Fintech Decoded a Biannual Report Tracking Investment Activity in Fintech Companies 1H-2019 CONTENTS

Fintech Decoded A biannual report tracking investment activity in Fintech companies 1H-2019 CONTENTS

01 GLOBAL Global Fintech deals peak in 2018, decline in 1H-2019 Steep drop in early stage deal volume; deal activity resilient in late-stage VC Median deal sizes continue to grow 02 AMERICAS North America continues to witness surge in VC funding Marginal decrease in median deal sizes Mega deals boost funding in Lending and Payments 03 EUROPE Fintech funding in Europe on track to reach record high in 2019 Lending, Insurance, and Business Solutions deals grow in value, but shrink in volume Better funding activity in Payments and Financial Markets in 1H-2019 after slump in 2018 04 ASIA VC funding deal activity drops to lowest level since 2014 Deal activity declines across stages, but most in early stage All major Fintech verticals witness steep decline in funding Executive Summary

Overall the VC funding activity in the Fintech sector has increased from $7.5 billion in 1H-2017 reaching Welcome to the first edition of Aranca’s $11.1 billion in 1H-2019. Payments segment which has been the most significant contributor to Fintech ‘Fintech Decoded’ report, a bi-annual universe is showing signs of maturity as the late stage companies are attracting bulk of the funding. publication where we highlight some major Companies such as Margeta, N26 and Chime have each raised over $200 million in funding. Interestingly, trends in VC funding within broader UK based start-up, Checout.com, raised $230 million in Series A funding at $2 billion post-money valuation Fintech universe across key markets in for expansion of Payments services in Latin America and Asia. first half of 2019. On the other hand, ‘financial markets’ vertical (companies focused on developing solutions for capital market participants) has attracted majority of the funding in the early stages. Interestingly, Carta, raised The outlook for the Fintech space $300 million to build a stock market for private companies. continues to be highly positive with the rapid innovation in payments and The funding activity in the technology enabled lending space has been declining Q-o-Q due to the transformation in digital banking arena. tightening of regulations in emerging markets such as China (world’s largest P2P lending market) where the government has taken an initiative to crackdown P2P lending companies after the recent defaults. With increased regulatory pressure, deal However, the student lending platforms continue to attract VC funding. Companies such as SoFi and activity in first half of 2019 indicates Affirm have recently raised $500 million and $300 million respectively and are planning to offer wealth investors have become cautious in funding management services to their borrowers. businesses in sectors like lending and Challenger banks and Neo-banks have prominently been on the investor’s radar due to their innovative crypto currency That said, astute investors service delivery models. The funding is still at a nascent stage as regulations are shaping up. The concept continue to back innovative companies of branchless banking has sprung across the globe and we are seeing companies targeting banked and catering to targeted customer segments or unbanked customers offering product and service customization. These businesses are focused, providing expanding into untapped geographies. a step beyond the current banking system by leveraging technology to reduce operating costs, improve We hope you will find this edition an service quality, and expand the customer reach. interesting and informative read. Fintech 688 deals 688 across $ globallyclocked in 1H In Fintech companies 38.8B - 2019, investment 2019, Global deals peak in 2018, decline in 1H-2019

Global VC, PE, and MA deal landscape in Fintech companies January 01, 2014 – June 30, 2019 Currency in US$, unless specified After a smashing 2018, which witnessed a 1,712 1,634 record number of mega deals ($100M+) 1,491 1,503 and super-size deals ($1B+), investment activity (PE, VC, and M&A) in the global 1,376 1,206 Fintech landscape for 1H-2019 declined, but remains higher than 2017 in terms of the aggregate deal value. 1H-2019 registered the lowest number of deals 141.0 since 2014, yet median deal values continue to surge, indicating a fairly strong 96.8 688 39 undercurrent for consolidation and maturity 76.2 71.1 57.4 in certain key segments 38.8

2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Fintech 603 across $11.1B globallyclocked in 1H In Fintech companies - deals 2019, VC Funding 2019, Consistent drop in deal volume; deal sizes continue to grow

Global VC funding in Fintech companies January 01, 2014 – June 30, 2019 Currency in US$, unless specified Considering the last five quarters, the 379 396 338 356 347 296 306 307 334 333 306 332 330 335 311 321 number of VC-backed funding deals 272 256 264 293 282 236 declined for the fourth time in 2Q-2019 to 14 8.9 8.5 6.2 4.7 4.4 4.5 5.2 6.3 5.9 5.0 6.1 282 deals; a fall of 29% from the peak 2.2 2.2 1.6 3.3 2.8 3.0 3.2 3.2 4.4 5.0 6.7 value in Q1-2018. On the other hand, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 median deal size trends continued to rise, 2014 2015 2016 2017 2018 2019 reaching $5.0M in 2Q-2019, more than

