Innovalue #Payments

Innovalue #payments

INSIGHT | OPINION

Vol 6 • Q1 2014 Host Card Emulation: The wings of NFC payments

Mirko Krauel, Both approaches are currently not have to be commercially orchestrated, and Principal broadly successful in the market due to a (4) the different players “fight” for the custom- number of reasons. The following article will er ownership. Erik Heimbächer, focus on mobile payment solutions based on The above-mentioned challenges are Associate traditional schemes and will describe how especially true between Mobile Network HCE could revitalize this strategic approach. Operators (MNOs) and issuers since MNOs are gate keepers with reference to the SIM. Issuers The non-breakthrough of Mobile Payments who intend on getting a payment card into For a rather long time already, companies with Bone of contention: the secure element the mobile phone have to arrange coopera- diverse industry backgrounds have worked on Mobile payment solutions based on tradition- tion with multiple telecommunication enabling mobile payments using smartphones al payment schemes are currently storing sen- providers. For granting access to the SIM, at the point of sale (POS). In this context, two sitive payment data on a tamper resistant lo- often MNOs expect e.g. revenue shares or blue-print strategies can be observed in the cation, broadly known as the secure element. customer access. market: (1) the set-up of proprietary, self-con- Different types of secure elements are possi- tained mobile payment ecosystems, and (2) ble (e.g. smartphone embedded, microSD "HCE has the potential to the set-up of mobile payment solutions based card, SIM card), but in fact the secure ele- unlock innovation in the NFC on traditional schemes. Companies following ment is in most cases located on a mobile’s space around payment and the proprietary approach try to build their own SIM card. Traditionally, a SIM-based secure el- ecosystem around mobile payment and com- ement strategy comes with the need to coor- non-payment services" merce services with e.g. a new acceptance dinate a comparatively high number of play- brand. On the other hand, mobile payment ers. That fact leads to a multitude of Game changer: Host Card Emulation solutions based on traditional schemes try to le- challenges: (1) since every player wants to A solution to solve especially the gate keeper verage the established payment ecosystem have a slice of the transaction pie, profitable issue around the SIM-based secure element is with its growing NFC acceptance infrastructure business models are difficult to develop, (2) Host Card Emulation (HCE), which gained by trying to integrate virtual credit or debit the technical solutions are complex and cost broad attention with the emergence of An- cards (e.g. Visa, MasterCard) into the mobile. intensive, (3) the large number of players droid KitKat in October 2013. Currently

TABLE OF CONTENTS

Host Card Emulation: The wings of NFC payments Public market valuations and the market environment Due to a number of reasons, mobile NFC payment solutions are currently not broadly Public companies in the payments universe have continued to trade up over the successful. Mirko Krauel and Erik Heimbächer will show why Host Card Emulation past 12 months. Markus Massem takes a closer look at valuation drivers and could re-vitalize the market p1 benchmarks the different groups within the payments universe p6

Innovations for the financial industry – FinovateEurope 2014 Recap M&A Activity How do innovators plan to shape the future of Europe’s financial industry? Verena What are the key drivers of M&A activity? Which transactions made headlines in Hinrichs recaps her visit to FinovateEurope 2014 providing an overview of show- the 1st Quarter of 2014? What are recent takeover rationales? Andreas Haber- cased solutions and innovation trends p3 setzer and Robert Kayser answer these questions p7

VC Activity Once again the Innovalue team reviews the latest payment startup funding activity (Q1 2014). What are current product or service innovations for investors, and what are the global investment trends within the payment ecosystem? p4 Innovalue #payments Insight|Opinion 2

However, the remaining key factor is Since the SIM is no longer a control point, Secure element based Host card based where the payment data that an app sends e.g. merchants and issuers, to name only a to the NFC reader actually comes from. Cur- few, are able to launch their own payment Host CPU Host CPU rently, the most promising solution is a services or could enhance existing coupon- combination of cloud-based storage and ing or loyalty solutions with payment tokenization of sensitive payment data, as functionalities. As we believe HCE to be a

UICC/SIM card Secure Element proposed by Visa and MasterCard earlier this potential game changer, there are implica- year. tions for the players of the ecosystem. Based By potentially making mobile NFC payment on our expertise of the market, we have sum-

NFC controller NFC controller solutions independent from the SIM, HCE may marized potential impacts of HCE on key simplify the ecosystem: time consuming players of the mobile payment and com- negotiations with telecommunication provid- merce ecosystem (Table 1). ers about e.g. revenue shares or SIM rental In our view, HCE will lead to a significant models as well as a costly Trusted Service increase of the number of NFC mobile pay- NFC terminal NFC terminal Manager integration are now a thing of the ment apps / wallets in the market. However,

Figure 1: Secure element based card emulation vs. HCE past. Hence, HCE may well put an end to the as consumers will select payment services long battle between mobile payment provid- providing the broadest acceptance at POS, - 1 - © Innovalue 2014ers, I STRICTLY TSMs, CONFIDENTIAL handset manufacturers, issuers and the highest value and the best user experi- available on mobile phones running Android telecommunication providers with reference ence, only a few solutions are expected to 4.4 and on some BlackBerry devices, we are to cooperation models. Now, the fight shifts to survive as time proceeds. convinced that other OS providers and/ or developing the best product and to gain In order to benefit from the current hardware manufacturers such as Microsoft market shares as quickly as possible. momentum, all players of the ecosystem with its Windows Phone will soon also provide have to understand the implications of HCE HCE functionality. on their current strategy, business models as HCE allows any Android NFC device to be Future-proof: HCE to boost mobile payments well as product offering and have to adapt used for mobile payment and other secure We believe that HCE has the potential to where necessary. The ones who do, will fly on applications without needing access to the unlock innovation in the NFC space around the wings of HCE, the ones who don’t, will SIM. When an NFC card is emulated using payment and non-payment services. Backed most likely be pushed out of the market. HCE, the data is routed to the host CPU on by the support of the payment schemes and Innovalue has prepared an analysis on which Android applications are running the chance to simplify the ecosystem, the HCE and its strategic implications. If you are directly, instead of routing the data to the SIM number of NFC mobile payment services interested in the results please contact Mirko (Figure 1). It is important to note, that HCE just using HCE is already growing rapidly. Besides Krauel [email protected] makes sure that the data is safely transmitted Google Wallet, e.g. Spain's Bankinter, Atos to the NFC controller and out to the NFC Worldline, Carta Worldwide have announced reader. Meanwhile, sensitive data can be their support for HCE in different ways. Even stored at a wide range of locations, e.g. on the US carrier venture ISIS is considering the host itself or within the cloud. migrating to a HCE-based wallet over time.

