Fintech Decoded a Special Edition Report Tracking Investment Activity in Fintech Companies 2020 CONTENTS

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Fintech Decoded A special edition report tracking investment activity in fintech companies 2020 CONTENTS

01 GLOBAL – Fintech sector registers record number of deals in 2020; overall funding contracts – VC investors bullish on fintech: 2020 best year for VC funding – Consistent increase in late-stage funding; angel funding at all-time high 02 AMERICAS – North American fintech space witnesses new capital investment records in 2020 – Payments remains most attractive sector – Increased retail trading during pandemic attracts investor dollars for Financial Markets focused fintech companies 03 EUROPE – Fintech funding in Europe continues fast growth trajectory in 2020 – Explosive growth continues in angel/seed and late-stage funding – Payments remain most promising vertical in Europe; previous highs surpass in 2020 04 ASIA – 2020: VC funding in Asia fails to catch up to previous levels – Despite a slowdown in capital invested, 2020 deal volumes for Payments and Busines Solutions surpass last three-year numbers Executive Summary

Mirroring 2019’s trend, VC deal activity in the fintech space continued in an upward trajectory in terms of Welcome to the fifth edition of Aranca’s both volume and value, with $33.8B being invested in 1,506 deals globally. VC investors did not resist Fintech Decoded report, a publication pouring money in this space despite an unprecedented crisis that was expected to shake investor where we highlight the major VC funding confidence. trends of 2020 within the broader fintech The Payments segment continues to receive the major share of investments in the fintech space, further universe across key markets. accentuated by the recent changes in consumer trends. Additionally, many payment companies are transitioning to provide full-blown financial services, increasing their user base and revenue. The VC fintech funding reached new highs in Payments segment also accounted for the highest number of big-ticket deals with about 35 mega deals 2020, despite the funding freeze that (>$100M) from the 75 mega deals in 2020. For instance, this funding frenzy enabled Klarna, a Swedish market participants anticipated due to the payments company, to become Europe’s biggest VC-funded fintech unicorn, which is valued at $10.7B. pandemic outbreak. Mega deals are on the rise as established companies with proven Another segment that benefitted from the funding traction was Financial Markets. With the increase in retail and institutional investment and trading in the current volatile markets, companies such as unit economics and growth plans attract Robinhood with 13 million+ users bagged significant investor funding. investor attention. In this report, we highlight some trends, based on deal Despite numerous lockdowns and uncertainty affecting businesses, North America and Europe exceeded activity in 2020 and the outlook for various expectations and outperformed in terms of total fintech funding in 2020 by breaking previous annual records. On the other hand, the Asian fintech space failed to pick up pace to exceed last year’s invested fintech verticals. capital. We hope you find this an interesting and Many fintech companies are focused on responding to the current uncertainty by implementing cost- insightful read. effective measures. Their ability to swiftly and innovatively leverage their unique technology platforms will be crucial at this time; these efforts will be reflected in the upcoming quarters. Fintech 1,654 deals across $90.7B clocked globally companies fintech in investment In 2020, Fintech sector registers record number of deals in 2020; overall funding contracts

Global VC, PE, MA deal landscape in fintech companies January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified The Fintech sector stood resilient and

160.0 1,650 1,800 strong in 2020, registering a 28% jump in 1,568 1,654 deal volume in the challenging year. 1,600 140.0 1,290 1,442 1,414 14.0 However, this jump in deal activity was

1,400 120.0 accompanied by a 33% decline in deal 1,153 1,200 value, a clear indication that even thriving

100.0 42.5 sectors such as Fintech, which have been

1,000

80.0 14.3 at the forefront of enabling ease of life, 800 could not completely escape the heat of

60.0 125.8

600 the pandemic. 94.1 92.7

40.0 75.7 70.0 76.4 400 Majority of funding contraction was seen in 56.8 the M&A space as corporations faced 20.0

200 budget cuts for strategic acquistions.