Capital Invested ($B) Ant Financial Deal Count doubling from $2.2M just ten quarters ago. Discounting the super-mega Ant Financial 4.8 4.9 4.7 5.0 deal, if the funding activity in terms of the 3.9 3.2 3.5 overall deal value in 1H-2019 holds for the 2.5 2.5 3.0 2.0 2.2 2.0 2.2 1.9 2.2 2.0 2.2 2.1 1.5 1.8 1.3 second half of the year, it is likely to be another robust year for Fintech globally.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2018 2019

Median Deal Size ($M)

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach Steep drop in early stage; deal activity resilient in late-stage VC

Global VC funding in Fintech companies January 01, 2014 – June 30, 2019 Currency in US$, unless specified Decline in the angel/seed and early stage Angel/Seed Early Stage VC Later Stage VC VC funding in the 1H-2019 was too steep to be considered a part of the usual volatility in deal activity. Early-stage 10.3 3.6 26.0 1.6 0.5 funding activity in Fintech in 2Q-2019 has 1.3 7.7 8.2 7.1 1.0 1.2 0.8 5.6 12.6 11.7 been the lowest in the last eight quarters, 3.6 9.7 0.5 3.2 5.3 7.1 in terms of overall funding and the number 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* of deals. Late-stage deal activity continues to remain strong as the number of mega 576 581 577 648 246 269 268 542 512 deals (>$100M) reached 26 in 1H-2019 503 504 477 482 203 426 194 alone, compared with 36 in entire 2018. In 366 159 fact, if this trend sustains, ignoring the Ant Financial deal outlier, 2019 is likely to be 134 256 the best year for late-stage VC funding in 213 Fintech. These two trends arguably 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* indicate early signs of maturity. We believe Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019 a huge untapped market potentially still exists in Asia, particularly in India. Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Median deal sizes continue to grow

Global VC funding median deal size by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified

20.5 20.0 19.0

13.6 13.8 13.1

7.4 5.9 4.0 4.2 4.5 4.5 1.5 1.5 0.6 1.0 1.0 1.3

2014 2015 2016 2017 2018 2019

Angel/Seed Later Stage VC Early Stage VC

Top 10 VC funding deals in Fintech, Global January 01, 2019 - June 30, 2019

Deal Post Money Valuation S.no Region Name Verticals Key Investors Size ($M) ($ B)

1 US SoFi Lending 500 Manhattan Venture Partners, Next Ventures 4.80 Government of Singapore Investment Corporation, 2 Germany N26 Payments 300 3.50 Insight Partners 3 US Affirm Lending 300 Baillie Gifford, Fidelity Management & Research 3.00 4 US Lemonade Insurance 300 OurCrowd, Annox Capital 2.10 5 US Carta Financial Markets 300 Alumni Ventures Group, Andreessen Horowitz 1.70 6 US Marqeta Payments 260 Coatue Management, Geodesic Capital 1.89 7 UK Checkout.com Payments 230 Blossom Capital, DST Global 2.00 8 US Chime Bank Payments 200 Coatue Management, Dragoneer Investment Group 1.30 9 Brazil Creditas Lending 200 SoftBank Group, Amadeus Capital Partners 0.73 10 US Divvy Business Solutions 200 New Enterprise Associates, Insight Partners 0.80

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach VC Funding: Europe completes strongest half year; numbers plummet in Asia

Global VC funding (# of deals) in Fintech companies January 01, 2014 – June 30, 2019 Currency in US$, unless specified Fintech VC funding in Europe is likely to Americas Asia Europe see the best year based on the robust deal activity in 1H-2019. 1H-2019 witnessed 6.8 3.0 seven mega deals ($100 M+), the same as 14 13.7 those in the entire year in 2018. While 9.6 1.2 8.1 7.7 3.8 3.5 6.1 6.8 10.5 3.0 growth is seen across all stages, late- 7.2 1.2 2.4 1.4 6.8 6.1 1.6 1.7 stage VC funding in European Fintech 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* companies in the first six months of 2019 has already surpassed the entire amount 215 238 831 212 201 413 760 363 recorded in 2018, with the median deal 675 685 624 320 616 294 287 size reaching its highest peak. Fintech deal 252 114 activity in 1H-2019 in North America continues to remain strong, with an 104 380 160 increase in late stage and a corresponding 52 decrease in early stage. Turmoil in China’s 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* P2P lending space dragged down the Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019 Ant Financial ($B) overall Fintech funding in Asia to its lowest since 2015. Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation In 1H-2019, VC Funding in Fintech companies in North America clocked $6.5B across

