State of Fintech Q1'21 Report: Investment & Sector Trends to Watch

State Of Fintech Q1’21 Report: Investment & Sector Trends To Watch

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Mortgage Tech Funding Rebounds After A Slow 2020 4 Contents

9 30 77 Fintech In Review Sector Trends Appendix

5 WHAT THE STATE OF FINTECH COVERS

PAYMENTS BANKING DIGITAL LENDING WEALTH MANAGEMENT Payments processing, Digital-first banks or Companies creating new Personal finance tools, card developers, money companies digitizing solutions for personal or investment and wealth transfer platforms, and banking services for credit commercial lending management platforms, tracking software and debit and analytics tools

INSURANCE CAPITAL MARKETS SMB REAL ESTATE Companies selling or Sales and trading, Companies focused on Mortgage lending, distributing insurance digitally analysis, and providing solutions to transaction digitization, or providing data analytics infrastructure tools for small- and medium-sized and financing platforms and software for (re)insurers financial institutions businesses

6 Summary of findings Overall fintech trends

Q1’21 was the largest funding quarter on record. This was Deal growth was global. Every continent except for Africa the largest quarter for fintech funding — surpassing saw QoQ growth in deal activity. Europe’s deal activity Q2’18’s previous record, which included Ant Group’s $14B surpassed that of Asia last quarter, and this continued into funding round. Across 614 deals, VC-backed fintech Q1’21 with 151 total fundraises to VC-backed companies. companies raised $22.8B. This represents 15% and 98% Europe also saw funding growth of over 180% QoQ, year-over-year (YoY) growth, respectively. Though some primarily driven by mega-rounds which accounted for 68% fintech verticals experienced slight declines in deal activity, of the continent’s total funding for the quarter. each one had positive quarter-over-quarter (QoQ) funding Exit activity hit a new high. There were 11 IPOs and 67 M&A growth. deals (including announced, but not yet completed deals) Mega-rounds drove this quarter’s funding boom. There for VC-backed fintech companies in Q1’21. Many of these were 57 $100M+ mega-rounds this quarter, a new record, were completed via SPAC transactions, including Bakkt, which together accounted for 69% of total funding in the SoFi, MoneyLion, and eToro. quarter. As a result, the average deal size this quarter nearly doubled vs. Q4’20, from $19.3M to $37M.

Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, 7 private equity firms, or any debt, secondary, or line of credit transactions. All data is sourced from CB Insights. Summary of findings Fintech industry trends

Payments: Payments companies raised over $6B in Q1’21, Insurance: Insurtech deal activity fell by 5% in the quarter a QoQ increase of 188%. Deal activity in the same period while funding increased 12%. Insurance was the only increased 50% to 114. There were 18 mega-rounds, which major fintech vertical where mega-rounds represented accounted for over 75% of total funding. less than 50% of total funding in the quarter. Banking: While digital banking deal activity declined 12% Capital markets: Capital markets deal activity declined 4% QoQ, funding grew 25%. This was the first decline in deal QoQ though funding increased significantly by 250% to activity since Q4’19. $8B. Like wealth management, mega-rounds were over Digital lending: Funding and deal activity in Q1’21 80% of total funding in the quarter. exploded to $4B and 102, representing growth of 203% SMB: Funding grew 154% to $3.4B while deal activity and 96%, respectively. The 8 mega-rounds in the quarter declined by 21%. This was the third consecutive quarter of was the highest total since Q2’19. declining deal activity. Wealth management: Funding rebounded significantly, Real estate: Funding to real estate companies grew 29% growing 560% QoQ to $5.4B on the back of 8 mega- to $2.4B as deal activity declined by 9%. rounds which made up 83% of total funding in the quarter. Deal activity increased 27% over the same period.

Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, 8 private equity firms, or any debt, secondary, or line of credit transactions. All data is sourced from CB Insights. Q1’21 Fintech In Review

9 Q1’21 FINTECH SPOTLIGHT #1 Fintech M&A and IPO activity reached a new high in Q1’21… M&A and IPO activity for VC-backed fintech companies, Q1’19 – Q1’21

M&A deals IPOs 11 10

6 5 5 4 3 2 2

35 41 39 29 45 39 44 50 67

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21

10 Q1’21 FINTECH SPOTLIGHT #2 …though many of the most anticipated fintech IPOs have so far lagged the broader market Normalized performance of select fintech IPOs, 12/31/2020 – 3/31/21

60% 50% 40% 30% 20%

10% 5.8% 0% 4.3% -4.5% -10% -20% -19% -24% -30% -27.3% -40% 12/31/2020 1/14/2021 1/28/2021 2/11/2021 2/25/2021 3/11/2021 3/25/2021 S&P 500 Affirm Lemonade Duck Creek Technologies Blender Financial Technologies Root

Source: Yahoo Finance 11 Q1’21 FINTECH SPOTLIGHT #3 Israel-based fintechs set a funding record

Funding to Israel-based fintechs increased 314% in Q1’21 Top 5 Q1’21 deals raised by Israel-based fintechs

Funding amount ($M) Deal count Company Deal Date // Amount Description $400 12 12 Jan ‘21 // $110M Payments $320

