Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (Data Provided by Pitchbook), *As of 30 June 2021

Pulse of Fintech H1’21

August 2021 home.kpmg/fintechpulse Reaching new heights

2021 has seen an incredibly strong start to the year for — corporates embracing M&A as a means to attain KPMG Fintech professionals include the global fintech market. As you’ll see from this edition of important capabilities, broaden customer offerings, partners and staff in over 50 fintech hubs Pulse of Fintech, the rebound we saw in H2’20 continued and grow and scale around the world, working closely with into H1’21, with very robust investment across VC, PE, financial institutions, digital banks and and venture capital. We saw growing deal sizes in a wide — fintechs and large tech companies embracing platform fintech companies to help them and ‘super app’ models. understand the signals of change, identify variety of fintech subsectors — from wealthtech and the growth opportunities and develop and regtech to crypto and cybersecurity. If there was a word As vaccination levels rise around the world and execute their strategic plans. that could be used to describe H1’21, it would be: jurisdictions continue to emerge from the pandemic, diversity. Consider some of the key trends we’ve seen fintechs and incumbent financial institutions need to Ian Pollari so far this year: Global Co-Leader of Fintech, recognize how far they’ve come and look at how they can Partner and National Sector Leader, — growing recognition that the consumers’ digital keep building their momentum as they look to the future. Banking, KPMG Australia behaviors that accelerated due to the global pandemic Whether you’re the CEO of a large financial institution or are here to stay the founder of an emerging fintech, the road ahead is Anton Ruddenklau sure to be radically different from what you envisioned Global Co-Leader of Fintech, — increasing interest and larger deal sizes in a broad Partner and Head of Financial range of fintech subsectors, including wealthtech and just a year or 2 ago — and that’s likely a good thing. As Services Advisory, regtech you read this edition of Pulse of Fintech, ask yourself: KPMG in Singapore Recognizing how far we’ve come over the last 18 — growing interest in SPAC mergers, particularly in the months, what can we do now to make sure we keep US (e.g., SoFi, Clover Health, Payoneer, Metromile) moving forward successfully? All currency amounts are in US$ unless otherwise specified. Data provided by PitchBook unless otherwise specified. — rising interest in cryptocurrencies and blockchain — not only from startups and investors, but also from governments and regulators

Global Fintech insights segments — Global fintech — Payments investment — Insurtech analysis — Regtech (VC, PE, M&A) — Wealthtech — Top 10 deals — Fintech trends in — Blockchain/cryptocurrency 2021 04 13 — Cybersecurity

Regional Featured analysis interview — Americas — Jason Pau, 26 29 32 — EMEA Ant Group — ASPAC Spotlight article — Putting data at the heart of ESG decision-making Global insights Fintech segments | Featured interview | Spotlight article | Regional insights

Global fintech investments in H1 2021 recorded $98B with 2,456 deals

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Global fintech investment reaches $98 billion at mid-year Fintech investment continues to bounce back Record-setting corporate VC volume helping drive Global investment in fintech Global fintech investment continued its remarkable rebound in fintech surge has seen a quick V-shaped H1’21, rising from $87 billion in H2’20 to $98 billion in H1’21. There was $21 billion in corporate-affiliated VC investment in recovery from 2020 levels. Fintech deal volume hit a new record of 2,456 during H1’21. H1’21. CVC deal volume reached a high of 284 in Q1’21 and then Growing deal sizes, valuations A wealth of dry powder, COVID-related digital acceleration, an grew further to 312 in Q2’21. Corporates around the world are “ and successful exits for increasingly diverse range of fintech hubs and subsectors, and under pressure to increase the velocity of their digital proven players and proven robust activity in almost all regions of the world contributed to the transformation activities and to enhance their digital capabilities. thematics have driven this strong start to 2021. Over the last year, many have seen that it’s quicker to do so by result. Corporates are also partnering with, investing in or acquiring fintechs, particularly with Global VC investment of over $52 billion close to increasingly looking to seize respect to high demand skills. surpassing previous annual record new market opportunities or urgently address gaps by Global VC investment reached over $52 billion in H1’21 — very With $42.1 billion of investment, the US accounts for embracing partnering and close to the annual record of $54 billion seen in 2018. The largest nearly half of global total M&A to achieve their strategic VC rounds of H1’21 included US-based Wealthtech Robinhood The Americas accounted for $51.4 billion of fintech investment in objectives. ($3.4 billion), Brazil-based digital Nubank ($1.5 billion), Sweden- H1’21, with the US accounting for $42.1 billion. Investment in the based ‘buy now, pay later’ firm Klarna (two rounds totaling $1.9 EMEA region was also very robust at $39.1 billion. In the Asia-Pacific Ian Pollari billion), and Germany-based wealthtech Trade Republic ($900 Global Fintech Co-Leader, region, fintech investment rose considerably between H2’20 and Partner, National” Banking Leader, million). South Korea-based mobile financial app Toss raised $410 H1’21 — rising from $4.5 billion to $7.5 billion, although investment KPMG Australia million in Asia’s largest VC round of H1’21. remained suppressed compared to previous record highs.