Fintech 369 deals North America continues to witness surge in VC funding

VC funding in Fintech companies in North America January 01, 2014 – June 30, 2019 Currency in US$, unless specified After a staggering 75% increase in overall 796 funding in 2018, investors continue to be 738 bullish on North American Fintech start- 660 664 ups in 1H-2019. Driven by a record 608 597 6 number of mega deals in Lending and Payments, two of the biggest segments, overall funding reached $6.5 billion in 1H- 13.1 2019, marginally lower than $6.8 billion recorded in the corresponding period in the 9.6 369 blockbuster year of 2018. 7.9 7.5 6.1 6.5

2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Projected 2019 Deal Count

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Surge in late-stage funding continues; decline in early-stage numbers witnessed

North America VC funding (# of deals) in Fintech companies by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified Angel/Seed Early Stage VC Later Stage VC

4.2 5.5 1.9 1.0 0.3 6.3 6.6 0.6 0.7 3.1 0.5 0.6 2.6 2.6 4.1 4.2 4.3 4.2 0.3 1.4 1.9

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

305 320 295 322 304 334 280 154 280 140 242 127 221 114 119 115 189 202

152 140 77

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

North America VC funding median deal size by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified

21.0 20.0

16.5 16.5 15.0 14.0

9.0 7.0 6.0 6.0 5.3 3.5 1.5 1.6 1.5 0.8 1.3 1.1

2014 2015 2016 2017 2018 2019

Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in Fintech, North America January 01, 2019 - June 30, 2019

Deal Post Money Valuation S.no Region Name Verticals Key Investors Size ($M) ($ B)

1 US SoFi Lending 500 Manhattan Venture Partners, Next Ventures 4.80 2 US Affirm Lending 300 Baillie Gifford, Fidelity Management & Research 3.00 3 US Lemonade Insurance 300 OurCrowd, Annox Capital 2.10 4 US Carta Financial Markets 300 Alumni Ventures Group, Andreessen Horowitz 1.70 5 US Marqeta Payments 260 Coatue Management, Geodesic Capital 1.89 6 US Chime Bank Payments 200 Coatue Management, Dragoneer Investment Group 1.30 7 US Divvy Business Solutions 200 New Enterprise Associates, Insight Partners 0.80 8 US Acoms Financial Markets 180 BlackRock, Comcast Ventures 0.87 Branch 9 US Lending 170 B Capital Group, Foundation Capital 0.27 International 10 US Stripe Payments 140 DST Global, Proioxis Ventures 22.5

North America VC funding, Fintech - Lending and Payments January 01, 2014 – June 30, 2019 Currency in US$, unless specified Lending While the total number of deals in Lending 125 116 did not increase drastically, a steep fall has 106 110 99 97 been witnessed in the Early Stage, with a 1.7 corresponding increase in the Late Stage.

3.4 Furthermore, the size of the mega rounds 2.2 2.2 58 keeps growing as the top four deals 1.8 1.7 1.4 contributed $1.10 billion of the $1.66 billion funding in 1H-2019. A similar trend can be 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* observed in VC funding in Payments, Payments 122 122 113 111 wherein six mega deals contributed $0.90 102 130 billion of the $1.45 billion received from 65 1.4 deals. Investors continued to be bullish on North American Fintech start-ups in 1H- 65 2.0 2019. 1.3 1.3 1.4 1.2 0.9

2014 2015 2016 2017 2018 2019 * 2014 2015 2016 2017 2018 2019 * Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Surge in Regtech VC funding: 2019 slated to be best year

North America VC funding, Fintech – Regtech January 01, 2014 – June 30, 2019 Currency in US$, unless specified

0.2

0.2 0.2 0.2 0.2 0.1 0.1

2014 2015 2016 2017 2018 2019*

25 25 22 16 18

2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Significant slowdown witnessed in funding in Insurance Tech and Business Solutions