- - However, the Fintech VC funding space 2014 2015 2016 2017 2018 2019 2020 registered another record-setting year. Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

Ant Financial ($B) Worldpay ($B) HengFeng Bank ($B)

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. Fintech 1,506 deals across $33.8B clocked globally companies fintech in funding VC In 2020, VC investors bullish on fintech: 2020 best year for VC funding VC funding deal activity rose 30% both in Global VC funding in fintech companies terms of volume and value in 2020. After a January 01, 2014 – December 31, 2020 consistent increase in deal volume for four Currency in $, unless otherwise specified consecutive quarters, the deal activity sharply declined in 4Q-2020. 389 458 367 387 345 339 354 326 324 323 317 323 322 312 307 284 296 298 284 298 302 277 286 283 Consistent with the trends in the last two 260 253 246 232 14 years, the number of mega deals (>$100M) continued to rise. There were 75 9.0 10.6 8.7 8.5 6.6 8.2 7.0 7.0 7.2 4.6 4.4 4.5 5.1 4.3 6.1 5.8 5.9 5.0 4.9 6.1 2.1 2.1 1.6 3.0 2.7 2.9 3.1 3.2 mega deals in 2020 worth $18.0B, yet Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 again setting a record in 2020. 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Ant Financials Deal Count 2020 led to the establishment of a “new

6.1 normal.” Fintech firms from start-ups to 5.0 5.0 5.0 5.1 4.7 4.8 4.7 4.7 unicorns banked on this opportunity. Neo 4.3 3.5 3.4 3.2 3.0 banks and digital banks with complete 2.5 2.5 2.1 2.2 2.2 2.2 2.1 1.8 2.0 2.0 2.0 2.1 online presence, Payment companies 1.6 1.3 promoting cashless payments, and online brokerage and trading platforms Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 2019 2020 encouraging retail investors outperformed expectations. VC investors identified the Median Deal Size ($M) potential in these sectors and placed their

Data Source: Pitch Book, unless specified otherwise bets on such fintech firms. Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. Consistent increase in late-stage funding; angel funding at all-time high

Global VC funding in fintech companies January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Late-stage deal activity remains robust as Angel/Seed Early Stage VC Later Stage VC the number of mega deals (>$100M) 30.0 12.0 2.0

1.8 continue to rise. Excluding the Ant 25.0 10.0 1.6 Financial outlier deal in 2018, 2020 was a 1.4 20.0 8.0 14 1.2 record year in terms of value as well as

15.0 6.0 1.0 1.9 25.1 0.8 10.0 9.3 volume for late-stage VC funding. After a 1.5 10.0 4.0 8.0 0.6 7.6 1.2 1.1 6.8 16.1 1.0 1.0 5.5 steep fall in 2019, funding in the 0.4 12.3 5.0 11.6 11.8 0.8 2.0 9.5 3.1 0.2 4.9 angel/seed stage reached an all-time high

0.0 0.0 - 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 in 2020. Meanwhile, early-stage VC funding slowed down in 2020.

700 700 632 500 572 556 560 450 441 600 529 600 505 573 In light of the pandemic, this trend of 494 400 486 464 467

500 500 402 492 350 growth in late-stage funding suggests that 357 254 300 251 400 400 235

250 184 190 investors are either parking their money in

300 300 200 148

150 established and mature start-ups that have 200 200

100 100 100 a clear growth trajectory and profitability 50

0 0 0 plan in place or in innovative very early- 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 stage companies with promising disruptive Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 Ant Financial ($B) offerings. Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. Drastic fall in late-stage median deal size in 2020

Global VC funding median deal size: By funding stage Substantial increase in the volume January 01, 2014 – December 31, 2020 of small-ticket, late-stage deals Currency in $, unless otherwise specified (<$50M) leading to an overall decline in the average (median) investment value for 2020

20.6 20.0 21.0 16.3

14.4 14.0 13.0

7.0 7.3 6.0 4.5 4.5 4.0 4.3

1.5 1.5 1.7 0.7 1.0 1.0 1.3

2014 2015 2016 2017 2018 2019 2020 Angel/Seed Early Stage VC Later Stage VC

Global VC funding in fintech companies January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Both the Americas and Europe surpassed Americas Asia Europe

9.0 25.0 their previous 2019 highs, with a 29% and 25.0

8.0 52% jump in value, respectively, to witness

20.0 20.0 7.0

6.0 another year of record funding.