8 Feb ‘21 // $75M Insurance & Banking $240 7 8

Banking & Personal 5 Feb ‘21 // $75M $160 4 Finance 4 $80 Mar ‘21 // $75M Blockchain $85 $233 $146 $100 $414 $0 0 Mar ‘21 // $20M Banking Q1 Q2 Q3 Q4 Q1 2020 2021

12 Q1’21 FINTECH SPOTLIGHT #4 Digital asset custody and investment hits the mainstream Incumbents Q1’21 digital asset initiatives Additional Q1’21 digital asset initiatives & funding activity March 10 — Launched J.P. Morgan Cryptocurrency Exposure Basket, a new debt instrument tied to companies with crypto exposure like Square, MicroStrategy, and Riot Blockchain, among others. March 17 — Launched 5 new crypto investment products: Basic Attention Token (BAT) Trust, the March 17 — Announced that wealthy clients will be given Chainlink (LINK) Trust, the Decentraland (MANA) Trust, access to its bitcoin funds; 2 of the available funds are the Filecoin (FIL) Trust, and the Livepeer (LPT) Trust. managed by Galaxy Digital, and the third is a joint venture between FS Investments and NYDIG. March 18 — Participated in crypto-custody provider Fireblocks’ $133M Series C; the company will serve as a partner in the bank’s plans to become a custodian for digital Funding: $100M Series A Funding: $37M Series A assets on behalf of institutional investors. Focus: Utah-based Taxbit Focus: Wyoming-based Avanti offers an automated tax January 22 — Launched its first commercial solution for focuses on building a digital solution for crypto users, digital asset custody and trading in Switzerland, which has a asset bank. exchanges, and merchants. progressive view on digital asset regulation and adoption.

Note: Selected banks’ digital asset initiatives. 13 Q1’21 FINTECH SPOTLIGHT #5 Tiger Global drives hedge fund deal activity Of the VC-backed fintech deals with hedge fund participation, Tiger Global represented nearly 40% of the activity, participating in 16 rounds — 14 of which were mega-rounds.

Hedge fund activity as % of overall investor activity Select Q1’21 deal activity Tiger Global deal activity

16 $450M Series C

11 $350M Series D

$300M Series E+ 5 5 $300M Series C 2 0.8% 0.9% 0.9% 1.3% 1.9% $300M Series D

Q1'20 Q2'20 Q3'20 Q4'20 Q1'21

14 FAMGA IN FINTECH FAMGA in fintech Q1’21 updates

• Partnership: Integration with Shopify’s Shop Pay will enable shoppers to buy products from Shopify merchants directly on Facebook and Instagram • Partnership: India-based conglomerate Reliance Industries is working with Facebook and Google on a national digital payment network

• Partnership: Announced Apply Pay support for crypto payments through a new partnership with BitPay and its BitPay Card

• Partnership: Italy-based open banking company Fabrick to become part of Microsoft Commercial Marketplace • Product: Launched Cloud for Financial Services, specifically tailored for retail banking

• Partnership: Albertsons partnered with Google to improve its online shopping experience, including integration of Google Pay • Partnership: India-based conglomerate Reliance Industries is working with Facebook and Google on a national digital payment network

• Acquisition: Acquired India-based Perpule in March. Perpule is an omnichannel engagement and payments platform for offline retail stores

15 FINTECH EXIT ACTIVITY Fintech exits heat up, driven by SPACs

Select IPOs Select SPAC transactions Challenger banks Digital assets/crypto

January 13, 2021 (began trading) January 7, 2021 January 11, 2021 Installment lender Affirm priced its Financial service platform SoFi Digital asset marketplace Bakkt and initial offering at $49 per share and announced plans to merge with Social VPC Impact Acquisition entered an began trading nearly 2x the target at Capital Hedosophia Holdings V to agreement to take the company $97. become a publicly traded company in public in a deal valued at $2.1B. a deal valued at $8.65B.

March 3, 2021 (began trading) February 12, 2021 March 16, 2021 Digital health insurance company Oscar Health launched its IPO. The company MoneyLion, a digital financial Social trading platform eToro and priced its shares at $39 and began platform, entered an agreement with Fintech Acquisition V will merge in trading slightly below at $35. Fusion Acquisition to go public via a deal valued at $10.4B. SPAC valuing the company at $2.4B.

16 FINTECH INVESTMENT TRENDS Fintech funding more than doubled QoQ Global VC-backed fintech funding trends, Q1’18 – Q1’21

98% 110% $14,000 $8,093 $8,373 $8,359 $9,502 $9,205 $11,104 $13,271 $10,413 $11,488 $10,356 $10,436 $10,834 $22,776

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2021

17 FINTECH INVESTMENT TRENDS Deal activity increased 15% YoY to reach highest level since Q3’19 Global VC-backed fintech deal activity, Q1’18 – Q1’21

15% 618 595 610 622 622 614 567 567 550 533 560 494 494

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2021 18 FINTECH INVESTMENT TRENDS Funding YTD exceeds 50% of total funding in 2020 Global VC-backed financing trends, 2016 – 2021 YTD (3/31/21)