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PE firms invest $5 billion in fintech in H1’21 Gojek announced a merger with marketplace Tokopedia — in part to Cryptocurrency and better compete with super apps such as Grab1 and mitigate any PE firms embraced the fintech space in H1’21, contributing $5 blockchain is exploding competitive threat from SEA Limited. billion in investment to fintech — surpassing the previous annual globally. There’s so much happening in the space right high of $4.7 billion seen in 2018. The largest PE deals were quite Big tech partnerships backing big fintech plays “ substantial, including the $800 million buyout of InvestCloud by now, between the eCNY Big techs have continued to move into the banking space to create Motive Partners and Clearlake Capital, Silverlake’s $800 million project running in China, an extended experience for their customers or to remove friction investment in Abu Dhabi-based Group 42 and the $600 million Facebook’s Diem, a number points in processes — primarily by forging partnerships with buyout of Ireland-based Fenergo by Astorg and Bridgepoint. of ecosystem initiatives — existing banks. Most recently, Google announced partnerships with not to mention all the Cross-border M&A more than doubles next to all of 2020 a number of banks and credit unions, including Citi, BBVA, Bank of different trading platforms Cross-border M&A deal value rose dramatically — from $10.3 Montreal, Stanford FCU and others in order to provide Google Plex raising money. Digital 2 billion in all of 2020 to $27.7 billion in H1’21 alone. Following a digital bank accounts integrated with Google Pay. currencies and virtual assets pandemic-driven slowdown in cross-border M&A, many are a big, big topic of Trends to watch for in H2’21 incumbents and mature fintechs embraced cross-border M&A as a conversation. I think for the means to gain critical mass at a regional or global level or to — growing consolidation, particularly in mature areas of fintech as rest of this year at least, expand services and capabilities. In H1’21, for example, the fintechs look to become the dominant market player either crypto will be a very hot ticket London Stock Exchange Group acquired data analytics firm regionally or globally. for investors. Refinitiv for $14.8 billion, while Nasdaq acquired Canadian cloud- — more interest in revenue-based financing solutions, banking-as- based fraud detection platform Verafin for $2.7 billion. Anton Ruddenklau a-service models, and B2B services. Global Fintech Co-Leader, Partner and Head of Financial Services — increasing regulatory scrutiny, particularly around ” Platform models and ‘super apps’ gain precedence Advisory, cryptocurrencies and virtual assets. KPMG in Singapore Large fintechs and platform companies have focused on building up their platform or ‘super app’ models, including embracing solutions — stronger focus on cybersecurity and areas like digital identity to such as embedded finance in order to provide a stronger ecosystem support other fintech offerings. of services. This is particularly true in Southeast Asia; in H1’21,

1 https://www.cnbc.com/2020/10/09/central-banks-lay-out-a-framework-for-digital-currencies.html

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Top fintech trends for 2021

During the first half of 2021, we saw interest in fintech grow to a fever pitch in most regions of the world. As we head into the second half of the year, this extraordinary momentum is expected to continue. Here are KPMG’s top predictions for fintech in H2’21.