Player Advantages Challenges Schemes • HCE may lead to a break-through of mobile POS payments; this may potentially • Reputation could decrease since HCE-based se- further increase the business of the schemes curity models are potentially weaker in • Possibly strengthen market position by e.g. covering role of a token service comparison to the SE-based security model provider

MNOs • Since SIM card/TSM model is not further required, cost of providing a mobile • Loss of gate-keeper position as SE provider and payment service decreases also for MNOs thus potentially loss of SIM rental fees • Dual strategy possible (HCE and SIM/TSM) • Other payment and commerce provider may “win the mobile payment race”; strategic re-scoping may be necessary

Issuers • Independently develop own payment application • Reputation could decrease since HCE-based se- • Since SIM card/TSM model is not further required, cost of providing a mobile curity models are potentially weaker than the SE- payment service potentially decreases based security model • Issuers will keep full customer ownership • Data security has not been discussed fully yet

Merchants • Independently develop own payment application together with an issuer • Own proprietary single-merchant focused apps • HCE makes NFC a "safer bet“(for payments only!) compared to QR etc. will lose their relevance

Attackers/new • Any provider can launch an Android app that could perform a card • Potentially increased competition between at- players emulation transaction tackers/new players and banks/issuers • Non-secure NFC services (e.g. couponing) can quickly migrate to HCE

Table 1: Advantages and challenges of HCE for selected players

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Innovations for the financial industry – FinovateEurope 2014 Recap

Verena Hinrichs, Senior Associate

This year’s FinovateEurope has been one of the event highlights in the first quarter of 2014. We spent two intense days in London’s financial district at the Old Billingsgate Market Hall watching companies showcasing their new- est financial technology innovations. The de- mo-only format allowed more than 60 companies to present their product for a maximum of 7 minutes on stage to the audience. The lineup of showcasing companies fea- tured leading established industry specialists as well as young startups. These companies originating from 27 different countries in technology trends and applied them to their and features some promising approaches to Europe and beyond demoed innovations financial products and solutions. modernize the industry. We particularly see a ranging from already launched productive positive aspect in the fact that a lot of those solutions to beta versions. As in other Finovate Underlying trends to be observed were: solutions are made for the European market, shows, some were better presenters than compliant with existing laws and regulations others, but what they all had in common was • Big Data Analytics, e.g. to provide a Siri- and now at the verge of implementation. their focus on providing solutions tailored to style intelligent research assistant to perform the European market. sophisticated quantitative analyses (Kensho / "Looking for a common Warren) denominator of the demoed This year’s innovations were directed • Artificial Intelligence (AI), e.g. to help solutions, we were not towards the following areas: bank’s sales teams spend more time on cus- surprised to find that most of tomer interactions and less time on adminis- the innovators took existing • Fraud Prevention, Security and trative tasks (Yseop) ID Verification • Gamification, e.g. to increase fun and per- technology trends and (e.g. Arxan, BehavioSec, DeviceIdent, Encap sonal engagement in handling one’s person- applied them to their financial Security, Feedzai, SecureSafe, Trustev) al finances (Toshl Finance) products and solutions" • Personal Financial Management • Seamless integration, e.g. to enable bank As white-label product for banks (e.g. Meni- customers to experience a consistent e-bank- However, we did not witness the demon- ga, IND Group/MYSIS, TheMoneyer, softwear) ing flow across channels and devices stration of any truly revolutionary solutions. or as account aggregator with direct con- (ETRONIKA) Europe’s financial industry is certainly not at sumer relationships (e.g. SQLI, Tink, Toshl Fi- • Democratization of services, e.g. to give the forefront of setting new mega trends but is nance, YourWealth) people access to a low-cost international keeping itself busy in the process of bringing • Merchant/Consumer Lending money transfer platform (CurrencyTransfer, the ever widening gap between its own stan- (e.g. Advanced Merchant Payments, EZBOB, CurrencyCloud) dards and the pulse of time to a halt. New Nostrum Group) • Behavioral biometrics, e.g. to reduce risk market entrants, increasing importance of • Bank and Payment Process Digitalization and fraud costs and provide an alternative consumer demands, and availability of new (e.g. Backbase, ETRONIKA, Fice Degrees, for the use of passwords as authentication technologies exhibit an environment with lots GMC, Jack, NF Innova, PhotoPay, Temenos) method (BehavioSec) of room for innovations. We therefore particu- • Stock Market Intelligence • Social data, e.g. to help traditionally under- larly expect the interest of established players (e.g. Kensho, Luxoft, nous.net, Money on banked borrowers connect with potential in the field to increase further. This will likely Toast, EXCESS RETURN) lenders by including social data in credit scor- prove itself true at next year’s FinovateEurope, ing processes (Plutus Software / Kredit Aja) which we will surely be part of again. Looking for a common denominator of the demoed solutions, we were not surprised to From the above we conclude that the Euro- find that most of the innovators took existing pean FinTech innovation landscape is vital

Page1 Innovalue #payments Insight|Opinion 4 VC Activity

Niels Denefleh, Europe-based startups took back their second Senior Associate place attracting 24 funding rounds and constituting approx. 26% of the worldwide Moritz Cremer, total equity funding volume. Associate Nigeria-based i.Sec is the only African startup that managed to attract VC funds in Joris Wetzel, Q1 and therefore is able to use its USD 10m Associate funding to proceed with the further development of its financial security technology. The same applies to Sidney-based P2P lending Funding Activity platform SocietyOne. With a Series A funding Funding activity in the first quarter of 2014 has of USD 8.5m P2P lending platform SocietyOne been the most active ever covered by this is the only Australian startup that could attract newsletter. A total of 93 funding rounds and a an investor in the first quarter of 2014. The largest funding in Q1 was announced Funding Activity by Region Funding Activity by Segment by Borro, a UK-based online pawn shop that 93 funding rounds 93 funding rounds lets people borrow cash and put up personal 3% assets as collateral. Victory Park Capital 3% invested USD 112m in private equity into the 20% 17% 2008 founded startup. In total Borro has 15% received over USD 150m and will use the latest financial injection to grow out itsbusiness in the markets9% where it is active (UK15% & USA) 25% and specifically to expand the pool of money available to offer customers for financing. 54% The second9% largest funding in Q1 was announced by US-based online15% credit score provider and credit15% marketplace Credit Karma. The USD 85m Series C financing round North America was led byFinancial Google Services Capital with participation Europe from TigerFinancial Global Management, Marketplace Ribbit Capi- funds for equity and debt capital from Asia tal and MobileSusquehanna Payment Growth / mCommerce Equity. This peer-to-peer, business-to-consumer or con- Africa funding roundOnline bringsPayments Credit Karma’s total sumer-to-business. These market places offer Australia funding upPOS to /USD mPOS 118.5m. Credit Karma pro- faster, simpler and often considerably less vides usersVirtual with / freeCrypto access Currency to their credit expensive ways of funding than traditional total (disclosed) volume of USD 1,250m in eq- scores andOthers allows free monitoring of their sources (e.g. Banks) and further create a uity and USD 25m in debt financing were re- credit and financial accounts while relying on possibility for non-institutional investors to corded. Funding volume per round was on advertising for revenue. The rationale for the invest in early-stage business that operate in average USD 14.48m – a tremendous increase large funding can be seen in Credit Karma’s high-growth markets. of approximately 114% compared to the pre- promising plans to further monetize their user This quarter, another significant funding in vious quarter. base by partnering banks and thereby offer the financial marketplaces segment, besides As in all past issues of this newsletter the consumers an integrated solution to manage already mentioned UK-based online pawn- North American – mainly US-based – startups their debts. shop “borro”, was received by US-based small account for the biggest share of collected business lending platform OnDeck amounting venture capital, more precisely 57% of the Investment Trends to USD 77m (Series E), led by Tiger Global worldwide total equity funding volume. The first noticeable trend with as much as Management and including notable inves- Regarding the following ranks, compared to 14 funding rounds and a total disclosed tors like Google Ventures and SAP Ventures. the last quarter a backshift took place. As funding volume of USD 325m builds around OnDeck uses a self-developed credit scoring Asian-based startups were second placed in financial market places for consumers and framework that is derived from online banking Q4 2013, they gave up their runners up businesses. Financial market places are and merchant processing data to provide an position showing 14 funding rounds and characterized as a network of money flowing instant cash-flow-based scoring which is then accounting for approx. 13% of the worldwide from one party to another – in a sense that the used as a basis to offer loans to small total equity funding volume in Q1 2014. market place provider facilitates the flow of businesses.