15.0 15.0

5.0 14.0 4.0 8.5 Both the American and European fintech

10.0 10.0

19.2 3.0 15.0 5.6 funding spree was driven by a massive 13.3 2.0

5.0 5.0 10.5 3.7 9.2 3.5 7.9 7.6 6.7 7.1 1.0 2.4 inflow of capital in the Payments+ 5.8 5.9 5.2 5.0 1.6 1.7

0.0 0.0 1.4 0.0 segment. This segment accounted for 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 about 27% and 55% of capital invested in 228 900 806 250 450 399 237 the Americas and Europe, respectively. 205 209 409 800 694 774 194 400 354 649 666 200 700 598 350 595 285 281 295 On the other hand, the Asian fintech space

600 141 300 247

150 500 109 250 remained flat in terms of deal value, while

400 200 100 deal volume saw an all-time high.

300 150

200 100 50

100 50

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 Ant Financial ($B)

Top 10 global VC funding deals in fintech January 01, 2020 – December 31, 2020 Deal Post-Money S. No. Region Name Verticals Key Investors Size ($M) Valuation ($B) 1 US Stripe Payments+ 850 Novator Partners, Plus Capital, Andreessen Horowitz, General Catalyst, GV, Sequoia Capital 36.0 Access Technology Ventures, Coatue Management, Dragoneer Investment Group, DST Global, 2 US Chime Payments+ 700 6.0 General Atlantic, ICONIQ Capital, Menlo Ventures Financial D1 Capital Partners, Founders Circle Capital, Redalpine Venture Partners, Sung Capital Partners, 3 US Robinhood 660 11.7 Markets 9Yards Capital, Andreessen Horowitz, DST Global, IVP, Ribbit Capital, Sequoia Capital Bonnier, GIC, Silver Lake Management, TCV, Black Rock, HMI Capital, Northzone Ventures, 4 Sweden Klarna Payments+ 650 10.7 Merian Chrysalis Investment Financial 10X Capital, IVP, Pegasus Tech Ventures, TSG Consumer, Unusual Ventures, 9Yards Capital, 5 US Robinhood 600 8.7 Markets New Enterprise Associate, Ribbit Capital, Sequoia Capital AdTay Ventures, Bond Capital, Crux Capital, FG2 Capital, G Squared, GP Bullhound, Nyca 6 UK Revolut Payments+ 580 5.5 Partners, TCV, TSG Consumer, United First Partners Draper Esprit, FG2 Capital, GIC, Insight Partners, Vis Capital, Allianz X, Earlybird Venture Capital, 7 Germany N26 Payments+ 570 3.5 Greyhound Capital.

8 UK Revolut Payments+ 500 Bond Capital, GP Bullhound, TCV, Ribbit Capital. 5.5

9 US Bright Health Insurance 500 T. Rowe Price, The Blackstone Group, Tiger Global Management, New Enterprise Associates. -

10 US Affirm Lending 500 Durable Capital Partners, Fidelity Investments, Wellington Capital Management, Baillie Gifford. -

734 deals Fintech Fintech ecosystem – North America

Business Insurance Solutions Personal Finance Financial Markets Blockchain/ Crypto

Real Estate/ Lending Mortgage Fintech Payments+ Ecosystem RegTech North American fintech space witnesses new capital investment records in 2020

VC funding in fintech companies in North America January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified

20.0 900 Capital invested in the North American 734 674 fintech space grew 26% YoY in 2020. 18.0 771 800

16.0 2020 witnessed 43 mega VC funding deals 646 700 634 (>$100M), the highest ever, and an overall 14.0 582 576 600 increase in median deal size to $4.7M. The 12.0 trends indicate that neither the pandemic 500

10.0 nor the uncertainties associated with the

18.3 400

8.0 elections have any negative effects on the 14.5 300 fintech deal-making process.