Funding amount ($M) Deal count $60,000 3000

2390 $50,000 2361 2500 2081 1978 $40,000 2000 1609 $30,000 1500

$20,000 1000

614 $10,000 500 $23,526 $23,135 $48,327 $43,993 $43,114 $22,776 $0 0 2016 2017 2018 2019 2020 2021 YTD 19 FINTECH INVESTMENT TRENDS Mega-rounds drove this quarter’s funding boom Global VC-backed fintech mega-round ($100M+) funding trends, Q1’18 – Q1’21

Mega-rounds Mega-round funding % of total funding

60 57 100%

50 80% 40 29 30 60% 30 26 26 21 21 21 23 18 20 40% 20 15 12 10 20% 44% 79% 45% 58% 58% 52% 59% 51% 63% 50% 56% 43% 69% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2021 20 FINTECH INVESTMENT TRENDS Series D share of deals doubled QoQ… % of quarterly deal activity by deal stage, Q1’18 – Q1’21

100% 4% 7% 6% 4% 8% 7% 7% 6% 8% 9% 6% 7% 11% 9% Series D share 13% 13% 10% doubled in Q1’21 14% 15% 13% 15% 16% 75% 16% 15% 17% 18% 19% 16% Series E+ 23% 30% Series D 27% 24% 26% 23% 30% 26% 29% 23% Series C 50% 24% 24% 24% Series B Series A 25% 46% Seed / Angel 43% 42% 43% 43% 43% 39% 40% 36% 37% 33% 34% 34%

0% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 21 FINTECH INVESTMENT TRENDS …with 45 total Series D rounds in Q1’21 Quarterly deal activity by deal stage, Q1’18 – Q1’21

Seed / Angel 4% 8% Series A Series B Series C 189 Series D Series E+ 138

91 56 45 Series D rounds 16 increased 150% QoQ Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21

22 FINTECH INVESTMENT TRENDS Deal activity growth in Q1’21 was global Global VC-backed fintech deals by continent, Q1’20 – Q1’21

264 4% 8% 240 226 North 27 America 194 199 21 21 20 19 140 143 135 151 South 18 Asia 128 20 America Europe 147 17 131 131 12 120 126 Africa 10 11 8 6 6 Australia 4

Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2020 2021 2020 2021

23 FINTECH INVESTMENT TRENDS Europe saw the largest QoQ increase in funding Quarterly funding ($M) by continent, Q1’20 – Q1’21 $45 $193 $999 4% 8%

$5,049 +180% QoQ $0.3 in Europe $15 $15 $45 $43 $3,668 $313 $42 $334 $223 $405 $714 $534 $2,261 $2,048 $2,234 $1,802 $4,763 $1,842 $1,765 $1,908 $12,822

$6,211 $4,198 $5,731 $5,666

Q1 Q2 Q3 Q4 Q1 2020 2021 North America Asia Europe South America Australia Africa 24 FINTECH INVESTMENT TRENDS Robinhood raised 2 of the top rounds in Q1’21

Deal date // Total disclosed Company Amount raised ($M) funding ($M) Select investors Description

Feb ’21 // $2400M $5,571M New Enterprise Associates, Ribbit Robinhood allows users to invest in US stocks and ETFs Capital, Sequoia Capital, Index commission-free, and offers Robinhood Gold, a paid service for Ventures, Andreessen Horowitz active investors to access margin and extended hours trading.

Mar ‘21 // $1000M $2,833M Sequoia Capital, BlackRock, Klarna provides short-term, point-of-sale loans for online and General Atlantic, HMI Capital, in-store purchases and allows shoppers to buy now and pay Institutional Venture Partners, QED later. Investors

Jan ’21 // $1000M $5,571M New Enterprise Associates, Ribbit Robinhood allows users to invest in US stocks and ETFs Capital, Sequoia Capital, Index commission-free, and offers Robinhood Gold, a paid service for Ventures, Andreessen Horowitz active investors to access margin and extended hours trading.

Jan ’21 // $700M $930M Haitong Securities Co., HOPU 4Paradigm is a provider of artificial intelligence technology and Investment Management, Jinyi services that help financial firms to detect fraud, improve Investment, Goldman Sachs, efficiency, and reduce risk. Sequoia Capital China

Mar ‘21 // $600M $2,551M Fidelity Investments, AXA, Allianz X, Stripe is an online-based payment processing platform that National Treasury Management gives online merchants the ability to securely accept credit Agency, Sequoia Capital, Baillie card payments via custom-built forms. Gifford & Co.

25 FINTECH INVESTMENT TRENDS 2 of the top 10 deals went to Brazil-based cos

Deal date // Total disclosed Company Amount raised ($M) funding ($M) Select investors Description

Mar ’21 // $475M $1,044M Morgan Stanley, Moore Capital Dataminr is a data analytics technology company that unlocks Management, Institutional Venture hidden value in real-time public social media data, and services Partners, The Pritzker Organization, buy-side and sell-side financial firms, public sector, news, and Eden Global Partners corporate risk clients.