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This appears to be a very robust trend, not to ride on the wave of Bitcoin and the This trend has stabilized despite the melt- only with regard to frequency and volume of corresponding ecosystem in the current down of the well-known Bitcoin exchange Mt. funding, but also considering that investments quarter – again with vivid activity in Asia, Gox and regulatory uncertainties in several have occurred simultaneously across multiple including GoCoin (Singapore), OKCoin countries (e.g. China) and is expected to regions (including North America, Europe, (China) and Korbit (Korea). Worth mentioning solidify further as the potential for crypto Asia andFunding Australia). Activity However, by Region the trend’s Funding Activity by Segment currencies in related business areas, like for momentum93 is fundingassumed rounds to slightly subside, 93 funding rounds example the trading of virtual contracts, is not since its peak supposedly lies within the yet foreseeable. current quarter. 3% Additional investment trends evolved 3% A second noticeable trend is formed by 20% 17% around traditional credit card use in conjunc- cloud-based15% financial management tools for tion with loyalty solutions; and hard and businesses. Basically their value proposition software-based user identification solutions. consists of offering automated online expense With two venture rounds for Birdback and 9% 15% and 25%invoice management as well as the Red Zebra Analytics, both UK-based and led synchronization of information with common by Passion Capital and SBT Venture Capital, accounting software solutions. Additionally we saw simultaneous funding for two very 54% 9% these cloud-based services often allow online similar solutions that allow linking coupons to a document storage and other value-added 15% card with an automated redemption when services. Besides that the charm of these SaaS 15% paying with the linked card. solutions (SaaS: software-as-a-service) is the Identity verification services saw three chance to reduceNorth America a business’ paperwork. The Financial Services funding rounds with a strong focus on North offer mainlyEurope addresses SMEs that cannot Financial Marketplace America – the US-based players NokNok Labs afford moreAsia sophisticated solutions like SAP or Mobile Payment / mCommerce and Virtrue, as well as Canadian Trulioo. While Oracle – anyhowAfrica often oversized and too Online Payments Trulioo and Virtrue are focused on improving inflexible. Australia POS / mPOS verification quality via social networks, Already in the last quarter, with the large Virtual / Crypto Currency NokNok Labs specializes in employing existing funding (USD 38m) of US-based payment and Others security capacities in a multifactor authen invoicing SaaS provider Bill.com, it has been tication (for device-signature chips and user observed that the area is gaining traction. In is also the significant USD 17m Series B funding tokens). total 5 related equity funding rounds were for the US-based stealth mode startup Circle, We expect to see an increased funding recorded in Q1, accounting for a total dis- that announced nothing less than the revo activity in identity verification services in the closed volume of more than USD 105m in lution of money handling with the help of future driven by regulatory and commercial equity funding. Bitcoin-based digital currency products, and initiatives to improve online security; whereas US-based company Coupa, developer of who gained the support of notable investors it remains to be seen if card-linked coupons cloud-based expense and contract manage like Accel Partners and Breyer Capital without will be able to take root as a transitional step ment software applications, accounts for the an existing user base or a launched product. towards integrated loyalty solutions. segment’s largest funding. They closed a USD 40m Series F round, led by Meritech Capital. The second largest funding was received by Intacct, a developer of cloud-based financial management and accounting applications. Intacct has raised USD 30m in equity funding in a Series G round led by Battery Ventures and USD 15m in debt funding by Silicon Valley Bank. It can be expected, that this trend will further continue as in general the market for cloud-based services is still in its early stages compared to the overall software application market today, and therefore also cloud- based financial management tools will continue attracting investors’ attention. A further trend that has remained from the previous quarter is the investment in virtual and crypto currency ventures, with 8 funding rounds and USD 55m total funding volume in this segment. Crypto currencies, with trading platforms and crypto-rivals, continued trying

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Public market valuations and the market environment

Markus Massem, Senior Associate

The public companies captured in our payments universe (see end of article for composi- tion) have continued to trade up significantly over the past 12 months, generally in line with the wider market yet outperforming the S&P 500. Most of the surge was realized in the second half of 2013, before the market started softening at the beginning of 2014. The downward trend then gained additional momentum from March 2014 onwards. The decline from all-time Table 1: Indexed stock price performance over the last 12 months till April 15th 2014 highs as indicated by major indices was partially driven by investors capturing their gains, uncertainties around the ongoing growth in emerging markets, anticipated monetary policy tightening and the issues surrounding the Ukraine. The PSP/Online payments peer group stood out from the wider universe due to a strong performance by Optimal Payments (LON:OPAY) which more than doubled, driven by strong growth and margin expansion, but has also seen a consistent downtrend since March.The broader IPO market had a robust start of 2014 but the strong momentum has seen some indications of slowing as investor appetite for new listings at ambitious valuations has come down given Table 2: Payments universe historical operational metrics as of April 15th 2014 some recent IPO pricings and post-IPO trading performance across the wider market. "Valuation multiples of the payments universe for the calendar In relation to operational performance, the year 2013 have seen expansion over the course of the last 12 companies of the payments universe have months as the increase in share price over that period out delivered a median revenue growth slightly in excess of 10% for the calendar year 2013, with performed corresponding 2013 revenue and EBITDA growth." premium growth being observed in the PSP/ Online payments segment. Visa (NYSE:V) and Mastercard (NYSE:MA) continue to stand out with superior EBITDA margins at around 60% as they maintain their strong market position. Overall, profitability margins have remained largely flat from calendar year 2012 to 2013.