6.0 12.7

9.2 200 Majority of the investor dollars have been 4.0 7.8 7.4 5.7 in the Payments+ segment, followed by 100

2.0 Financial Markets, Business Solutions, and 0.0 0 Insurance segments. 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

North America VC funding in fintech companies: By funding stage January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Angel/Seed Early Stage VC Later Stage VC

1.2 6.0 16.0

14.0

1.0 5.0

12.0

0.8 4.0

10.0

0.6 3.0 8.0 5.4 14.4 1.0 4.7 6.0 0.4 2.0

0.6 0.6 0.7 3.2 4.0 9.2 0.5 0.6 0.6 3.1 2.6 0.2 1.0 2.5 6.0 6.4 1.4 2.0 3.8 4.1 4.2

0.0 0.0 0.0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

315 323 250 350 293 308 350 274 289 277 232

300 300 256 236 200 214 250 255 250 184 195 247 133 141 150 121

200 112 200 105 107

150 150 100

100 100

50 50

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

North America VC funding median deal size: By funding stage January 01, 2014 – December 31, 2020 Substantial increase in volume of small-ticket, Currency in $, unless otherwise specified late-stage deals (<$50M) leading to an implied decline in average (median) value for 2020 24.4 21.1

20.5

17.0 15.0 14.1 15.7

9.0 8.6 7.0 6.0 5.3 6.0 3.5 1.7 0.8 1.3 1.1 1.5 1.5 1.5

2014 2015 2016 2017 2018 2019 2020 Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in fintech: North America January 01, 2020 – December 31, 2020 Deal Post-Money S. No. Region Name Verticals Key Investors Size ($M) Valuation ($B)

1 US Stripe Payments+ 850 Novator Partners, Plus Capital, Andreessen Horowitz, General Catalyst, GV, Sequoia 36.0

Access Technology Ventures, Coatue Management, Dragoneer Investment Group, DST 2 US Chime Payments+ 700 6.0 Global, General Atlantic, ICONIQ Capital, Menlo Ventures

D1 Capital, Founders Circle Capital, Redalpine Venture Partners, Sung Capital, 9Yards 3 US Robinhood Financial Markets 660 11.7 Capital, Andreessen Horowitz, DST Global, IVP, Ribbit Capital, Sequoia

10X Capital, IVP, Pegasus Tech Ventures, TSG Consumer, Unusual Ventures, 9Yards 4 US Robinhood Financial Markets 600 8.7 Capital, New Enterprise Associate, Ribbit Capital, Sequoia

5 US Bright Health Insurance 500 T.Rowe Price, Blackstone Group, Tiger Global Management, New Enterprise Associates -

6 US Affirm Lending 500 Durable Capital Partners, Fidelity Investments, Wellington Capital, Baillie Gifford - Tiger Global Management, Whale Rock Capital Management, Access Technology 7 US Chime Payments+ 485 14.5 Ventures, Coatue Management, Dragoneer Investment, DST Global, General Atlantic Pegasus Tech Ventures, Unusual Ventures, 9Yards Capital, New Enterprise Associates, 8 US Robinhood Financial Markets 430 8.4 Ribbit Capital, Sequoia Capital Alta Park Capital, Durable Capital Partners, Greenoaks Capital Partners, Light Street 9 US Toast POS Business Solutions 400 4.9 Capital Management, TPG Capital 9Yards Capital, Allianz X, Arbor Ventures, Cathay Innovation, GMO Internet Group, 10 US Fundbox Lending 350 - Hamilton Lane, HarbourVest Partners, Healthcare of Ontario Pension Plan

The Payments+ segment in North America North America VC funding in fintech: Lending, Payments thrived yet again in 2020 as the world January 01, 2014 – December 31, 2020 embraced the “Cashless is King” Currency in $, unless otherwise specified Lending philosophy.