North America VC funding, Fintech – Insurance and Business Solutions January 01, 2014 – June 30, 2019 Currency in US$, unless specified Insurance Business Solutions

1.8 0.6 2.0 2.0 0.7 1.1 1.2 1.2 1.2 0.7 0.7 0.6 0.7 0.3 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

74 69 102 107 106 92 92 58 86 55 52

28 26 53

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation In 1H-2019, VC Funding in Fintech companies in Europe clocked $3.0B across

Fintech 160 deals Fintech funding in Europe to reach record high in 2019

VC funding in Fintech companies in Europe January 01, 2014 – June 30, 2019 Currency in US$, unless specified Europe is witnessing staggering growth in VC funding in Fintech, and 2019 may as 413 363 well be a blockbuster year based on robust 1H deal activity. While seven mega deals 294 320 ($100M+) were registered in the first six 287 252 3.0 months, compared with the same number recorded in the entire year in 2018, growth is much more broad based, encompassing all Fintech verticals and funding stages. Median deal sizes have grown four times 160 3.8 3.5 since 2014, to around $4 million in 1H- 3.0 2.4 2019. 1.6 1.7

2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Projected 2H19 Deal Count

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Late-stage funding witnessed explosive growth in 1H-2019

Europe VC funding (# of deals) in Fintech companies by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified Angel/Seed Early Stage VC Later Stage VC

1.9 1.0

0.4 1.7 0.3 0.1 1.3 2.2 0.2 1.1 1.0 1.6 1.9 0.2 0.7 0.8 1.2 0.1 0.1 0.8 0.5 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

169 72 157 195 143 61 58 124 159 152 133 96 96 121 101 35 27 30 36 76 48

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Median deal sizes in late-stage companies peak at record levels

Europe VC funding median deal size by funding stage January 01, 2014 – June 30, 2019

19.0

15.7

11.5 11.4

9.1 9.0

4.9 4.8

2.5 2.5 2.2 2.6 1.4 1.2 1.2 0.5 0.7 0.8

2014 2015 2016 2017 2018 2019

Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in Fintech, Europe January 01, 2019 - June 30, 2019

Deal Post Money Valuation S.no Region Name Verticals Key Investors Size ($M) ($ B) Government of Singapore Investment Corporation, 1 Germany N26 Payments 300 3.50 Insight Partners 2 U.K. Checkout.com Payments 230 Blossom Capital, DST Global 2.00 3 U.K. Iwoca Lending 196 Augmentum (London), Intesa Sanpaolo 0.10 4 Sweden Lendify Lending 160 Insight Investment, Anders Borg 0.09 5 U.K. Monzo Personal Finance 147 Latitude, Y Combinator 2.33 6 Germany Wefox Insurance 125 CreditEase, Mubadala Investment Company - Goldman Sachs Principal Strategic Investments, 7 Germany Raisin Lending 117 0.78 Orange Digital Ventures 8 U.K. Starling Bank Payments 98 Merian Chrysalis Investment, Merian Global Investors 0.17 9 France PayFit Business Solutions 82 Bpifrance, Eurazeo - 10 U.K. GoCardless Payments 76 National Grid Partners, Adams Street Partners -

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach Lending, Insurance, and Business Solutions deals grow in value, but shrink in volume

Europe VC funding, Fintech – Lending, Insurance and Business Solutions January 01, 2014 – June 30, 2019 Currency in US$, unless specified Business Solutions Insurance Lending

0.4 0.7 0.3 1.4 1.0 0.4 0.5 0.7 0.3 0.3 0.4 0.4 0.2 0.0 0.0 0.5 0.5 0.1 0.1 0.1 0.3 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

47 46 44 66 75 65 37 38 61 36 34 28 46 34 40 20 16 11 19 17 20

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Better funding activity in Payments and Financial Markets in 1H-2019 after slump in 2018

Europe VC funding, Fintech – Financial Markets and Payments January 01, 2014 – June 30, 2019 Currency in US$, unless specified Financial Markets Payments

0.9 0.3

0.3 0.3 1.2 0.3 0.8 0.9 0.9 0.2 0.2 0.6 0.2 0.4

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

65 60 69 75 68 59 64 66 50 51 38 37 30

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation In 1H-2019, VC Funding in Fintech companies in Asia clocked $1.2B across