The valuation multiples of the payments universe for the calendar year 2013 (EV/Reve- nue CY13 and EV/EBITDA CY13) have seen expansion over the course of the last 12 months as the increase in share prices over that period outperformed corresponding CY13 revenue and EBITDA growth. The Table 3: Payments universe historical trading multiples as of April 15th 2014

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PSP/Online payments peer group trades at Dot (NYSE:GDOT) on the other hand has gone Issuing/Prepaid solutions: a premium to the wider payments universe through a volatile period over the past twelve Green Dot, Wright Express given strong growth and ongoing margin ex- months, losing more than thirty percent since Processing: pansion. Visa (NYSE:V) and Mastercard late January 2014 as the company missed Cielo, Euronet Worldwide, FIS, Fiserv, Heart- (NYSE:MA) are given valuation credit for earnings expectations due to higher land Payment Systems, Total System Services their strong operational benchmarks and expenses. It remains to be seen how valua- PSP/Online payments: market position. tions of the payments universe will develop in Digital River, Optimal Payments, Wirecard An outlook remains difficult, given the these interesting times. Schemes: ongoing uncertainty and recent corrections American Express, Mastercard, Visa in valuations. Markets continue to give credit The payments universe (alphabetical order): to sound companies that meet or outperform Acceptance: Sources: Innovalue research and company expectations, as seen with Verifone (NYSE:PAY) Global Payments, Ingenico, PayPoint, filings; Google Finance for share price data gaining 10% in one day in mid-March. Green Vantiv, Verifone

M&A Activity

Andreas Habersetzer, Partner

Robert Kayser, Associate

M&A activity in the first quarter of 2014 further increased momentum following last year’s striking developments. A total of 40 transactions were reported with a total volume of USD 4.6 billion being disclosed. Dealmakers shaped a diverse set of transactions including global M&A and financings. Therefore, banks centered attention. Additionally, IPO activity seems to pick up as first candidates went public or revealed respective plans.

M&A activity and deal characteristics A total of 40 M&A transactions were review last year, the company decided to sell years but would not indicate any expected announced in the first quarter of 2014, which itself and collect fresh capital. A move that return on the investment. Followed at distance represents a 33 per cent increase over the 30 allows investments especially in the con is the acquisition of Payment Processing by deals announced in the same period of 2013. solidation of IT systems, and enables Nets to Global Payments for USD 420 million. It is one The financial terms of 13 transactions, with a face emerging challenges such as a shift in of the largest non-banking related trans total volume of USD 4.6 billion, were disclosed. transactions from credit and debit cards to actions. The acquisition is geared to further This quarter’s highlight is the sale of Nets, not online and mobile payments as well as expand Global Payments’s existing inte only in terms of size but also as a path of future increased scrutiny from regulators. Further- grated solutions business. The transaction also industry development. A consortium led by more, through the transaction, Nets can focus expands the direct distribution network, adds U.S. private equity firms Advent International on the Nordic market and look at expanding vertical markets and growth to Global Pay- and Bain Capital, along with Danish pension within the region. Nevertheless, the enormous ments and thus continues the consolidation in fund ATP, agreed to buy Denmark-based Nets price tag will require a comprehensive plan the US-processing industry. for USD 3.1 billion. Thereby it became the for value creation which might include the The maturity of assets acquired and largest disclosed transaction in the first quarter disposal of parts of the diversified business. The respective growth rates are reflected in of 2014 and one of the biggest we have new owners said they expect an exit through multiples paid. Analysis in the last issues recorded so far. As a result of a strategic an initial public offering (IPO) in five to seven revealed significant EBITDA valuation ranges,

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varying between 7x to 35x EBITDA. The acqui- of HiFX (UK) by Euronet Worldwide (USA) as Simple will continue to operate independently sition of Nets equates to a multiple of 12.9x well as Simple (USA) by BBVA (Spain) are further as a US-subsidiary of the BBVA holding. EBITDA or 2.5x revenue. Comparable lower examples. Particularly Euronet got active to Nonetheless, BBVA has expressed efforts to EBITDA and revenue multiples indicate a high expand its global customer base and take Simple to other geographies at a later degree of maturity of Nets but also in the strengthen its product and service offering in time. In summary, BBVA has been fortunate to processing industry in general. Euronet’s international online payments and foreign secure its stake in the future of banking. acquisition of HiFX for USD 242 million equates exchange services. On another example, the The disruption in the international money to a multiple of 13.4x EBITDA or 3.6x revenue. acquisition of Dutch Afterpay enables arvato transfer industry has been fortified. Recently Global Payments paid 4.2x Pay Pro’s revenue. financial solutions from Germany to offer we had a closer look at MoneyGram’s deal The enterprise / revenue multiple for BBVA’s customers finally the popular payment activities. It became apparent that money USD 117 million acquisition of Simple is approxi- method of open invoice with payment transfer is an area where traditional banks mately 11.7x. However, what is more and incumbents like Western Union are in- interesting, is that BBVA paid USD 1,170 per creasingly challenged from well-founded customer. Facebook on the one hand, paid "The market environment has start-ups as well as more established competi- recently USD 42 for one Whatsapp-user, while stayed benign and pushed tors. Fueling this competition, Xoom, a on the other hand Klarna spent between USD open the door for IPOs." US-based digital money transfer provider, 6,000 – 8,000 per merchant acquired with acquired Bluekite. The Guatemala city-based German Sofort. company has built a technology platform for Geographically, 58 per cent of the targets guarantee all over Europe. cross-border bill payments and mobile phone were based in North America (Q1/2013: 67%), In terms of different initiatives it is striking top-ups. After launching services in Vietnam, followed by 33 per cent in Europe (Q1/2013: that consolidation and diversification Xoom now set out to South America and can 30%) and 5 per cent in Asia. The rest of the pressures are continuing drivers especially for also offer adjacent product services. world accounts for the remainder. This is in line commerce and online payment providers. Generally, the market environment has with our earlier observations. However, our However, we observe a significant increase stayed benign and pushed open the door for recent impression about North Americas’ loss within fast developing areas such as analytics IPOs. Coupon.com has been the first FinTech in location attractiveness has been endorsed. and security. For example Bottomline Technolo in 2014 that took itself to the stock exchange Currently, Anglo-American purchasers repre- gies bought Rationalwave Analytics for USD 8 floor. The company raised USD 168 million, sent only 50 per cent of total investors million in order to strengthen its portfolio of with an initial valuation approaching USD 1.2 (Q1/2013: 60%) and 22% of the capital pro- predictive analytics services. SWIFT, the billion. As of April 10, the share is trading up vided (Q1/2013: 78%). In the last year there Belgium-based worldwide payment network 31% of its issue price. Moreover, Mercury Pay- has been a sweeping change towards provider, boosted its compliance services ments officially filed papers proposing an IPO Europe and Asia. An observation that we portfolio with the acquisition of Omnicision. that could generate the company USD 100 have also linked to more cross-border deal million. Those two companies will most likely activity. German-based COR&FJA Banking Key drivers and rationale of M&A activity not remain the only IPO candidates. Additional Solutions was sold to Sopra in Switzerland, A seemingly contradictory transaction took likely candidates include Alibaba and allowing the new owner access to a new place between two radically different banking SafeCharge. Chinese E-commerce giant market and client base. British mobile banking institutions. The online banking start-up Simple, Alibaba revealed plans to go public on an and payment technology provider Monitise which seeks to distinguish itself from traditional U.S. stock exchange and allegedly raise USD expanded its business activities in Turkey and banks by diminishing fees and offering its cus- 15 billion which would value the company at the Middle East with the acquisition of Turkish tomers data-rich analysis of their transactions, more than USD 100 billion. Regarding pay- Pozitron. The already mentioned acquisitions sold itself to European finance giant BBVA. ments, Alibaba is of particular interest due to its subsidiary Alipay which is on the way to become the PayPal of the East. Proceeds raised from capital markets are expected to fuel international expansion beyond China. Lastly, SafeCharge, an international payment service provider, announced plans to raise up to USD 100 million by listing shares on London’s AIM stock exchange. In this case the company would have a market capitalization of between USD 350 – 400 million. Besides the players already highlighted in this and our 2014 preview, further candidates include particular PE and VC-owned companies (e.g. Adyen, GlobalCollect, Klarna, Square).