4.0 132

3.5 140 The Payments+ segment registered 11 112 111 107 3.0 120 103 97 mega deals (>$100M) amounting to $3.2B 2.5 100 96

2.0 80 in 2020, a 42% jump in deal value. 3.5 3.7 1.5 60

1.0 2.3 40 2.2 1.9 2.0 Payment companies were able to 1.4 20 0.5 drastically improve their user base,

0 0.0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 especially in the west, wherein the pandemic gave further boost to the already Payments widespread cashless payment adoption. 6.0

140 122 124 5.0 120 Additionally, these Payment firms are 114 110 120 102 118 4.0 expanding their scope of services to

100

3.0 80 become one-stop financial service

4.8 60 2.0 companies.

3.4 40

1.0 2.0 1.2 1.0 1.3 1.3 20 On the other hand, lending fintech firms did 0.0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 not gain much traction in North America in

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 2020 as consumer and business spending declined as well many fintech lending Data Source: Pitch Book, unless specified otherwise startups with a growth model dependent on Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. volume saw contractions in their business. Increased retail trading during pandemic attracts investor dollars for financial market-focused fintech companies

North America VC funding in fintech: RegTech, Financial Markets January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified RegTech Financial Markets

0.5 4.5

0.4 4.0

0.4 3.5

0.3 3.0

0.3 2.5

0.2 0.4 0.4 2.0 3.9

0.2 1.5

0.1 0.2 0.2 1.0 2.1 0.2 0.2 1.9 0.1 0.1 0.5 0.7 1.0 1.0 1.1

0.0 0.0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

40 34 160 137 122 35 140 117 113 26 108 104 131 30 23 25 120 25 19 100 17 22 20 80

15 60

10 40

5 20

0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

North America VC funding in fintech: Insurance, Business Solutions January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Insurance Business Solutions

3.5 3.0

3.0 2.5

2.5

2.0

1.5 1.5 3.1 2.5 1.0 2.1 1.0 2.0 1.7 1.8 1.7 0.5 1.3 1.2 0.5 1.2 0.3 0.7 1.1 0.7

0.0 0.0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

100 160

90 124 140 145 74 69 80 86 109 109 120 100 101 70 56 58 52 91 100 60

50 80

40 28 60

20 10

0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

409 deals Fintech Fintech ecosystem – Europe

Business Insurance Solutions Personal Finance Financial Markets Blockchain/ Crypto

Real Estate/ Lending Mortgage Fintech Payments+ Ecosystem RegTech Fintech funding in Europe continues fast growth trajectory in 2020

VC funding in fintech companies in Europe Despite multiple waves of the pandemic and January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified the related lockdowns, in 2020, European

9.0 409 450 fintech companies recorded the highest 399 funding in terms of value (up 52%) and

8.0 400 volume (up 39%) from 2019. 354 295

7.0 350 Payments companies' dominance in the 285 6.0 281 300 European fintech landscape is increasing 247 consistently; 14 of the 18 mega deals 5.0 250 (>$100M) in 2020 came from Payments. The 8.5 4.0 200 widespread adoption of digital payments and

3.0 150 banking solutions has been an evident trend 5.6 for over a year and is likely to continue in the

2.0 100 3.7 3.5 foreseeable future in Europe. 2.4 1.0 50 1.6 1.7 Additionally, the open banking and PSD2 0.0 0 regulatory frameworks demonstrate that the 2014 2015 2016 2017 2018 2019 2020 EU is working hard to promote fintech companies; regulatory support is a huge Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 positive factor for VCs to consider investing in this space. Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. Explosive growth continues in angel/seed and late-stage funding

Europe VC funding (no. of deals) in fintech companies: By funding stage January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Angel/Seed Early Stage VC Later Stage VC

0.6 2.0 7.0

1.8

6.0 0.5

1.6

5.0 1.4

0.4

1.2

4.0 0.3 1.0 1.9 3.0 6.4 0.5 0.8 1.7

0.2 1.5 0.4 0.6 1.3 2.0 0.3 1.1 3.5 0.4 0.1 0.2 0.8 0.2 0.7 1.0 2.1 0.1 0.1 0.2 0.8 1.1 0.5 1.6