Crypto will be a hot focus for investors Cybersecurity will likely gain even greater prominence H1’21 saw an explosion of activity in the blockchain and crypto Given the rise in digital transactions and the subsequent rise in 1. space. We’ll likely see this trend continue, with focus stretching 4. cyberattacks and ransomware, cybersecurity is a focus area for across the crypto ecosystem — from cryptocurrencies and trading investors, particularly corporates. In addition to threat security, platforms to NFTs, alternative asset trading, and support structures. fraud management, KYC, and passwordless security will gain The space will also see a more diverse range of investors increasing attention from investors. considering investments in the space. B2B services will gain attention across fintech M&A activity will continue to surge subsectors M&A activity will likely grow considerably as corporates look to 5. We’ll likely see B2B services such as banking-as-a-service, gain 2. expand their capabilities and offerings and fintechs look to scale. even more ground on the investor radar — not only in the Cross-border activity will likely also be robust as fintechs look to payments space, but also in areas like insurtech, wealthtech, and become global or regional leaders. This could also drive the return of regtech. We expect to see embedded finance continue to gain major mega M&A transactions. traction as organizations strive to integrate financial services with other environments. SPACs could steal the spotlight While IPO exit activity is expected to be strong in H2’21, we could Partnerships will be embraced by big techs and fintechs 3. see SPAC mergers stealing the limelight in H2’21 — particularly if Partnership models will be a critical means for companies looking Grab’s $40 billion SPAC merger goes ahead. We will likely also see 6. to expand their service offerings. We’ll likely see partnerships a proliferation of US SPACs looking to EMEA and the Asia-Pacific emerging across the fintech sector — from wealthtech to region for targets. insurtech — and involving a range of participants from the big techs and platform players to financial institutions and larger fintechs looking to add to their core services.

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After an unexpectedly strong 2020, the first half of 2021 sees massive rebound

Total global investment activity (VC, PE and M&A) in fintech Global ventureGlobal activity venture in fintech activity in fintech 2018–2021* 2018 – 2021* 2018–2021*

$250 5,000 $60 3,187 3,121 3,500 3,794 3,985 $50 2,932 3,000 $200 3,520 4,000 2,500 $40 $150 3,000 2,040 2,000 2,456 $30 $100 2,000 1,500 $20 1,000 $50 1,000 $10 500 $147.9 $215.4 $121.5 $98.0 $53.7 $41.4 $44.4 $52.3 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($B) Deal count

Global M&A activity in fintech Global PE growth activity in fintech 2018–2021* 2018–2021* $200 800 $6 120 694 104 104 700 $5 100 $150 569 502 600 86 $4 80 500 $100 400 $3 63 60 353 300 $2 40 $50 200 $1 20 100 $89.6 $170.8 $74.1 $40.7 $4.7 $3.1 $3.0 $5.0 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Late-stage venture valuations more than double year-over-year

Global median pre-money valuations ($M) by stage in fintech Global cross-border M&A activity in fintech 2018–2021* 2018–2021* $325.0 $80 250 205 183 200 $60 170 150 $40 $135.0 100 100 $74.5 $70.0 $20 $10.3 $24.8 $35.0 50 $19.7 $17.1 Global median M&A$51.3 size ($M) in fintech$69.7 $27.7 $5.0 $6.0 $7.0 $8.0 $0 0 2018–2021* 2018 2019 2020 2021* 2018 2019 2020 2021* Angel & seed Early VC Later VC Deal value ($B) Deal count

Global VC activity in fintech with corporate participation Global median M&A size ($M) in fintech 2018–2021* 2018–2021* $35 1,000 $55.0 $30 782 803 $49.9 758 800 $25 596 $20 600 $38.6 $15 400 $32.5 $10 200 $5 $33.2 $21.9 $24.2 $20.8 $0 0 2018 2019 2020 2021* Deal value ($B) Deal count 2018 2019 2020 2021*

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Q2 dip belies the massive push into fintech funding

Total global investment activity (VC, PE and M&A) in fintech Global M&A activity in fintech 2018–2021* 2018–2021*