Sources: Mergerstat, Reuters, WSJ, company publications

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Venture Capital Activity & Company Profiles Q1 2014

Volume Funding Target (Country) Round (USDm) Investor(s) (USDm) Description 1 Lending Works (GBR) Seed 5.30 David Kyte, Max Ashton, Alex Rogers, Keith 5.30 Lending Works is a peer-to-peer operator that matches thoroughly Saldanha underwritten personal loan borrowers with lenders.

2 Indiegogo (USA) B 40.00 Institutional Venture Partners, Kleiner Perkins 65.50 Indiegogo is an US based and internationally active crowdfunding Caufield & Byers, Insight Venture Partners, MHS platform, for the funding of private campaigns and small businesses. Capital, Metamorphic Ventures, ff Venture Capital 3 Fundera (USA) Venture 3.40 Khosla, First Round Capital, Lerer Ventures, SV 3.40 Fundera is an online market place that helps SMEs to facilitate funding Round Angel, and various angel investors including through alternative lending. Strauss Zelnick, Rob Wiesenthal, David Rosenblatt, and David Tisch 4 Remitly (USA) A 5.50 QED Investors, Founder‘s Co-op, TomorrowVentures, 10.50 Remitly offers expatriats a money transfer services from a mobile phone in Bezos Expeditions, Trilogy Equity Partnership the USA to a mobile phone in a country abroad.

5 iwoca (GBR) Venture 7.58 Global Founders Capital, Beyond Digital 10.80 iwoca offers merchant finance in the form of immediate working capital Round Media, Talis Capital to SME merchants on amazon and eBay in the UK.

6 CAN Capital (USA) C 33.00 Meritech Capital Partners, Accel Partners, 63.00 CAN Capital is the largest, non-bank alternative capital provider to Ribbit Capital, QED Investors SMEs in the USA and Latin America using its own real-time platform and risk-scoring models. 7 Mswipe (IND) A N/D Matrix Partners, Axis bank N/D Mumbai based Mswipe offers mobile acceptance solutions for small Indian merchants.

8 ChargeBee (USA) A 0.80 Accel Partners 1.17 ChargeBee provides a seamless & flexible online recurring billing experience to customers & manages customer subscriptions.

9 BankBazaar (IND) B 13.00 Sequoia Capital, Walden International 19.00 Chennai based BankBazaar is a neutral online marketplace that gives instant customized rate quotes on loans and insurance products comparing prodcuts of India‘s leading financial institutions. 10 Bright*Sun (GBR) Angel 0.20 London Venture Partners 0.20 Bright*Sun uses big data analytics to recommend investment ideas to VCs based on their specific criteria.

11 GetOne Rewards (USA) B 2.50 Fulcrum Growth Fund II, LLC, Milestone Venture 3.01 GetOne Rewards provides a cloud-based digital platform aggregating Partners traditional loyalty card systems combined with mobile communication, mobile marketing and tracking and reporting solutions. 12 Chrome River (USA) C 17.00 Bain Capital Ventures, First Analysis, Argentum 20.00 Chrome River provides automated cloud-based expense reporting and invoice management synchronizing with common accounting systmes.

13 crowdfunder (USA) Angel 1.00 Rob Nail, Sharon Chang, Ben Goldhirsh, Ali 1.40 crowdfunder is a business crowdfunding platform that allows startups Tabibian, Howie Cohen, John Gunn, Andy Bloch, and small businesses to connect with investors to raise funds through Naranya Nummorum, 500 Startups, Global Eye equity or revenue-based financing. Investments, Amir Banifatemi, K5Ventures 14 WePay (USA) C 15.00 Phil Purcell, Max Levchin, Maynard Webb, 34.20 WePay provides an online payments platform with merchant accounts Raymond Tonsing and consumer accounts for peer-2-peer, group or B2C payments.

15 Korbit (KOR) Seed 0.40 Tim Drape, Naval Ravikant, David Lee, Barry N/D Seoul-based Korbit is South Korea’s largest Bitcoin exchange company. Silbert, Pietro Dova, Michael Yang, Jay Eum

16 Virtrue (USA) Angel 4.00 N/D 4.00 Virtrue uses social network data for identity verification of individuals hereby including 50+ different categories.

17 Kensho (USA) Seed 10.00 Accel Partners, General Catalyst Partners, 10.00 Kensho combines natural language search queries, graphical user Google Ventures Fidelity Investments, interfaces, and secure cloud computing to create a new class of Devonshire Investors, NEA Venture Capital analytics tools for investment professionals. 18 QFPay (CHN) B 16.50 Sequoia Capital 16.50 QFPay is mobile payment service that allows to accept bank cards anywhere and anytime via a device wirelessly connecting to tablets or smartphones. 19 Stripe (USA) C 80.00 Founders Fund, Khosla Ventures, Sequoia 120.00 Stripe is a developer friendly and easy to integrate payment gateway to Capital, Allen & Company accept online payments for all major credit card schemes.

20 VisibleBrands (USA) B 2.30 N/D 11.20 Visiblebrands enables retailers to offer shoppers personalized offers when entering the store using location-based advertising.

21 Sensorberg (DEU) Venture 1.00 Technologie Holding GmbH 1.00 Sensorberg is a provider for customizable iBeacon technology and App Round code integration and part of Microsoft‘s accelerator program in Berlin.

22 Kreditech (DEU) Debt Kreos Capital 8.00 German based Kreditech applies Big Data technologies on credit decisions to give out short term microloans globally.

23 MediSwipe (USA) N/D 1.10 N/D 1.70 MediSwipe offers services for medical businesses including a cloud based patient data solution, PSP services and gift/loyalty card programs and POS terminals. 24 GoCardless (GBR) B 7.00 Balderton Capital, Accel Partners, Passion 11.80 GoCardles offers easy to integrate direct debit payment services for Capital smaller merchants to easily accept online payments.

25 Yiftee (USA) A 2.10 Dr. Peter Fitzgerald, Scott Cook, Burt 2.95 Yiftee lets consumers send gift voucher ($5-$200) among friends, family Sugarman, Mary Hart, Franklin Johnson, Jillian and colleagues quickly and easily via email, mobile and social networks. Manus, Michael J. Levinthal 26 Coin (USA) A 15.00 N/D 16.50 Coin is a connected device containing als credit, debit, gift, loyalty and membership cards in one place.

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Volume Funding Target (Country) Round (USDm) Investor(s) (USDm) Description 27 Zopa (GBR) Venture 22.70 Arrowgrass Capital 56.60 Zopa is a P2P money lending service that allows lenders and borrowers Round to deal directly with one another.