- - - 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

167 190

180 120 151 200 110 180 160 138 152 140 100 121 160 140 140 131 159 118 140 69 80 120 95 99 58 86 120 55 100

60 100 80 35 80 27 29 40 60

40 40 20

20 20

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

Europe VC funding median deal size: By funding stage January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified

18.9

15.5

15.6 12.9

11.8

9.1 9.0

5.5 4.9 5.5 2.7 2.5 2.5 2.3 2.3 1.2 1.5 1.5 0.5 0.7 0.8

2014 2015 2016 2017 2018 2019 2020 Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in fintech: Europe January 01, 2020 – December 31, 2020 Deal Post-Money S. No. Region Name Verticals Key Investors Size ($M) Valuation ($B)

Bonnier, Government of Singapore Investment Corporation, Silver Lake Management, 1 Sweden Klarna Payments+ 650 10.7 TCV, Black Rock, HMI Capital, Northzone Ventures, Merian Chrysalis Investment

AdTay Ventures, Bond Capital, Crux Capital, FG2 Capital, G Squared, GP Bullhound, Nyca 2 UK Revolut Payments+ 580 5.5 Partners, TCV, TSG Consumer, United First Partners Draper Esprit, FG2 Capital, Government of Singapore Investment Corporation, Insight 3 Germany N26 Payments+ 570 3.5 Partners, Vis Capital, Allianz X, Earlybird Venture Capital, Greyhound Capital

4 UK Revolut Payments+ 500 Bond Capital, GP Bullhound, TCV, Ribbit Capital 5.5

Avid Ventures, Coatue Management, Durable Capital Partners, Entrée Capital, FJ Labs, 5 UK Rapyd Payments+ 300 2.5 General Catalyst, Latitude Investments, Oak, Spark Capital, Tal Capital, Tiger Global

6 Sweden Klarna Payments+ 200 Commonwealth Bank of Australia 5.4

Accel, Deliveroo, General Catalyst, Goodwater Capital, Kaiser Investments, Novator Personal 7 UK Monzo 166 Partners, Orange Ventures, Passion Capital, Reference Capital, Stripe, TED, Thrive Capital, 1.6 Finance Vanderbilt University, Y Combinator Blossom Capital, Coatue Management, DST Global, Government of Singapore Investment 8 UK Checkout.com Payments+ 150 5.5 Corporation, Insight Partners Accel, Founders Future, Hedosophia, NewAlpha Asset Management, Open CNP, Siparex 9 France Lydia Solutions Payments+ 131 - XAnge Venture, Tencent Holdings 10 UK Starling Bank Payments+ 124 Harald McPike, JTC, Merian Chrysalis Investment, Merian Global Investors -

Europe VC funding in fintech: Lending, Insurance, Business Solutions January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Business Solutions Insurance Lending

1.2 0.7 1.6

1.4 0.6 1.0

1.2

0.5

0.8

1.0

0.4

0.6 0.8 1.1 0.3 0.6 1.4 0.6

0.4 0.2 0.5 1.0 0.6 0.4 0.4 0.4 0.9

0.2 0.1 0.5 0.4 0.2 0.5 0.5 0.1 0.1 0.2 0.3 0.0 0.0 0.1 0.3

- - - 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

45 75 80 90 50 66 64 82 45 62 80 36 70

40 70 39 60

50 50 35 29 46 44 60

50 40 30 50 39 21 43 35 40 25

40 16

20 20 30 30 11

20 10

10 10 5

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

Europe VC funding in fintech: Financial Markets, Payments January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Financial Markets Payments