Jan ’21 // $450M $830M Insight Partners, Blossom Capital, Checkout.com offers a payment processing API that helps Greenoaks Capital Management, companies accept more payments around the world through GIC, Yuri Milner, Tiger Global one integration. Management

Mar ’21 // $425M $688M Andreessen Horowitz, QED Loft operates by buying, renovating, and selling real estate Investors, GIC, Caffeinated Capital, within a 4-month timeframe. Advent International, CPP Investments, Monashees+

Jan ’21 // $400M $1,795M Tencent Holdings, Ribbit Capital, Nubank is a Brazil-based challenger bank that currently offers Invesco, Whale Rock Capital digital savings accounts, no-fee credit cards, and personal Management, Sequoia Capital, GIC, loans to customers. Dragoneer Investment Group

Mar ’21 // $350M $513M Breyer Capital, Jump Capital, BlockFi is a financial services company focused on building Gaingels, Galaxy Digital, Bracket products for cryptocurrencies. BlockFi’s offerings include Capital, Susquehanna Government interest-earning accounts, low-cost USD loans secured by Products crypto, and zero-fee trading.

26 The most active fintech VCs from Q1’20 – Q1’21 By number of unique fintech company investments (new or follow-on)

Rank Investor Select fintech investments

*Sequoia includes its US, China, Israel, and India funds. 27 The most active fintech VCs from Q1’20 – Q1’21 By number of unique fintech company investments (new or follow-on)

Rank Investor Select fintech investments

28 Globally there are 94 FINTECH UNICORNS

Valued in aggregate at $377B

29 Q1’21 Fintech Sector Trends

30 WHAT THE STATE OF FINTECH COVERS

31 WHAT THE STATE OF FINTECH COVERS

32 PAYMENTS Funding tripled as deal activity grew 50% QoQ Global VC-backed payments financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count $8,000 114 120 99 88 93 100 $6,000 76 80

$4,000 60

40 $2,000 20 $3,601 $3,158 $3,614 $2,094 $6,028 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021 33 European payments startups saw multiple mega-rounds at increased valuations Total Deal date // disclosed Latest Previous Company HQ amount raised funding valuation valuation Select investors Description

Klarna is a BNPL provider that offers installment Sweden Mar ’21 // $1B $2.8B $31B $10.7B Wallenstam lending & POS financing.

Insight Partners, Tiger Global Management, Jan ’21 // DST Global, GIC, Greenoaks Capital UK $830M $15B $5.5B Checkout.com is a global payments processor. $450M Management, Endeavor, Coatue Management, Blossom Capital

Spark Capital, Tiger Global Management, Jan ’21 // General Catalyst, Entrée Capital, Target Rapyd offers a B2B payment service for local UK $475M $2.5B $1.2B $300M Global, Coatue Management, Oak HC/FT and cross-border commerce. Partners, Tal Capital

Mar ‘21 // JPM, Eldridge, Wellington Management, PPRO provides infrastructure to help clients UK $370M $1B $239M $270M Eurazeo, Sprints Capital Management accept global payments from consumers.

34 Payment platforms offer credit cards, salary advances, & transit solutions to employees

Q1’21 Funding: $25.5M Series A - II Q1’21 Funding: $3M seed Q1’21 Funding: $1.8M seed Select Investors: Valar Ventures, Select Investors: Target Global, Wamda Select Investors: Plug and Play Global Founders Capital, Cherry Capital, Arzan Venture Capital, Ventures, Aster Capital, WaterStart Ventures VentureSouq, Nuwa Capital, NBD Sana Capital Capital, JIMCO, Sukna Ventures Focus: Moss provides corporate credit Focus: Betterment offers a B2B cards for employees. The company Focus: FlexxPay offers an online payroll and employee management allows businesses to control employee platform for employers that helps platform. Employees can access spending and automate accounting employees access earned salaries and mobility and transportation solutions and receipt management. commissions before regular paydays. through a physical or virtual payment card.

35 Early-stage payment players help facilitate cross- border payments in emerging markets

Q1’21 Funding: Undisclosed amount, seed Q1’21 Funding: $0.12M seed Select Investors: HBCC Technology Select Investors: Techstars Investment, IMO Ventures, Molecular Group, Focus: New York-based Dash is an alternative Asia Phoenix Investments, Yinxiang Capital cross-currency mobile payment network for Focus: Hong Kong-Shenzhen-based consumers and businesses based in Africa. KoiPayment is a cross-border mobile payments aggregation platform for Chinese tourists.

36 E-commerce giants expand further into payments

Source: CB Insights — mentions in Amazon and Shopify earnings calls of “payments” or “payment.” 37 WHAT THE STATE OF FINTECH COVERS

38 BANKING Funding has risen for 2 consecutive quarters Global VC-backed banking financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count

$4,000 74 80 65 65 61 $3,000 54 60

$2,000 40

$1,000 20

$1,946 $2,304 $2,215 $2,623 $3,271 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021

39 Incumbent banks have rolled out responses to digital challengers…

Earnings Calls Mentions

HSBC UK Launches SME Mobile First Banking Service HSBC Kinetic March 24, 2021 |

Source: CB Insights — mentions in earnings calls of “challenger bank” or “neobank” or “digital bank.” 40 …while challenger bank services hit milestones