28 2C2P (SGP) B 2.00 GMO VenturePartners 3.00 2C2P is Thailand based Payment Service Provider with special focus on emerging markets in Asia and alternative payment methods.

29 RocketMiles (USA) A 6.50 August Capital, Peterson Ventures, Link 8.50 RocketMiles grants airline bonus miles via loyalty system with selected Ventures, Atlas Venture, Chicago Ventures, airlines for bookings at partnering hotels via the its platform. Sam Yagan 30 Quippi (USA) Venture 2.00 Avalon Ventures 2.00 Quippi operates a service aimed at the Mexican market which allows Round people in the U.S. or Mexico to buy online gift vouchers and share them with friends and family. 31 Enigma Technologies A 4.50 Comcast Ventures, American Express Ventures, 6.42 Collects and provides analysis on publicly available data produced by (USA) Crosslink Capital, New York Times governments, universities, companies, and organizations.

32 Powa (GBR) B 20.70 ND 96.70 Powa provides a full suite of e-commerce sales and payment solutions, as well as an QR and sound based mCommerce and payment application. 33 Red Zebra Analytics Venture N/D SBT Venture Capital N/D Enables banks and merchants to offer loyalty and cash backs to (GBR) Round customers via the Red Zebra rewards website (hub) and enables automatical coupon redemption after „booking“ the reward to the credit or debit card, no merchant integration needed. 34 CashBet (USA) Angel 1.70 Fred Hsu 1.90 Enables software developers to use real-money play via the CashBet infrastructure, leveraging its KYC processes, gambling licenses and PCI compliance. 35 Celery (USA) Seed 2.00 Y Combinator, SV Angel, Max Levchin 2.00 Celery is a “pre-commerce” platform that allows online merchants to accept pre-orders for their goods by collecting order information from customers and postponing the payment processing to the time when shipment is ready. 36 Dónde (USA) Seed 1.00 Mercury Fund, Chicago Ventures, Vine St. 1.17 Dónde is a location search tool that aims to increase retail sales via Ventures, Tim Kopp website traffic that also provides web analytics.

37 Tapingo (USA) B 10.50 Khosla Ventures, Carmel Ventures 14.00 Tapingo offers a mobile and online service to pre-order and pre-pay for goods and services at physical merchants to avoid queues and offers an implementation of loyalty and reward marketing. 38 Birdback (GBR) Venture 2.40 Passion Capital, Paul Nikkel, Luke Johnson, 2.40 Enables banks and merchants to offer loyalty and cashbacks to Round Playfair Capital customers and automatical coupon redemption by entering the payment card number at the selected offer on the merchants website. 39 PayNearMe (USA) E 20.00 GSV Capital, August Capital, Maveron, True 56.50 PayNearMe offers consumers a cash based online payment method, Ventures, Khosla Ventures where they pay at offline stores (e.g. 7-Eleven) for bills or agents for their online purchased goods or services. 40 Datamolino (SVK) Seed 0.64 Slovak Innovations and Technologies Fund (FIT) 0.70 Datamolino offers a cloud-based service to SMBs that allows automated online invoices management and online document filing, while keeping all information synchronized with existing software. 41 Kantox (GBR) A 8.36 Partech Ventures, Cabiedes & Partners, 9.84 Offers currency conversion via matching transactions from a network of IDInvest Partners SME clients, complemented by own capital market access.

42 PlaceIQ (USA) C 15.00 Harmony Partners, Iris Capital, US Venture 27.00 PlaceIQ uses unstructured data from various sources for consumer Partners, IA Ventures, Valhalla Partners profiling and location based targeting formCommerce services on mobile devices. 43 365 Retail Markets (USA) N/D Plymouth Ventures 365 retailmarkets offers biometric and QR enabled self-checkout- devices and the corresponding software for device management, and inventory & sales reports. 44 Front Desk (GBR) A 4.00 FLOODGATE, Second Avenue Partners, Version 7.20 Front Desk provides businesses with software to organize mobile One Ventures, Rich Barton payment acceptance, scheduling and other documents, mainly from mobile devices. 45 Safello (SWE) Seed 0.60 Erik Voorhees, Roger Ver, Nicolas Cary 0.60 Safello is a high secure platform that enables the exchange and storage of Bitcoin.

46 Intacct (USA) Debt Silicon Valley Bank 64.80 Intacct is a provider of cloud-based financial management and accounting applications for businesses and CPA firms.

47 Intacct (USA) Series G 30.00 Battery Ventures, Bessemer Venture Partners, 94.80 Intacct is a provider of cloud-based financial management and Costanoa Venture Capital, Emergence Capital accounting applications for businesses and CPA firms. Partners, Sigma Partners, Split Rock Partners 48 Coinsetter (USA) Partial 0.51 N/D 1.01 Coinsetter is a trading plattform for the virtual currency Bitcoin currently Close only accessible as a private beta.

49 ZenPayroll (USA) A 20.00 General Catalyst Partners, Kleiner Perkins 26.10 ZenPayroll offers an easy to use cloud-based payroll application Caufield & Byers automatically and paperlessly taking care of government payroll taxes and reporting. 50 Kapitall (USA) B 13.00 Bendigo Partners 20.30 Kapitall is an investing platform where modern investors can learn about the market, research stocks and funds, share investing ideas, and build virtual and real brokerage portfolios. 51 mCASH (NOR) A 6.63 Northzone Ventures, Entree Capital 6.63 Norwegian startup mCASH offers aQR based mobile wallet solution for P2P transactions and in-store and online shopping.

52 Ezetap (IND) B 8.00 Helion Venture Partners, Social + Capital 11.50 Indian based Ezetap offers a Android based mobile acceptance Partnership, Berggruen Holdings solution with a monthly flatrate pricing.

53 eCommera (GBR) C 41.00 Dawn Capital, ePlanet Ventures,Frog Capital, 51.40 eCommera is an ecommerce services provider that offers advisory, West Coast Capital, Western Technology support and software services to help retailers develop and operate Investment, WPP ecommerce businesses with regard to CRM, order management, payment modules and data analysis.

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Volume Funding Target (Country) Round (USDm) Investor(s) (USDm) Description 54 Tradeshift (GBR) C 75.00 Scentan Ventures 114.00 Tradeshift is an internationally operating provider of electronic invoicing services that allows for automated document digitalization and integrates with ERP and accounting solutions. 55 ProHatch (USA) Seed N/D Pavonis Group N/D Prohatch is a crowdfunding platform with focus on socially responsible businesses and projects, with an integrated community as a broadcasting and problem solving forum. 56 Knox Payments (USA) Seed 0.90 Jaffray Woodriff 0.98 Knox payment offers online ACH payments via an online interface for partnering banks‘ customers at merchant checkouts at a fixed pricing.

57 Nok Nok Labs (USA) B 16.50 Lenovo Group, DCM Data Systems, ONSET 31.50 Nok Nok Labs offers a user verification solution that allows for an Ventures identification to any application by using the existing security capacities of their respective device. 58 Dash (USA) Seed 1.20 Mike Germano, New York Angels, Caerus 1.90 Dash is an iOS application that offers the consumer a (mobile) payment Ventures, Jonathan Segal process within bars or restaurants, enabling the user to view and pay his tab through the app. 59 Wacai (CHN) A 15.00 QiMing Venture Partners 28.00 Wacai is a Chinese personal financial management app that allows for bookkeeping, investing and credit card management.