0.6 5.0

4.5

0.5

4.0

3.5

0.4

3.0 0.3 2.5 4.7 0.5 0.5 2.0 0.2 0.4 0.4 1.5

1.0 2.4 0.1 0.2 0.2 0.2 0.5 0.8 0.6 0.4 1.2 0.9

- 0.0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

66 70 60 100 95 55 90 75 60 50 69 72 55 80 63 67 50 38 38 70 51 60

30 40

30 20

0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020

237 deals Fintech Fintech ecosystem – Asia

Business Insurance Solutions Personal Finance Financial Markets Blockchain/ Crypto

Real Estate/ Lending Mortgage Fintech Payments+ Ecosystem RegTech 2020: VC funding in Asia fails to catch up to previous levels

VC funding in fintech companies in Asia January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified

25.0 250 Fintech segment in Asia witnessed another 228 237 year of suboptimal capital investment from 205 209 194 VC investors. On the other hand, the deal 20.0 200 volume increased significantly, driven by a jump in angel deals. Overall, the median 141 15.0 150 deal declined to $7.1M from $8.5M in 2019, after increasing for four consecutive 109 14.0 years.

10.0 100 Asian fintech funding’s sluggish performance was primarily driven by a

5.0 10.5 50 relatively poor performance in the Chinese 6.7 7.1 5.9 5.2 5.0 fintech space, which accounted for 29% of 1.4 - - Asian fintech funding in 2020. 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 Ant Financial ($B)

Asia VC funding (no. of deals) in fintech companies: By funding stage January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Angel/Seed Early Stage VC Later Stage VC

0.7 4.5 8.0

4.0 7.0 0.6

3.5

6.0

0.5

3.0

5.0

0.4 2.5

4.0

2.0 0.3 0.6 3.9 3.7 3.0 6.7

1.5 0.2 4.8 2.0 1.0 2.3 0.3 1.7 2.1 3.3 0.1 3.0 3.0 2.9 1.5 1.0 0.2 0.2 0.2 0.1 0.1 0.5 0.9 0.3

- - - 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

70 100 86 140 118

90 64

60 71 120 97 118 49 80 95 61 88 42 85 50 100 70 57 37 35 60 40 44 55 80 31 50 53

30 60 40 25

30 12 20 40

10 20

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested YTD 2020 ($B) Deal Count Deal Count YTD Ant Financial ($B) 2020

Asia VC funding median deal size: By funding stage January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Surge in no. of big-ticket, late-stage deals (>$100M)

40.0

31.6 25.0

20.5 19.0 20.8

11.5

10.0 10.0 8.5 7.5 7.4 5.0 5.7 2.1 0.7 1.0 1.0 1.0 1.3 1.4

2014 2015 2016 2017 2018 2019 2020 Angel/Seed Early Stage VC Later Stage VC

Top 10 VC funding deals in fintech in Asia January 01, 2020 – December 31, 2020

Deal Post-Money S. No. Region Name Verticals Key Investors Size ($M) Valuation ($B) Navi Anand Rao, Anirban Mukherjee, Kaushik Madhavan, MS Gopalakrishnan, Narayanan 1 India Lending 398 - Technologies Venkitaman, Paresh Suthankar, Samit Shetty, Samuel Sunil Edwards, Shweta Mani. Goldman Sachs Growth, JS Capital Management, PayPal Ventures, Soros Capital, 2 Japan Paidy Payments+ 251 - Tybourne Capital Management, Unusual Ventures, Visa Ventures.

3 China JD Digits Lending 251 JD.com. -

4 China Shuidi Insurance 230 DL Capitals, IDG Capital, Swiss Re Group, Tencent Holding. 2.0

FJ Labs, G Squared, Altos Ventures, Aspex Management, Goodwater Capital, Greyhound 5 South Korea Toss Payments+ 174 2.6 Capital, Kleiner Perkins, Sequoia Capital China.

