FinTech in Europe: Early signs of Brexit impact?

February 2016

In last 5 years, venture capital invested €6.4 billion in

European FinTech, of which 37% in UK (33% in 2016)

2

Top countries by funding

€ 2,376M

€ 1,180M

€ 812M

€ 488M

€ 352M

€ 319M

€ 130M

€ 129M

€ 95M

United Kingdom

Israel

Germany

Sweden

Netherlands

France

Ireland

Spain

Italy

2012-2015 2016

Source: Dealroom.co

1. Source: Bloomberg.

United Kingdom

Israel

Germany

Sweden

Netherlands

France

Ireland

Spain

Italy

Notable examples

By comparison: JPMorgan’s annual

technology budget stands at $9.6 billion (1)

€ 1,845M

€ 1,771M

€ 607M

€ 545M

€ 512M

€ 456M

€ 368M

€ 363M

€ 310M

€ 303M

€ 223M

€ 178M

€ 165M

€ 110M

Payments

Banking, credit & loans

Security

Investment management

Crowdfunding

Business software

Big data

Transfers

Analytics

Small business

FX & Trading

Cryptocurrency

Insurance

Comparison marketplaces

2012-2015 2016

Top categories are payment services and loans. Funding is

mostly going into B2B but B2C models are catching up

3

Top categories by funding (1) Notable examples

Payments

Banking, credit & loans

Security

Investment management

Crowdfunding

Business software

Big data

Transfer

Analytics

Small business

FX & trading

Cryptocurrency

Insurance

Comparison marketplaces

1. Some companies overlap, and therefore doublecounting between industries, resulting in them adding them up to more than total investments.

Source: Dealroom.co

Financial price comparison has needed little capital but produced many exits: https://app.dealroom.co/exits/f/industries/fintech/tags/price%20comparison

Funding by modelB2B: €4.0 billion B2C: €1.8 billion

Steady increase in both large and smaller FinTech rounds.

2017 is on track for another strong quarter

Boku €31.8M iZettle €28.5M SumUp €18.2M borro €23.6M3V Transaction

Services €23.2MAlpha Payments Cloud €10.9M

Calastone€16.4M

Funding Circle €33.6M

Klarna €90M iZettle €50.3MFunding Circle

€59.1MAdyen €227.3M

WorldRemit€90.9M

Funding Circle €136.4M

Prodigy Finance €90.9M

Atom Bank €98.4M

Starling Bank €57.6M

Number26 €36.4M

OurCrowd€65.5M

Payoneer€163.6M

eToro €13.6MKaminario

€25.5MOpenGamma

€13.6Mbroadbandchoic

es €12MAppGratis €12.3M

flock €8.2M Simplee €9.1M Proxama €12MWorldRemit

€36.4MKreditech €36.4M

KnC Miner €12.7M

Kaminario €48.4M

TransferWise €52.7M

Checkmarx €76.4M

Kreditech €82.5M

Ebury €75.5M JFrog €45.5MFairstone Group

€35Msmava €30.9M

Giesecke & Devrient €80M

CloudLock€7.9M

EXTRABANCA €15M

Paymill €11.8MObjectWay

€10MAuxmoney

€10.9MCentralway €7M flock €6.1M

LendInvest€10.2M

Future Finance €24.1M

Nutmeg €28.8MRateSetter

€12MAtom Bank

€30MKaminario

€36.4MLendInvest

€26.4MiZettle €60M

Cybereason€53.6M

WorldRemit€40.9M

Finanzcheck.de €33M

FinanceFox€25.5M

Tandem €42M

SOHO OS €7.3MFunding Circle

€14.5Mpayleven €10M ezbob €3.8M Fortumo €9.1M

ComparaMeglio.it €6.5M

Meniga €5.9MPret d’Union

€10MPayoneer €22.7M

TransferWise €22.7M

SumUp €11.8MBlockchain

€27.3Mpayleven €24M

Cybereason €22.7M

Adyen €50MTransferWise

€52.8MSpotcap €28.6M Klarna €29.1M Velocity €20.5M Nutmeg €33.6M

Leetchi €5MAccumulate

€9.1MTapingo €3.2M Kreditech €3.6M Paymill €4.5M

TransferWise €5.5M

iPAYst €5.4M Bitstamp €9.1M Duedil €15.5MOurCrowd

€22.7MZooz Mobile

€10.9MeToro €24.5M

RateSetter€24M

Tapingo €20MPayoneer€45.5M

SentinelOne€22.7M

ezbob €24M Tandem €26.4MTopcompare.be

€20MBillfront €30M

Currency Cloud €3.6M

mySupermarket€9.1M

MoneyFarm€3M

TIM Group €2.2M

JUSP €4M iZettle €5MJudo Payments

€4.5MCheckmarx

€7.3MCloudLock €15M Ebury €21.6M Zooz €10.9M Trustly €23M borro €17.3M Lendico €20M Bima €34.9M

illusive Networks €20M

Future Finance €22.8M

TransferWise €23.6M

Deposit Solutions €15M

iwoca €30M

Gastrofix €1.8M E-Blink €8.5MCurrency Cloud

€2.7MDocTrackr €1.8M Seedrs €3.1M Duedil €4.5M Kreditech €4.5M

Aria Networks €3.6M

Tapingo €9.5M Bima €20M Osper €9.1MBitFury Group

€18.2MKnCMiner€13.7M

Azimo €18.2MPret d’Union

€30.9MMoneyFarm

€16MRiskified €22.7M Zooz €21.8M

Afrimarket€10M

iwoca €24M

Flattr €1.6M Superb €7.1M LifePay €2.4M ERN €1.8M Masabi €2.5M GoCardless €3M Ebury €4.2M IQcard €3.4M Azimo €9.1MBitFury Group

€18.2MLightCyber

€9.1M

Bitnet Technologies

€13.2M

Digital Origin €13.6M

Currency Cloud €16.4M

AcadiaSoft €27.3M

Euroloan €15MLendInvest

€20.4MOrderbird €20M Clark €9.9M Nutmeg €13.4M

Top 8rounds:

4Source: Dealroom.co

Note: 2017 Jan Feb show actual only. March 2017 not included.