Public markets via SPAC Crossed $1B valuation Notable acquisition

Jan 7, 2021 — SoFi agreed to a reverse merger with Social Capital Hedosophia Holdings V in a deal valued at $8.65B. SoFi also acquired community bank Golden Pacific Mar 8, 2021 — Starling Bank raised Mar 4, 2021 — Square announced it Bancorp for $22.3M in early March. $376M led by Fidelity Investments at would acquire majority ownership in a $1.5B valuation. The company now music streaming platform Tidal for boasts 2M users and 300K small $297M as it looks to empower business clients, accounting for 5% musicians economically. Square’s of the UK’s small business banking industrial loan charter was conditionally approved on March 18. Feb 12, 2021 — MoneyLion agreed to market. go public via SPAC merger with Fusion Acquisition in a deal valued at $2.9B.

41 Community-focused challenger banks emerge

Q1’21 Funding: $40M Series A Q1’21 Funding: $3.6M seed VC Q1’21 Funding: Undisclosed amount, seed Select Investors: Bank of America, PNC, Select Investors: iFly.vc, Amplify Select Investors: Fintech Venture Studio JPMorgan, Wells Fargo, Truist, FIS, Mastercard, Visa Focus: Pasadena-based Cheese is a digital Focus: West Hollywood, CA-based Daylight banking platform focused primarily on provides banking solutions for the LGBTQ Focus: Atlanta-based Greenwood focuses on serving the Asian-American community. It community, including mobile-first cards providing digital banking services to Black offers banking services in multiple using chosen names and community-specific and Latino customers. Announced in October languages. content. 2020, Greenwood has signed up over 500K members. 42 API-based banking software continues to mature amid demand for digital experiences

Q1’21 Funding: $300M Series C Q1’21 Funding: $135M Series D Q1’21 Funding: $53M Series C Select Investors: TPG Growth, CapitalG, Select Investors: TCV, Tiger Global, Arena Select Investors: Insight Partners Geodesic Capital, Greycroft, Canapi Ventures Holdings Growth: In the last year, Nymbus has helped Growth: MX has tripled its headcount over the Growth: Mambu reports 100% YoY growth launch 12 digital-only community bank brands. last 2 years and powers more than 2,000 and is active in 50 markets. The company Focus: Miami Beach-based Nymbus provides companies. supports nearly 7,000 banking products. digital banking solutions for community and Focus: Utah-based MX helps financial Focus: Berlin-based Mambu is a SaaS regional bank clients. institutions analyze and enhance financial data banking platform that powers lending, to reduce fraud, approve loans, and help users deposit, and other banking products via APIs. save and invest.

43 WHAT THE STATE OF FINTECH COVERS

44 DIGITAL LENDING Deals and dollars rebounded Global VC-backed lending financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count

120 $4,000 102 100

$3,000 65 80 61 54 52 60 $2,000 40 $1,000 20 $978 $1,731 $1,731 $1,311 $3,973 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021 45 The UK tightens regulation around BNPL and interest-free installment lending

Source: CB Insights — news mentions of “BNPL” or “buy now pay later.” 46 BNPL funding emerges across different regions BNPL deals by deal size ($M), Q1’21 Deal date // Total disclosed Company HQ latest round ($M) funding ($M) Select investors Description

Ithaca Investment, Fasanara Capital, Scalapay offers a platform for buy now, pay later Italy Jan ’21 // $48M seed $48B Baleen Capital (BNPL) services and related features.

Butter is a BNPL provider for the travel industry, UK Mar ’21 // $21.7M seed $21.7M BCI Finance targeting costs such as flights or hotels.

Velocity Capital Fintech Ventures, Czech Twisto provides a deferred payment option for online Jan ’21 // $19.5M Series A $41M Finch Capital, Elevator Ventures, ING Republic and offline shoppers. Bank

Vision Ventures, Hala Ventures, Saudi Tamara provides a BNPL solution that enables Jan ’21 // $6M seed $6M Kwarismi Ventures, Impact 46, Nama Arabia customers to defer payments up to 30 days. Ventures, Wealth Well

India Jan ’21 // $2.5M seed $5.7M Pravega Ventures ePaylater provides BNPL services.

Mar ’21 // Motito is a BNPL platform which provides interest- Ghana N/A Pan-African Fintech Accelerator Incubator/Accelerator free credit at point-of-sale.

47 India-based lending marketplaces raise funding to improve credit access

Q1’21 Funding: $4.1M seed Q1’21 Funding: $5.1M Series C Q1’21 Funding: $0.04M seed Select Investors: Quona Capital, Ankur Select Investors: DSG Consumer Partners, Select Investors: Financial Inclusion Lab Capital, Binny Bansal ACPI Investment Managers Focus: Credochain is a lending Focus: Rupifi is a SaaS-enabled lending Focus: IndiaLends uses algorithms to marketplace that enables cash flow- marketplace for small businesses. The connect borrowers with financial based loans for small businesses. The startup offers connections to lenders institutions while also providing data platform also offers data-driven credit through API integrations. analytics and risk scoring services. advisory services.