60 Pango (ISR) Venture 6.50 Bearing Capital 6.50 Pango is an app based solution for finding and paying public and Round private parking spaces.

61 borro (GBR) Private 112.00 Victory Park Capital 153.00 borro is providing online loans secured against personal assets such as Equity fine art, antiques, jewellery, luxury watches, prestige & classic cars, fine wine and more. 62 Slyce (CAN) A 10.80 Beacon Securities, Salman Partners, Harrington 14.50 Slyce is a visual based purchasing system using photo recognition Global, PI Financial software enabling shoppers to buy mobile or online.

63 IntelleGrow (IND) Venture 4.50 Omidyar Network, Michael & Susan Dell 4.50 Mumbai-based IntelleGrow provides customized and easy debt finance Round Foundation to small and growing businesses in India.

64 Payoneer (USA) D 25.00 Susquehanna Growth Equity, Carmel Ventures, 39.00 Payoneer is a corporate pay-out solution that facilitates international Vintage Venture Partners, Greylock Partners online payments to suppliers and service providers.

65 SocietyOne (AUS) A 8.50 Reinventure, Global Founders Capital, Justin Reizes 8.50 SocietyOne is Australia’s first fully compliant P2P lending platform.

66 OnDeck (USA) E 77.00 Tiger Global Management, Institutional Venture 179.00 OnDeck provides capital funds to small business on the high street using Partners, RRE Ventures, SAP Ventures, Google instant credit scoring technology on online banking and merchant Ventures, First Round Capital, Industry Ventures, processing data. Peter Thiel 67 SimpleTuition (USA) E 26.00 Atlas Venture, Flybridge Capital Partners, North 52.00 SimpleTuition offer loan comparison to students as well as tips, advice, Hill Ventures interactive tools to ensure students plan better for the cost of college.

68 Flypay (GBR) Seed 1.52 Entree Capital 1.52 Flypay is a mobile payment app that transforms the restaurant payment experience, allowing customers to check, split and pay their bill from their phone and reducing the payment process. 69 WorldRemit (GBR) A 40.00 Accel Partners 47.67 WorldRemit is a online and mobile money transfer business with the option to use card payments and innovative local payment methods.

70 Azimo (GBR) A 10.00 Greycroft Partners, Frontier Investments Group, 11.00 Azimo is a global processing business providing internet and mobile eVentures, TA Venture, RI Digital Ventures, KRW based inter-country consumer money transfer services. Schindler Private Ventures 71 Trulioo (CAN) A 6.00 BDC Venture Capital, Blumberg Capital, 8.30 Trulioo provides companies, that operate Facebook Connect, global Tenfore Holdings identity and age verification services as Risk Management against fake accounts. 72 Credit Karma (USA) C 85.00 Google Capital, Tiger Global Management, 118.00 Credit Karma allows users to access their credit filing fore free as well Ribbit Capital, Susquehanna Growth Equity as debt management and tools for tracking and optimization of ones personal credit score. 73 SHAREIGHT (GBR) Seed 0.91 Equity crowdfunding via Seedrs 0.91 SHAREIGHT‘s solution is to aggregate all of the major brands and retailers into one designed-for-mobile platform that provides easy-to-use browsing, shopping, saving, communicating and sharing of products. 74 Xapo (USA) A 20.00 Benchmark, Fortress Investment Group 20.00 Hong-Kong-incorporated and US-based Xapo offers a new new secure bitcoin storage solution consisting of an easy access wallet and a locked-down vaul. 75 Acorns (USA) B 6.16 Jacobs Asset Management 8.96 The Acorns app allows people to round up purchases and use the change for commission-free micro investing.

76 OKCoin (CHN) A 10.00 Mandra Capital, VenturesLab, Ceyuan 10.00 OKCoin is a globally oriented Bitcoin trading platform committed to Ventures providing safe, efficient, stable Bitcoin transactions.

77 i.Sec (NGA) Venture 10.00 Synergy Capital 10.00 i.Sec offers a service that protects customers from unwanted and Round malicious debits on their accounts and other payment related security services. 78 FundedByMe (SWE) Seed 0.54 Own equity crwodfunding campaign 0.54 FundedByMe is a Sweden-based crowdfunding platform connecting investors and entrepreneurs.

79 Ziploop (USA) Seed 2.20 Bill Elmore, James Peters, Ted Breck, Andrew 2.20 Ziploop is a mobile application that primarily addresses power shoppers Rudd, Grant Inman, John Balen in the retail area by enabling digitalization and email import of coupons and rewards, and loyalty functions. 80 Ezetap (IND) Venture N/D Amex N/D The Bangladore-based Ezetap has deployed a (mobile) acceptance Round solution in India converting smartphones and tablets into full-scale POS solutions. 81 Coupa (USA) F 40.00 Meritech Capital Partners, Icon Venture 89.00 Coupa develops cloud-based expense and contract management Partners, Northgate Capital, Crosslink Capital, software for businesses and allows intelligent expense report and Mohr Davidow, Ventures, Battery Ventures, El auditing. Dorado Ventures

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Volume Funding Target (Country) Round (USDm) Investor(s) (USDm) Description 82 Vend (NZL) B 20.00 Valar Ventures, Square Peg Capital 37.50 Vend offers a full software POS suite for offline retailers for MAC, PC or iPads incl. payment acceptance and a loyalty solution.

83 SmartAsset (USA) A 5.20 Javelin Venture Partners, Denis Grosz, Brendan 6.70 SmartAsset is a technology platform that provides personalized answers Wallace, SV Angel, Quotidian Ventures to complex financial questions by evaluating one‘s personal financial informations. 84 Forter (ISR) A 3.00 Sequoia Capital 3.00 Israeli-based Forter offers online merchants a real time plug and play fraud prevention solution.

85 Kraken (USA) A 5.00 Hummingbird Ventures, Trace Mayer, Bitcoin 5.00 Kraken is an online virtual currency trading platform for Bitcoin, Ripple, Opportunity Fund Litecoin, Namecoin, Dogecoin, Ven and other digital currencies.

86 Circle (USA) B 17.00 Oak Investment Partners, Breyer Capital, Accel 26.00 Circle is currently working on bitcoin based digital currency products Partners, General Catalyst Partners, Pantera with the purpose to revolutionise the global money handling Capital, Bitcoin Opportunity Fund infrastructure - no specific products have been launched yet. 87 CircleUp (USA) B 14.00 Canaan Partners, Google Ventures, Union 23.00 CircleUp connects investors with, and offers the possibility to invest Square Ventures, Maveron, Rose Park Advisors in early stage start ups with focus on consumer products and retail companies. 88 GoCoin (SGP) A 1.50 BitcoinShop, Owen Van Natta 2.05 GoCoin specializes in payment APIs and SDKs that enable the acceptance of crypto currencies as well as the settlement to local currencies and bank accounts. 89 TouchBistro (USA) Seed 1.50 Walden Venture Capital, Kensington Capital 5.49 TouchBistro offers an iPad-based POS systems to restaurants, fast food joints, food trucks, coffee shops and others in the food services industries.