$160 1,400 $160 250 1,275 $140 1,200 $140 206 1,124 1,181 200 194 $120 1,031 $120 954 1,000 179 941 973 934 937 934 932 159 159 $100 890 855 $100 159 150 149 150 794 800 145 139 130 $80 $80 122 122 600 105 100 $60 $60

400 $40 $40 50

$17.3 200

$20 $12.6 $20 $13.5 $12.3 $12.4 $11.1 $8.3 $7.9 $2.4 $37.1 $35.7 $29.8 $45.3 $27.0 $144.7 $26.3 $21.8 $23.7 $63.5 $50.7 $47.3 $23.5 $20.4 $33.3 $133.5 $50.9 $27.2 $18.4 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021

Deal value ($B) Deal count Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Momentum carries over between quarters for record first half

Global venture activity in fintech Global VC activity in fintech with corporate participation 2018–2021* 2018–2021* $35 1,200 $20 350 312 1,052 $18 988 $30 300 1,000 $16 284

881 $25 853 $14 236 250 775 783 766 762 800 762 786 223 748 $12 740 711 206 200 $20 673 196 197 179 184 195 600 $10 186 188 177 176 $15 150 $8

400 $10 $6 100

$4 200 $5 50 $2 $7.8 $17.4 $3.4 $4.6 $3.3 $3.9 $4.6 $10.1 $7.9 $5.3 $5.6 $5.5 $8.9 $11.9 $8.9 $9.9 $7.9 $8.9 $9.4 $13.0 $21.9 $10.0 $14.6 $12.5 $10.8 $11.7 $22.4 $29.9 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021 Deal value ($B) Deal count Angel & seed Early VC Later VC Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Top 10Top global 10 global fintech fintech deals dealsin 2020 in H1 2021

1. Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A 2. Robinhood — $3.4B, Menlo Park, US — Wealth/investment management — 4 Series G 8 3 1 — $2.75B, St. John’s, Canada — Institutional/B2B — M&A 9 3. Verafin 5 6 4. Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A 2 10 5. Divvy — $2.5B, Draper, US — Payments/transactions — M&A 6. SoFi — $2.4B, San Francisco, US — Lending — Reverse merger 7 7. Nubank — $1.5B, Sao Paulo, Brazil — Banking — Series G 8. Paysafe Group — $1.45B, London, UK — Payments/transactions — Reverse merger 9. Acima Credit — $1.4B, Sandy, US — Lending — M&A 10. BTC.com — $1.3B, Los Angeles, US — Blockchain/cryptocurrency — M&A

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Fintech segments — Payments — Insurtech — Regtech — Wealthtech — Blockchain/cyrptocurrency — Cybersecurity

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Payments sector keeps top spot for fintech investment globally

Total global investment activity (VC, PE and M&A) in payments After a strong 2020, global investment in payments kept up the momentum in the 2018–2021* first half of 2021, led by the $2.4 billion SPAC merger by US-based SoFi, the $120 600 $1.4 billion SPAC merger of UK-base Paysafe Group, two VC funding rounds totalling over $1.9 billion by Sweden-based Klarna and two funding rounds totalling over $1.1 billion by Brazil-based Nubank. The growth of e-commerce 490 $100 471 500 and contactless payments during the pandemic, partly driven by more connected 454 consumers, has created a perfect storm for fintech investors. Key H1’21 highlights from the payments sector include: $80 400 Open banking fueling payments investments in EMEA 327 Open banking regulations have helped accelerate fintech adoption in the EMEA $60 300 region, improving third-party access to data and fostering an environment of collaboration — particularly in areas such as embedded finance.

$40 200 Embedded finance diversifying payments space

The payments space is diversifying beyond person-to-person and bill payments, with solutions increasingly embedded into offerings, retail apps and ecosystem $20 100 platforms. Disbursements is an emerging area being looked at both by insurers for claims processing and by governments as part of disaster recovery. $49.9 $113.3 $27.8 $19.0 $0 0 Payments-focused M&A strengthens 2018 2019 2020 2021*

Deal value ($B) Deal count M&A activity continued to build during H1’21, although there were no mega M&A deals to be seen. There continues to be a lot of opportunities for strategic Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. acquisitions and for companies looking to expand market share, which bodes well for M&A heading into H2’21.