48 WHAT THE STATE OF FINTECH COVERS

49 WEALTH MANAGEMENT Robinhood raised ~60% of total funding in Q1’21 Global VC-backed wealth tech financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count $6,000 100

81 $5,000 80 66 $4,000 64 $3,400 60 45 $3,000 43 40 $2,000 $600 $660 $1,000 20 $509 $1,007 $1,066 $823 $2,034 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021

50 ESG-focused investments are top of mind

An ESG Reckoning Is Coming Mar 4, 2021 |

Source: CB Insights — news mentions of “ESG” or “environmental, social, and governance.” 51 Rival retail investing platforms announced plans to go public

Focus: California-based Robinhood allows users to invest in US Focus: London-based eToro offers a digital platform that enables stocks and ETFs commission-free, and offers Robinhood Gold, a users to invest commission-free in 2000+ assets, including paid service for active investors to access margin and extended stocks, commodities, and crypto. hours trading. Exit Type: SPAC merger with Fintech Acquisition V Exit Type: IPO (S-1 filed confidentially) Valuation: $10.4B Valuation: $40B Last Funding Round: $650M PIPE (3/16/2021) Last Funding Round: $2.4B convertible note (2/1/2021) Select Investors: SoftBank Group, Fidelity Investments, Spark Select Investors: Sequoia Capital, Andreessen Horowitz, Ribbit Capital, Silicon Valley Bank, BRM Group, Aglae Ventures, Cubit Capital, New Enterprise Associates, DST Global, Index Ventures Investments

52 Digital investment platforms raised new funding rounds amid global stock trading surge

Q1’21 Funding: $125M Series G Q1’21 Funding: $220M Series D Q1’21 Funding: $150M Series D Q1’21 Funding: $69M Series B HQ: New York, US HQ: New York, US HQ: Hunan, China HQ: London, UK Select Investors: Goodwater Select Investors: Greycroft, Select Investors: Bojiang Capital, Select Investors: Crowdcube, Capital, Valar Ventures, Breyer Accel, Dreamers Fund, Aglae Divine Capital, Hongdao Capital, Draper Esprit, Octopus Labs, Capital, Union Square Ventures, Ventures, Tiger Global, Inspired Gopher Asset Management Left Lane Capital T. Rowe Price Capital Focus: WeBull offers a stock Focus: Freetrade offers Focus: Stash allows people to Focus: Public is a commission- trading platform for individual commission-free trading and invest small sums to help build free brokerage app. investors. connects users with a network financial habits over the long of financial advisers. term.

53 Southeast Asia sees boost in wealth tech funding Q1’21 Funding Funding Company Description ($M) Stage Country Select investors Y Combinator, SoftBank Ventures Ajaib is an online wealth management solution $25M Series A Indonesia Asia, Ribbit Capital, ICONIQ that gives users personalized advice. $65M Series A - II Capital

Bibit is a robo-advisor app that offers Sequoia Capital, 500 Startups, automated investing and portfolio $30M Series A Indonesia East Ventures, AC Ventures, EV management to individuals. Growth

Pluang provides micro-savings accounts and Go Ventures, OpenSpace $20M Series A-II Indonesia offers a gold investment product. Ventures

FUNDtastic is a wealth management platform Ascent Capital Partners, Indivara that provides financial advice and allows users $7.7M Series A-II Indonesia Group to invest in mutual funds and gold.

Robowealth provides robo-advisory services to individuals and offers advice on mutual fund N/A Series A Thailand Beacon Venture Capital investments.

54 WHAT THE STATE OF FINTECH COVERS

55 INSURANCE Funding rose 12% in the quarter while deal activity dipped Global VC-backed insurance financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count

$3,000 120 97 89 92 100 $2,000 75 78 80 60 $1,000 40 20 $1,353 $1,613 $2,239 $2,056 $2,302 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021 56 Mega-rounds made up nearly half of insurtech funding Funding amount ($M)

Mega-rounds made up 45% of insurtech funding in Q1’21

57 High-profile insurance losses highlight need for tech-enabled claims handling

Who Will Pay for the Freeze and Subsequent Meltdown in Texas?

March 16, 2021 |

Source: CB Insights — news mentions of “insurance claims” and “technology.” 58 Cyber insurance startups raise across deal stages

Q1’21 Funding: $175M Series D Q1’21 Funding: $100M Series C Q1’21 Funding: $20.3M Series A Select Investors: Index Ventures, Select Investors: Insight Partners, .406 Select Investors: Brewer Lane General Atlantic Ventures, Telstra Ventures Ventures, Markel, Pivot Investment Partners Focus: Coalition is a San Francisco- Focus: Corvus is a Boston-based cyber based cyber insurance startup that insurance startup focused on helping Focus: Cowbell Cyber is a Pleasanton, provides cyber insurance and insurance brokers find cyber insurance CA-based startup that provides cyber cybersecurity tools to small- and products for their customers. insurance for small- and medium-sized medium-sized businesses. businesses.

