because emerging startups inflict upon them a death by a thousand cuts?

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While many international players are also unbundling banks, this infographic focuses on US-based companies. Well separately analyze the international players going after banks.

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May 31, 2015

Banks and Corporates

Google, Intel, and Other Tech

Companies Attack Fin Tech as
Corporate Interest in Space
Jumps 176%
As corporations ramp up investment activity into fintech, what sectors are
companies like Google and Intel focusing in on?
Investment dollars into Financial Technology (Fin Tech) tripled in 2014.
Strategic or corporate investors are one of the key drivers of the increase
as the emergence of Fin Tech has corporates ranging from Google to MasterCard to Citigroup actively investing in the space. This research brief
highlights investing trends by corporates in the Fin Tech space, including
the rising number of corporate investors, the most active corporates and
where the top non-financial services corporations are looking in Fin Tech.
One of the most interesting facets of the recent fin tech boom is the emergence of these unusual suspect investors who see massive opportunity in
disrupting traditional financial services.

Corporate investors in Fin Tech rise 176%

Fin Tech is top of mind for many of the largest corporations in the world. In
2014, more than 90 unique corporations invested in Fin Tech startups, a
176% increase from 2010.

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Fin Tech funding with corporate participation set to

double
Deals and investment dollars involving corporates are also on the rise, with
2015 set to double 2014s funding levels. $1.4B was invested across more
than 110 deals last year, which included twelve $50M deals including Mozido, Credit Karma, and OnDeck Capital. 2015 has already seen more than
$700M invested, including large deals in Coinbase and LendingHome.

The most active corporates in Fin Tech

While large financial players like banks and insurance providers are investing at a higher rate, the chart of most active corporate investors in Fin Tech
is topped by tech companies. The top investor is Google Ventures, who has
made 25 unique company investments into Fin Tech since 2010, followed
by Intel Capital who was the only other investor with more than 10 investments into the space.

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Where the unusual suspects are investing

Of the top 3 non-financial players (Google, Intel, and eBay), Intel and Ebay
have more specific investment focuses. While Intel is very focused on payments tech/mobile payments, Ebay is more focused on mobile commerce
and ecommerce enablement.
Intel has notably made a large number of investments outside of the US,
including companies like iZettle (Sweden), Elike (Brazil), and UUCun (China). While Ebay has not made as many investments as the other tech
giants, it has acquired two of its investments (Magento and BillSafe).

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Google on the other hand has made investments across a wider

spectrum of fin tech spaces ranging from small business loans (OnDeck
Capital) to personal savings (Hello Digit). Four of the spaces Google seems
particularly interested in are crowdfunding, digital currency, trading tools,
and back office software with at least three investments in each. Below are
some of the select areas these non-financial investors are focusing on.

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May 28, 2015

Fin Tech Focus: Mobile and Millennials

The Mobile Fin Tech Landscape

Mobile Fin Tech companies are garnering significant interest from investors. We looked at the financing trends, biggest deals, and top companies.
Mobile Fin Tech investment activity has picked up drastically thus far this
year, with over $1.1B raised in equity financings globally across 58 financings. This is part of a larger trend, which has seen mobile Fin Tech funding
top $300M in 4 of the last 5 quarters, including Q215, which already is
the biggest quarter since 2012 behind multiple nine-figure investments to
One97 Communications (Paytm) and Max Levchins Affirm.
Overall Q115 funding, which reached $372M, was up 238% versus the
same quarter a year prior.

One97 Communications, the maker of Paytm, Indias largest mobile commerce platform, has accounted for 2 of the 3 largest deals to Mobile Fin
Tech thus far this year, having raised a cumulative $575M from Alibaba and
their financial arm Ant Financial Services Group. The company is now valued at upwards of $1.8B.

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Overall, 4 of the 10 largest deals went to Asian companies, with Enniu

Internet Technology, maker of u51, a mobile credit card management and
analytics platform raising $50M, and Indias MobiKwik, a mobile wallet
company, raising a $25M Series B. Cumulatively the top 10 deals thus far
in 2015 have raised over $1B.

We used CB Insights Company Mosaic to assess the health and momentum of some of todays top Mobile Fin Tech companies. Mobile payments
company Square scored the highest, with a 960 (out of 1000) overall Mosaic score. Square most recently raised a second tranche of Series E investment from Victory Park Capital and Colchis Capital for an undisclosed sum.
The company was last valued at $6B.
Robinhood, the commission free investment platform ranked second, with a
940 Mosaic score. The company just raised a $50M Series B in early May,
which drove a jump in news mentions and social media traffic.
India-based MobiKwik rounded out the top three, as the mobile wallet company has a Mosaic score of 920. Mobikwik raised a $25M Series A in April
2015 from investors such as Sequoia Capital India, American Express Ventures, and Cisco Investments.

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The top 10 Mobile Fin Tech companies by Mosaic below:

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May 24, 2015

Fin Tech Focus: Mobile and Millennials

Millennial Personal Finance

The Fin Tech Startups Targeting
Millennials
Fin Tech startups targeting the millennial demographic have raised over
$2.29B across 126 deals. They range from robo-advisors offering lowcost alternatives to brokerages to lending firms innovating in credit risk to
stock-picking and automated savings apps.
Spanning a cohort born between 1980 to 2000, millennials broadly make
up one of the largest generations in history (bigger than the baby boom
generation). Millennials are also investing, lending and sharing money
much differently than their parents, and they are assisted by a growing set
of tech-driven tools to do so.
The changing ways in how millennials manage their money is top of mind
for many of the largest financial institutions in the world. In February, Goldman Sachs released an infographic on how millennial habits in health, marriage, housing and more are impacting the economy.
Now, a host of Fin Tech startups, and the investors backing them, are banking on millennials as a key demographic for their success. Fin Tech startups
prominent in the millennial demographic range from robo-advisors offering
low-cost alternatives to brokerages to lending firms innovating in credit risk
to stock-picking and automated savings apps.
Many of the Fin Tech startups are leveraging existing technologies already
popular among young adults such as social networks and mobile messaging. Project crowdfunding sites GoFundMe and Andreessen Horowitz-backed Tilt, for example, mirror or take advantage of social networks
and are largely popular among college audiences. Google Ventures and
General Catalyst-backed HelloDigit transfers money directly via text message.
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The graphic below breaks down the set of Fin Tech companies appealing to
the millennial generation including Robinhood, Acorns, Wealthfront, Earnest
and more. In aggregate, millennial Fin Tech startups below have raised
over $2.29B across 126 deals. Click the graphic to expand.

Below is a full list of the companies on the graphic broken down by target
area. If there are other emerging companies that you think should be highlighted, leave them in the comments as well.

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