Fintech 52 deals VC funding deal activity drops to lowest level since 2014

VC funding in Fintech companies in Asia January 01, 2014 – June 30, 2019 Currency in US$, unless specified 237 Sharp decline in funding in Asian Fintech companies was witnessed in 1H-2019 in 212 215 201 the key markets of China and India as the number of deals plummeted. Turmoil in China’s P2P lending vertical amid tightening regulatory norms hit funding activity across early-stage and late-stage 114 14.0 segments. After a record number of deals 104 in 2018, India witnessed a plunge in the number of Fintech deals. The only silver 52 lining was continued growth in median deal 10.5 sizes. It would be interesting to see 6.8 7.2 6.1 1.2 whether deal activity rebounds in the 1.4 1.2 coming quarters. 2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019 Ant Financial ($B)

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Deal activity declines across stages, but most in early stage

Asia VC funding (# of deals) in Fintech companies by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified Angel Seeds Early Stage VC Later Stage VC

0.3 14.0 3.7 4.0 0.2 0.2 0.2 0.1 2.4 0.1 1.7 0.5 6.7 0.6 0.1 1.0 0.3 4.8 3.1 3.3 0.5 0.6 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

87 121 54 74 100 99 44 63 89 38 39 58 46 28 55 60 13 16 14 8 30

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019 Ant Financial ($B)

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach and 2019* calculation Median deal sizes witness sharp decline from peak in 2018

Asia VC funding median deal size by funding stage January 01, 2014 – June 30, 2019 Currency in US$, unless specified 37.7

30.8 27.8

20.8

15.0

10.0 10.0 7.3 5.0 5.6 5.5

1.0 1.5 0.7 1.0 1.0 2.8

2014 2015 2016 2017 2018 2019

Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in Fintech, Asia January 01, 2019 - June 30, 2019

Deal Post Money Valuation S.no Region Name Verticals Key Investors Size ($M) ($ B) Warburg Pincus, Goldman Sachs Merchant Banking 1 China Momo (Application Software) Payments 100 - Division Shanghai Dianrong Financial 2 China Lending 100 Affirma Capital, Dalian Finance Industry Investment Group - Information Services 3 Indonesia Akulaku Business Solutions 100 Ant Financial, Blue Sky Alternative Investments 0.45 4 China Wiseco Technology Lending 95 China Growth Capital, Green Pine Capital Partners - 5 India InCred Finance Lending 83 - - 6 Singapore GoBear Lending 80 Aegon, Walvis Group - 7 China Shuidichou Lending 74 Yuri Milner, Dianping.com - 8 India Acko General Insurance Insurance 65 Intact Ventures, RPS Ventures 0.30 9 China BangSun Technology RegTech 51 VT Ventures, Xinhu Zhongbao Company - 10 China Lupu Investment Financial Markets 45 Duane Kuang -

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the Fintech universe and its constituents as defined from perspective of this report as well as data analysis approach All major verticals witness steep decline in funding

Asia VC funding, Fintech – Diverse Verticals January 01, 2014 – June 30, 2019 Currency in US$, unless specified Business Solutions Payments Lending

5.1 2.6 3.4 1.7 2.1 2.5 0.1 1.3 0.2 1.8 0.1 2.0 1.2 0.4 0.1 0.3 0.2 0.8 1.0 0.6 0.4 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019*

23 52 20 20 78 40 40 66 69 59 14 14 33 25 34 8 30 16 7 8 15

2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* 2014 2015 2016 2017 2018 2019* Capital Invested ($B) Projected 2H19 Deal Count ($M) Projected 2019

The underlying deal data used in the report was sourced from Pitchbook. Only transactions with a ‘Completed’ status were considered. Fintech Data Selection Criteria All transactions that were classified under the “Fintech” vertical by Pitchbook were selected. In addition, we also considered transactions based on search results that included keys words such as Fintech, financial technology; finance technology, financial service technology, etc. We also specifically reviewed the details such as original classification, business description, nature of deal, deal value for all transactions with deal value greater than or equal to $1 billion using publicly available articles and/or company website. This was then used to make the reasonable judgment for their inclusion or otherwise within the broader Fintech universe as well as the within different verticals/segments therein.

Categorization of Deal Type For the purposes this report, our focus on Fintech deals is primarily three deal types as per Pitchbook classification: venture capital (VC), private equity (PE), and mergers and acquisitions (M&As). All others deal types classifications including but not limited to “accelerator/incubator, secondary transaction, debt financed, publicly listed, joint venture (JV), and others” are not included in the analysis of this report. Venture Capital For the purpose of this report, we observed the Deal Type and Deal Universe reported by Pitchbook for each deal. Based on Aranca’s analysis the deals tagged as “early stage VC, late stage VC, angel (individual), restart-angel, seed round and Corporate” were classified as VC deals.