Full 2017 so far data: Nearly €600M in funding rounds

€ 84M

€ 157M

€ 72M € 71M € 88M € 78M€ 103M

€ 130M

€ 335M € 347M

€ 213M

€ 525M

€ 405M

€ 509M

€ 639M

€ 486M

€ 604M

€ 524M

€ 388M

€ 649M

€ 599M

39 39

25 31 32

44

56 56

67 69 76

71

74

87

73 86

131

105

95

117

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jan

2012 2013 2014 2015 2016 Feb

Amount raised (€ M) Top 8 rounds (€ M) Number of rounds

In 2016, UK funding of FinTech companies dropped 29%

whereas European FinTech funding grew by 38%

5

Europe excl. UK United Kingdom

<- same scale ->

€ 263M € 245M

€ 1,004M€ 1,059M

€ 1,465M

€ 121M € 155M

€ 416M

€ 984M

€ 700M

87

121

175

227

344

47 67 108

94 104

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Rest of Europe United Kingdom

Amount raised (€ billion) Number of rounds

Source: Dealroom.co

In 2015, UK fintech alone was almost the same size as rest of Europe. In 2016, it is half.

Number of rounds held up well.

€ 10M

€ 29M€ 35M€ 47M

€ 11M€ 23M

€ 41M

€ 79M

€ 119M€ 105M

€ 120M

€ 71M

€ 223M€ 239M

€ 249M

€ 272M€ 260M

€ 131M

€ 106M

€ 203M

€ 227M

9

15

5

13 13

8

13 10

15 19

23

33 30

25

20 21

30

25

18

30

21 24

29

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jan

2012 2013 2014 2015 2016 Feb

Amount raised (€ M) Seed Early VC (A, B, C) Late (D+) Total number of rounds

June 2016 Brexit vote coincided exactly with sharp decline

in UK fintech funding, but Q1 2017 is already higher again

6

Europe excl. UK United Kingdom

Source: Dealroom.co

Note: 2017 Jan Feb show actual only. March 2017 not included.

Brexit vote in June 23, 2016

€ 74M

€ 129M

€ 36M€ 24M

€ 78M

€ 54M€ 62M

€ 50M

€ 216M

€ 242M

€ 92M

€ 454M

€ 181M

€ 269M

€ 390M

€ 215M

€ 343M

€ 393M

€ 283M

€ 446M

€ 372M

32

51

5

26 26

17 18 22

29

37 33 34

39

51 51 53

57

48

68

101

84

71

88

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jan

2012 2013 2014 2015 2016 Feb

Amount raised (€ M) Seed Early VC (A, B, C) Late (D+) Total number of rounds

<- same scale ->

€ 121M€ 155M

€ 416M

€ 984M

€ 700M

€ 64M € 46M

€ 221M

€ 349M

€ 500M

€ 67M € 40M€ 106M

€ 205M

€ 394M

€ 17M € 37M € 42M€ 95M

€ 128M € 114M € 122M

€ 635M

€ 410M€ 443M

47

67

108 94

104

12 14 22 27 28

21 25 35

43

67

7 14 19 21

56 47

68

99

136

193

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

United Kingdom Israel Germany France Rest of Europe

Amount raised (€ billion) Number of rounds

€ 40M

€ 6M

€ 216M

€ 139M

€ 87M

€ 5M € 3M

€ 248M

€ 68M

€ 27M

€ 3M € 1M€ 22M

€ 40M

€ 64M

€ 2M

€ 41M€ 31M

€ 12M

€ 43M€ 64M € 71M

€ 118M

€ 151M

€ 221M

5 3

17 19

50

3 5

16 23

17

5 6 13

19 20

3 8

3 6 11

31

46 50

69

95

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Sweden Netherlands Spain Ireland Rest of the rest

UK is still leading in Fintech, but rest of Europe and

especially Israel are catching up

7

Adyen

iZettle, Klarna

Adyen, iZettle, Klarna

Source: Dealroom.co

8

Relatively few exits in FinTech, except in payment services.

FinTech is still a young category, in VC context

€ 26.3B

€ 13.9B

€ 13.7B

€ 11.6B

€ 7.2B

€ 6.9B

€ 6.7B

€ 6.5B

€ 4.8B

€ 4.0B

€ 3.8B

€ 3.7B

€ 3.6B

Gaming

Fashion

Enterprise software

Food

Transportation

Financial

Search

Travel

Healthcare

Security

Content

Semiconductors

Real estate

2014 2015 2016

Note: some overlap, and therefore doublecounting between industries, resulting in them adding them up to more than total exit volume.

1. Comparison of capital invested in same years. Not return on capital. Only indicative of relative capital efficiency till thus far of industry.

29.5x

4.7x

2.3x

3.2x

2.6x

1.1x

6.1x

2.7x

1.0x

2.0x

2.2x

7.4x

7.3x

Capital efficiency ratio (1)

Search includes Yandex, Trivago, Skyscanner, and Momondo but also financial product comparison sites / marketplaces like Gocompare, Verivox, Facile, MoneySupermarket, Gruppo MuitiOnline

Exits include: Markit, Worldpay, Misys, Skrill, VocaLink and others

9

More online resources on Dealroom

Companies Exits

Rounds Map

10

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