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What to watch for in H2’21 Increasing involvement of non-financial companies We’ve seen some great Many non-financial companies are broadening their reach into — European challenger banks partnering with US banks to examples of embedded payments and financial services. During H1’21, IKEA bought a piggyback on existing bank charters finance so far in 2021, with stake in Ikano bank to provide consumer banking services,2 — increasing number of challenger banks focusing on customer traditional retailers Walmart announced a partnership with Ribbit Capital to create “ niches, including minority communities, unbanked populations, partnering with financial a fintech to offer digital financial products3, and Walgreens LGBTQ2 customers, or high net-worth individuals institutions to embed deposit announced a partnership with MetaBank to offer bank accounts products or to provide — continued proliferation of ‘buy now, pay later’ offerings and in-store and online — including the use of a Banking-as-a- holistic and complimentary ‘pay by bank’ services Service platform by InComm Payments and debit cards issued offerings to their core by Mastercard.4 — strengthening focus on B2B payments solutions and services, customer base. This trend like digitized AR/AP will continue to grow, fueled — increasing interest in IPOs — both traditional and through by e-commerce, open SPAC mergers. banking, and APIs. Chris Hadorn Global Leader of Payments, Principal, Financial Services,” KPMG in the US

2 https://www.fintechfutures.com/2021/02/ikea-buys-49-stake-in-financial-services-partner-ikano-bank/ 3 https://corporate.walmart.com/newsroom/2021/01/11/walmart-announces-creation-of-new-fintech-startup 4 https://www.bankingdive.com/news/walgreens-to-launch-digital-bank-accounts-this-year/597645/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 1515 Fintech — Insurtech Global insights Fintech segments Featured interview | Spotlight article | Regional insights

Deal size and diversity driving global insurtech investment

Total global investment activity (VC, PE and M&A) in insurtech After a strong H2’20, insurtech investment remained solid in Q1’21, including the $828 million SPAC 2018–2021* merger of Clover Health in the US, the $818 million acquisition of GoCo Group in the UK by Future $35 500 PLC,5 and a $650 million raise by Germany-based WeFox. VC funding was particularly strong in the 458 insurtech space, driven by the continued maturation of startups and increasing valuations. Key Q1’21 450 440 highlights from the insurtech space include: $30 400 Valuations up as insurtechs exit successfully

$25 350 The positive public market activity from insurtechs, both from IPOs and SPAC mergers, has driven 329 interest in the space up along with valuations. In H1’21, Oscar Health raised $1.2 billion in a traditional 300 IPO, while Metromile, Clover Health and GoCo group all held SPAC mergers. Several other insurtechs $20 also announced SPAC mergers, including Hippo Insurance and Doma. 250

$15 Different regions seeing insurtech funding grow 197 200 While the US continued to attract the lion’s share of insurtech investment, other jurisdictions also attracted large rounds in H1’21, including Germany (WeFox), France (Alan and Active Assurances), $10 150 and India (PolicyBazaar). As insurtechs mature and attract bigger funding rounds in all regions, 100 investors are seeing the benefits being realized by users — making the sector even more attractive. $5 50 Enabling technologies attracting bigger funding rounds $29.1 $14.1 $16.5 $7.1 Insurtech carriers have attracted the most attention from investors historically, however, technology $0 0 2018 2019 2020 2021* enablers are growing on the radar of investors. During H1’21, a number of insurtechs focused on enablement for the insurance industry raised good funding rounds at high valuations, including Shift Deal value ($B) Deal count Technology, Embroker, Tractable and Collective Health.

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as 5 https://www.futureplc.com/2021/02/22/future-plc-acquires-goco-group-plc/ of 30 June 2021.