Venture Capital Stages Angel/seed deals include deals tagged by Pitchbook as angel (individual) and seed round. Early-stage deals include deals tagged by Pitchbook as early stage, which mostly include Series A and Series B companies. VC corporate deals with size less than $5 million that did not contain any specific tag for early or late stage (about 1% of total VC deals) within Pitchbook data were categorized as “early stage”. Late-stage deals include deals tagged by Pitchbook as “late stage”, which typically represent Series C (and above) transactions. Furthermore, in absence of specific classification, VC Corporate deals with size greater than or equal to $5 million (about 1% of total VC deals) were categorized as “late stage”. In the report, Accelerator/Incubator is not a part of the VC universe. Methodology (continued)

Categorization of Industry Segments All Fintech deals have been classified under nine segments, namely, payments, lending, insurance, financial markets (wealth management and capital markets), personal finance, business solutions, RegTech, real estate/mortgage, and Blockchain/crypto. The companies have been classified based on the business description provided by Pitchbook or the company website. 1. Payments: Companies that provide money transfer and payment solutions, point-of-sale (PoS) systems, wallets, credit cards, etc. 2. Lending: Companies that provide loans or a marketplace for lending, working capital and any other type of business financing, crowdfunding, peer-to-peer (P2P) lending, etc. 3. Insurance: Companies that provide insurance or provide technology/marketplace for all types of insurance products, insurance-enabling solutions, etc. 4. Financial Markets (Wealth Management and Capital Markets): Companies that provide portfolio management and advisory services, financial data and analytics, trading or brokerage firms, investment management firms, etc. 5. Personal Finance: Companies that provide budget management apps, expense trackers, financial literacy apps, etc. 6. Business Solutions: Companies that provide business-process-enabling systems or technology such as accounting, payroll systems, and companies that do not fall under any of the above categories 7. RegTech: Companies that provide solutions for risk management, regulatory compliance, assistance in audit, etc. 8. Real Estate/Mortgage: Companies that provide real estate advisory, rent payment solutions, any mortgage-related tech, etc. 9. Blockchain/Crypto: Companies offer Cryptocurrency/Blockchain related services or technology

2019 Full year calculation The full year 2019 data provided in the charts is arrived at by annualizing 1H 2019 data and are not informed estimates. It is to facilitate better comparability with prior years. Accordingly, the "dotted line" indicates 2019 full year annualized number of deals based on 1H 2019 actual data. The "shaded column area" indicates 2H 2019 capital invested based on 1H 2019 actual data. 500+ 2500+ 120+ 80+ strong team professional team global Clients sectors and sub-sectors countries where we have delivered across multi-disciplinary domains researched by our analysts projects

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Bharat Ramnani, ACA Ashish Rane Head of Valuations & Financial Advisory Senior Manager, Valuations and Financial Advisory Email: [email protected] Email: [email protected] Ph: +91 22 3937 9999 Ext. 259 Ph: +91 22 3937 9999 Ext. 390 LinkedIn Profile LinkedIn Profile

Bharat’s Client Service delivery experience of over 15 years Ashish has over 9 years of experience in Corporate Finance, includes advising global clients across diverse strategic and Transaction Advisory and Business Valuation and has transaction advisory engagements, corporate finance and managed financial advisory engagements for over 300 business valuation situations. He has been instrumental in Venture Capital firms focused on investments within the building Aranca’s financial advisory services group, which Technology domain. caters to wide spectrum of clientele including large corporate, Ashish holds an MBA from New York’s Stern School of private equity & venture capital, family offices as well as Business and a Baccalaureate degree in Business and hundreds of high performing start-ups. Management Information Systems from Pennsylvania State Disclaimer Bharat is a Chartered Accountant and holds an expert University. This document is for informational use only and may be designation in business valuation from American Society of outdated and/or no longer applicable. Nothing in this Appraisers. publication is intended to constitute legal, tax, or investment advice. There is no guarantee that any claims made will come to pass. The information contained herein has been For additional details, please visit: obtained from sources believed to be reliable, but Aranca does not warrant the accuracy of the information. Consult a https://www.aranca.com/ financial, tax or legal professional for specific information https://www.linkedin.com/company/aranca related to your own situation.