90 Realty Mogul (USA) A 9.00 Canaan Partners 10.10 Realty Mogul is a crowdfunding platform where investors can pool their money to jointly invest in properties across the United States.

91 ThreatMetrix (USA) E 20.00 Adams Street Partners, August Capital, Tech 56.40 ThreatMetrix offers anti fraud services that are developed on the basis of nology Venture Partners, US Venture Partners, anonymously shared data across its clients. Tenaya Capital, CM Capital Investments 92 2can (RUS) B 5.00 Almaz Capital, InVenture Partners, ESN Group 7.00 Russia-based 2can provides a hardware dongle turning regular smartphones into POS as well as apps for mobile payments and acceptance. 93 Alkami (USA) Partial 9.61 N/D 14.30 Alkami is a software company providing eBanking and content Close management solutions to the financial services industry.

Source: Innovalue Research, based on publicly available information

Deal Activity M&A

Date Transaction Announced Target Company (Country) TC Industry Buyer(s) (Country) value (USDm) 1 1/6/2014 Financial Tools (USA) Provides financial analysis and credit risk Wolters Kluwer Financial Services (NLD) N/D management solution

2 1/7/2014 Datec Retail Systems (CZE) Develops and distributes automation software Wincor Nixdorf (DEU) N/D for payment and merchandise management services for retailers

3 1/8/2014 Fanminder (USA) Provides online social web and mobile services Total Merchant Services (USA) N/D

4 1/13/2014 Impendium Systems (GBR) Provides online private regulatory platform Deutsche Börse (DEU) N/D solutions

5 1/14/2014 EGS Group (GBR) Provides cloud-based purchase-to-pay and Proactis (GBR) 4.8 e-procurement solutions

6 1/14/2014 ideeli (USA) Provides online shopping services Groupon (USA) 43

7 1/17/2014 Afterpay (NLD) Provides online post payment services arvato Financial Solutions (GBR) N/D

8 1/17/2014 IdenTrust (USA) Provides identity authentication solutions Assa Abloy (SWE) N/D

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Date Transaction Announced Target Company (Country) TC Industry Buyer(s) (Country) value (USDm) 9 1/21/2014 CloudAsia (HKG) Provides payment processing services Allied Wallet (GBR) N/D

10 1/27/2014 Payment Processing (USA) Provides payment processing solutions and Global Payments (USA) 420 services

11 1/31/2014 Rationalwave Analytics (USA) Provides SaaS based data analytics services Bottomline Technologies (USA) 7.9

12 2/3/2014 Pozitron Yazilim (TUR) Delivers mobile banking, payments and Monitise (GBR) 98 commerce solutions

13 2/5/2014 BlueKite (GTM) Develops software applications for online bills Xoom (USA) 15 payment services

14 2/7/2014 Hovr.it (CAN) Engages in providing visual search application Slyce (CAN) N/D services

15 2/10/2014 Equinox Payments (USA) Provides payment terminals, applications and NBS Payment Solutions (CAN) N/D services to the Canadian market

16 2/10/2014 IND Group Holding (CYP) Supplier of online and mobile banking and Misys (USA) N/D personal financial management tools

17 2/11/2014 MagCorp (DEU) Develops an open-source e-commerce platform Shopgate (DEU) N/D

18 2/11/2014 Lumidigm (USA) Manufactures biometric and spoof detection HID Global Corp. (SWE) N/D equipment

19 2/14/2014 GetJar (USA) Provides mobile phone software applications Sungy Mobile (CHN) 35.7

20 2/19/2014 COR&FJA Banking Solutions (DEU) Provides information technology system solutions Sopra Banking Software (CHE) 17.5

21 2/19/2014 PayU India (IND) Provides online payment solutions Naspers (ZAF) N/D

22 2/21/2014 Simple (USA) Provides online commercial banking services BBVA (ESP) 117

23 2/21/2014 Tedemis (FRA) Provides direct marketing services Criteo (FRA) 28.8

24 2/24/2014 C-Sam (USA) Provides mobile transaction application solutions MasterCard (USA) N/D

25 2/26/2014 BancTec (USA) Offers electronic processing systems and software HandsOn3 (USA) N/D services

26 2/27/2014 BookFresh (USA) Provides online scheduling and marketing services Square (USA) N/D for personal businesses

27 3/4/2014 Banno (USA) Provides data-enriched web and transaction Jack Henry & Associates (USA) N/D marketing services

28 3/5/2014 StickyStreet (USA) Provides customer loyalty solutions for mobile Mozido (USA) N/D technology industry

29 3/6/2014 Rainfin (ZAF) Provides an online loan market Barclays Africa Group (GBR) N/D

30 3/7/2014 Coastal Contacts (CAN) Global online direct-to-consumer retailer of vision Essilor (FRA) 392 care products and services

31 3/10/2014 Capital Processing Network (USA) Provides payment processing and merchant Pivotal Payments (CAN) N/D account services

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Date Transaction Announced Target Company (Country) TC Industry Buyer(s) (Country) value (USDm) 32 3/11/2014 HiFX (GBR) Provides currency exchange, payment brokerage Euronet Worldwide (USA) 242 and risk management services

33 3/12/2014 SaaS Markets (USA) Leading provider of cloud marketplaces to Sysxnet (IRL) N/D companies across the globe

34 3/12/2014 Moneto (USA) Prepaid mobile platform and a core VISA prepaid Cachet Financial Solutions (USA) N/D mobile money platform

35 3/19/2014 Cenzic (USA) Provides software, managed service and cloud Trustwave (USA) N/D security products

36 3/24/2014 Nets Holding (DNK) Provides payment and credit card services Advent International Plc, Bain Capital Europe 3,139 LLP, ATP Private Equity Partners, and Via Venture Partners A/S (DNK)

37 3/24/2014 Pancredit (GBR) Publishes software based financial solutions Equiniti (GBR) N/D

38 3/26/2014 Opticard (USA) Provides end-to-end gift and loyalty solutions MerchantWarehouse.com (USA) N/D

39 3/26/2014 MobiMagic (USA) Provides a software platform that extends POS pcAmerica (USA) N/D capabilities onto mobile devices

40 3/27/2014 Omnicision (GBR) Provides consulting services and solutions that Society for Worldwide Interbank Financial N/D specializes exclusively within financial crime Telecommunication (BEL)

Source: Mergerstat

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Company Info

Innovalue is a leading independent advisory firm with a strong expertise in payments. Our clients range from high-growth mobile payment startups to established fi nancial institutions or telecom companies and from cutting-edge strategic players to high-profile private equity and venture capital investors. We develop and implement tailored solutions on topics of strategic importance – including Growth, Efficiency and M&A – on engagements across Europe and beyond. Our passion for payments helps us to stay on top of the latest innovations of a rapidly changing industry. Our experience and knowledge of the payment markets allows us to provide sustainable benefits to our clients.

Key contact: Andreas Habersetzer, Partner, Innovalue [email protected]

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