6 Indonesia Gojek Payments+ 150 Telkomsel -

7 China Shuidi Insurance 150 Tencent Holdings -

8 Indonesia LinkAja Payments+ 100 BRI Ventures, Grab, Mandiri Capital Indonesia, Telkomsel -

Affirma Capital, Goldman Sachs Merchant Banking Division, Goodwater Capital, Kora 9 Vietnam Momo Payments+ 100 - Management, Macquarie Private Capital, Tybourne Capital Management, Warburg Pincus Yunzhangfang Business 10 China 85 Vitruvian Partners - .com Solutions

Data Source: Pitch Book, unless specified otherwise Note: Please refer to the Methodology section at the end of the report to understand the fintech universe and its constituents as defined from the perspective of this report. Despite a slowdown in capital invested, 2020 deal volumes for Payments and Business Solutions surpass last three-year numbers

Asia VC funding in fintech: Diverse verticals January 01, 2014 – December 31, 2020 Currency in $, unless otherwise specified Business Solutions Payments Lending

16.0 3.0 4.0

14.0 3.5

2.5

12.0 3.0

2.0

10.0 2.5

8.0 14 1.5 2.0 2.6 3.4 6.0 2.3 1.5 1.0 1.8 4.0 1.7 1.0 1.3 2.1 1.8 0.5 1.2 2.0 5.1 0.5 1.3 0.8 0.6 0.1 0.9 1.0 1.1 0.1 2.0 2.5 0.6 0.0 - - 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

90 45 70 78

40 40 52 62 80 66 69 60 60 70 35

50 40 41 60 30 24 23 23 22 33 40 25 50 35 39 49 24 25 15 40 20 30

30 15 8 20

10 20

5 10

0 0 0 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

Capital Invested ($B) Capital Invested 2020 ($B) Deal Count Deal Count 2020 Ant Financial ($B)

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

Categorization of Deal Type For the purposes this report, we focus on fintech deals primarily of three types as per Pitchbook classification: venture capital (VC), private equity (PE), and mergers and acquisitions (M&As). All others deal types classifications including, but not limited, to secondary transaction, accelerator/incubator, debt-financed, joint venture (JV), publicly listed, and others were not included in this report.

Venture Capital For the purpose of this report, we observed the Deal Type and Deal Universe reported by Pitchbook for each deal. Based on Aranca’s analysis, the deals tagged as early-stage VC, late-stage VC, angel (individual), restart-angel, seed round and corporate were classified as VC deals.

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

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

Important Note: Based on the dynamic nature of the industry and companies operating in the Fintech space, we have re-classified some of the companies (and their corresponding deal activity) in this edition of the report Glossary

Fintech Financial Technology

2H-2020 Second Half of 2020

4Q-2020 Fourth Quarter of 2020

VC Venture Capital

PE Private Equity

M&A Merger and Acquisitions

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Ashish Rane Kinjal Shah Associate Director, Valuations and Financial Advisory Analyst, Valuations and Financial Advisory Email: [email protected] Email: [email protected] Ph: +91 22 3937 9999 Ext. 390 Ph: +91 22 3937 9999 LinkedIn Profile LinkedIn Profile

Ashish has over 10 years of experience in Corporate Finance, Kinjal has over 2 years of experience working in Aranca’s Transaction Advisory and Business Valuation and has Valuations and Financial Advisory Practice. She has worked managed financial advisory engagements for over 300 on multiple valuation assignments for tax compliance, portfolio Venture Capital firms focused on investments within the monitoring, and transaction advisory purposes. She has also Technology domain. worked on advisory engagements across domains such as financial services, IT, and healthcare. Ashish holds an MBA from New York’s Stern School of Business and a Baccalaureate degree in Business and Kinjal has completed all three levels of the Chartered Financial Management Information Systems from Pennsylvania State Analyst (CFA) exam and holds a Bachelors in Financial University. Markets. Disclaimer

This document is for informational use only and may be outdated and/or no longer applicable. Nothing in this For any queries or assistance please reach out to Ashish Rane at [email protected] publication is intended to constitute legal, tax, or investment advice. There is no guarantee that any claims made will come to pass. The information contained herein has been For additional details, please visit: obtained from sources believed to be reliable, but Aranca does not warrant the accuracy of the information. Consult a https://www.aranca.com/ financial, tax or legal professional for specific information https://www.linkedin.com/company/aranca related to your own situation.