59 Real estate tech creeps further into home insurance products

Porch acquires insurer Homeowners of America Nationwide launches home repair service Porch, a home improvement network for homeowners and Nationwide, the eighth largest US homeowners insurance home professionals, acquired Homeowners of America for provider, launched a telemaintenance service for $100M in January. Homeowners of America is a licensed homeowners in January. Starting in Atlanta, homeowners insurance company and is the twelfth largest homeowners will be able to get on-demand consultations and insurer in Texas. schedule next-day repairs. A Nationwide policy is not necessary to subscribe to the service. Porch currently acts as an insurance agent, allowing users to compare quotes from various insurers. Its acquisition of Home insurance startup Hippo, which went public via Homeowners of America, however, will enable it to offer its SPAC in March, began offering a similar telemaintenance own policies and potentially capture more revenue from its service after it acquired Sheltr in 2019. users.

60 WHAT THE STATE OF FINTECH COVERS

61 CAPITAL MARKETS Funding more than tripled in Q1’21 Global VC-backed capital markets financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count $10,000 100 89 81 78 $8,000 80 66 58 $6,000 60

$4,000 40

$2,000 20 $1,701 $2,309 $2,029 $2,308 $8,067 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021

62 Momentum grows for automating capital markets processes

Source: CB Insights — news mentions of “automation” and “capital markets.” 63 New data analytics tech targets investment research workflows

Q1’21 Funding: $150M private equity Q1’21 Funding: $9.4M Series A Q1’21 Funding: $9M Series B Select Investors: ICONIQ Capital Select Investors: Undisclosed Investors Select Investors: NewAlpha, The Carlyle Group Focus: Chicago-based Enfusion provides Focus: London-based Tradeteq is a provider of a Focus: France-based SESAMm develops stock SaaS-based investment management collaborative network for trade finance investors market forecasting tools based on social media technology. The company offers software, and originators. The company offers analytics, and other textual data sources for banks and managed services, and analytics to reporting, investment, and operational solutions. hedge funds. investment managers and hedge funds.

64 Crypto trading companies offer institutional- grade products

Q1’21 Funding: $133M Series C Q1’21 Funding: $20M Series B Select Investors: Stripes Group, BNY Mellon, Galaxy Digita Select Investors: Kenetic Capital, DeFi Alliance, Rockaway Focus: New York-based Fireblocks offers a platform to store, Blockchain, Lightspeed Venture Partners transfer, and issue digital assets. Focus: London-based Wintermute Trading operates a ”market making” platform that provides liquidity for crypto trading.

65 WHAT THE STATE OF FINTECH COVERS

66 SMB Deals declined though funding increased 150% Global VC-backed SMB financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count $4,000 80 70 63 $3,000 56 60 50 44 $2,000 40

$1,000 20

$1,202 $2,829 $2,003 $1,324 $3,360 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021 67 Insurtechs look to improve the small- commercial insurance process

Q1’21 Funding: $250M Series E-II Q1’21 Funding: $118M Series C Select Investors: FinTLV Ventures, Battery Ventures, CapitalG Select Investors: Allianz X, Acrew Capital, Greycroft, SVB Capital Growth: Since its last funding round 6 months ago, Next Insurance has Growth: Pie Insurance reportedly saw revenues grow 150% since its made 2 acquisitions (Juniper Labs and AP Intego) and doubled its last funding round in May 2020. The company’s employee count also gross written premium. With this latest funding, the company doubled grew to 260 from 140 during the same period. Pie now has over its valuation to $4B. 1,000 partner agencies around the US and boasts over $100M in Focus: Palo Alto, CA-based Next Insurance focuses on digitizing and gross written premium since it started selling policies in March 2018. simplifying the process of obtaining small commercial insurance. Next Focus: Washington, DC-based Pie Insurance focuses on providing provides small businesses coverage tailored to a business’s specific small businesses access to workers compensation coverage. needs.

68 Automated tax compliance for freelancers sees strong demand in Europe

Q1’21 Funding: $42.5M Series B Q1’21 Funding: $29.6M Series B Q1’21 Funding: $2.3M seed Select Investors: Kerala Ventures, Singular Select Investors: Founders, Haufe Group Select Investors: Anthemis, Innovation Nest, Focus: France-based Indy, fka Georges, Focus: Berlin-based Kontist is a mobile business Spring Ventures aims to automate accounting for the self- bank that focuses on simplifying tax payments Focus: London-based Ember aims to automate employed to make it easier to file taxes. for freelancers by automatically calculating and tax and accounting processes for freelancers, setting aside income tax and value-added tax. contractors, and small business owners.

69 Startups use payroll data to improve user experience

Q1’21 Beta Product Launch: Plaid Deposit Switch Q1’21 Funding: $35M Series B Plaid’s latest product launch focuses on enabling users to more easily and quickly switch direct deposit accounts by connecting Select Investors: Stripe, Thrive Capital to payroll accounts via Plaid Link. Growth: Check has developed its payroll product with early customers Other startups offering deposit switch capability: that collectively represent 100K small businesses. The company announced a partnership with Stripe in February. Focus: New York-based Check is building infrastructure to connect payroll systems with software tools for business management. Check also handles tax filings and fund transfers to collectors. 70 Stripe Climate offers SMBs a way to automatically direct proceeds to carbon removal

Stripe Climate enables SMBs to contribute a portion of revenue to fund carbon removal • In February 2021, Stripe launched its Climate offering globally. The integration gives large companies, as well as SMBs, the ability to direct a portion of proceeds to 4 tech initiatives focused on climate issues. These projects range from energy capture and storage to carbon removal technologies. • More than 100 companies in Europe have signed up. • Substack, the newsletter platform, is an early user of Stripe Climate.

71 WHAT THE STATE OF FINTECH COVERS

72 REAL ESTATE Funding grew ~30% in Q1’21 as deal activity fell Global VC-backed real estate financing trends, Q1’20 – Q1’21

Funding amount ($M) Deal count $4,000 100

81 87 76 74 80 $3,000 74

$2,500 60 $2,000 40 $1,000 20 $1,058 $1,153 $1,005 $1,878 $2,419 $0 0 Q1 Q2 Q3 Q4 Q1 2020 2021

73 SPACs continue to fuel growth in the real estate technology industry

Fintech and proptech-focused SPAC SilverSPAC files for a $250 million IPO

Feb 16, 2021 |

Source: CB Insights — news mentions of “SPAC” and “proptech.” 74 Several real estate tech companies announced exits via SPAC mergers

Matterport will merge with the Offerpad will merge with Latch will merge with TS Doma (formerly known as States blank-check company Gores Supernova Partners Acquisition Innovation Acquisitions in a deal Title), will merge with Capitol Holdings IV in a deal that values Company in a deal that values the that values the company at almost Investment V in a deal that values the company at $2.3B. company at $3B. $1.6B. the company at $3B. Matterport is a spatial data firm Offerpad is an online platform that Latch offers building management Doma offers a machine learning that makes software for virtual aims to be a one-stop-shop for software that allows landlords and technology that speeds up the property tours. users to buy or sell properties, residents to manage deliveries, mortgage, closing, titling, and including title and mortgage locks, lighting, thermostats, and escrow processes. services. more. 75 Companies offering alternative paths to homeownership raised new rounds in Q1’21

Q1’21 Funding: $425M Series D Q1’21 Funding: $187.6M debt, $59.6M Q1’21 Funding: $110M Series C Select Investors: Vulcan Capital, Series C Select Investors: Tiger Global Andreessen Horowitz, Fifth Wall Select Investors: Goldman Sachs, Picus Management, GGV Capital, Andreessen Ventures, QED Investors, Monashees+ Capital, 360 Capital Partners Horowitz Focus: Brazil-based Loft is a digital Focus: Italy-based Casavo is an iBuyer Focus: California-based Divvy Homes platform that provides instant offers to that purchases homes from sellers to operates a tech-enabled homeownership sellers and helps buyers find available later renovate and put the properties back platform that allows renters to build properties. on the market. equity credits as they rent.

76 Appendix

77 View Our Fintech Wealth Management Fintech Expert Collections Payments Insurance

Banking Capital Markets

Digital Lending SMB

Real Estate

78 Get All The Fintech Wealth Management Data Used In This Report Payments Insurance

Banking Capital Markets

Digital Lending SMB

Real Estate

79 Methodology CB Insights encourages you to review the methodology and definitions employed to better understand the numbers presented in this report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if you feel your firm has been under-represented, please send an email to [email protected] and we can work together to ensure your firm’s investment data is up to date. What is included: What is excluded: ― Equity financings into emerging fintech companies. Fundings must be put into VC-backed — No contingent funding. If a company receives a commitment for $20M subject to hitting companies, which are defined as companies that have received funding at any point from certain milestones but first gets $8M, only the $8M is included in our data. venture capital firms, corporate venture groups, or super angel investors. — No business development/R&D arrangements, whether transferable into equity now, later, or ― Fundings of only private companies. Funding rounds raised by public companies of any never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity kind on any exchange (including Pink Sheets) are excluded from our numbers, even if they financing, nor is it from a venture capital firm. As a result, it is not included. received investment by a venture firm. — No buyouts, consolidations, and/or recapitalizations. All three of these transaction types are ― Only includes the investment made in the quarter for tranched investments. If a company commonly employed by private equity firms and are tracked by CB Insights. However, they are does a second closing of its Series B round for $5M and previously had closed $2M in a excluded for the purposes of this report. prior quarter, only the $5M is reflected in our results. — No private placements. These investments, also known as PIPEs (Private Investment in Public ― Round numbers reflect what has closed — not what is intended. If a company indicates Equities), are excluded even if made by a venture capital firm(s). the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount — No debt/loans of any kind (except convertible notes). Venture debt or any kind of debt/loan which has closed. issued to emerging startup companies, even if included as an additional part of an equity ― Only verifiable fundings are included. Fundings are verified via various federal and state financing, is not included. If a company receives $3M with $2M from venture investors and regulatory filings, direct confirmation with firms or investors, or press releases. $1M in debt, only the $2M is included. ― Previous quarterly VC reports issued by CB Insights have exclusively included VC-backed — No government funding. Grants, loans, or equity financings by the federal government, state rounds. In this report, any rounds raised by VC-backed companies are included, with the agencies, or public-private partnerships to emerging startup companies are not included. exceptions listed.