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Corporates making acquisitions What to watch for in H2’21 Over the last few years, the In the US, we’re seeing more corporates making outright — partnerships focused on providing on-demand insurance really large insurtech deals acquisitions in order to gain capabilities — a trend predicted products were almost exclusively a few years ago that is only coming to fruition now. During — increasing investments targeting the supplemental benefits insurtech carriers. While we H1’21, American Family bought commercial insurance “ space saw plenty of those deals 6 distributor Bold Penguin and USAA announced its purchase happening in H1’21, 7 — continued focus on embedded insurance of usage-based insurance provider Noblr. including Next Insurance, — technologies focused on enabling agents and brokers Clear Cover and Bought” by Big techs partnering to provide insurance offerings — vertical integration from insurtechs. Many, we also started to see Big techs continued to focus on forging partnerships to larger deals in the enabling embed insurtech offerings into their offerings and platforms. tech space, including Shift In H1’21, Google announced a partnership with Munich Re Technology — which is and Alliance to provide cyber insurance to Google Cloud focused on process customers. enablement, and Collective Health — which is a self insurance technology platform for businesses.

Pat Kneeland Manager, KPMG Innovation Lab ” KPMG in the US

6 https://www.dig-in.com/news/american-family-acquires-bold-penguin#:~:text=American%20Family%20Insurance%27s%20holding%20company%20has%20acquired%20the,founder%20Ilya%20Bodner%20will%20remain%20with%20the%20company. 7 https://communities.usaa.com/t5/Press-Releases/USAA-Announces-Plans-to-Acquire-Insurtech-Company-Noblr-Inc/ba-p/249768

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Surging interest sees regtech investment hit record annual high at mid-year

Total global investment activity (VC, PE and M&A) in regtech Investment in regtech surged in H1’21, particularly in the Americas and Europe where 2018–2021* the regtech space is maturing at a rapid pace. The constant evolution of regulatory $12 250 amendments and implementations, combined with the drive to reduce compliance 217 costs, is helping drive interest and investment in regtech. Q1’21 highlights from the 211 $10 201 regtech space include: 200 COVID-19 accelerating regtech investment

$8 A growing number of digital customers and transactions, in addition the opening of new channels for criminals to potentially exploit, has made it challenging for 150 142 companies to stay on top of fraud and compliance requirements. This has driven a $6 major increase in demand for regtech solutions able to identify and address incidents accurately. 100 $4 Cryptocurrency-focused regtech big winner in H1’21 With the values of some cryptocurrencies taking off, more and more investors are focusing on cryptocurrency trading. With this increased interest comes rising demand 50 $2 for safe and secure access to investments. This has led to a major uptick in regtechs focusing on the crypto space. In H1’21, Bullish Capital has also raised a significant

$8.0 $3.5 $10.4 $6.6 amount to develop a blockchain-based cryptocurrency exchange platform that blends $0 0 the performance, user privacy and compliance benefits of central order book 2018 2019 2020 2021* technology with the user benefits of decentralized finance.8 Deal value ($B) Deal count

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. 8 https://b1.com/news/launch-of-bullish-global//

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AML, KYC and fraud protection remain hot areas of investment Regulators in Asia focusing on regtech The evolving environment of Anti-money laundering, fraud protection, and know-your-customer While regtech investments in Asia lag behind other regions, business and new digital solutions attracted major attention from investors in H1’21, evidenced regulators in the ASPAC region continue to support regtech innovations are forcing banks by the $2.7 billion acquisition of Canadian fraud detection platform advancements. In H1’21, the Monetary Authority of Singapore “ and financial institutions to Verafin by Nasdaq, Mastercard’s acquisition of Ekata for $850 million, announced a $32 million fund to help regtech startups bring embrace the transformation to 10 and the $600 million buyout of Ireland-based Fenergo by France and POCs to market. Following on its development of a regtech stay competitive. The massive 9 UK-based PE firms Astorg and Bridgepoint. This space is expected to adoption roadmap in H2’20, the Hong Kong Monetary migration during the pandemic remain a critical sector of investment for the foreseeable future. Authority launched a Regtech Adoption Practical Guide to virtually accessing financial Series in H1’21 to provide practical guidance for implementing services amplifies the risks we Regtech markets maturing, led by US and UK 11 regtech solutions. were already facing (for The US and UK continued to be front-runners in the regtech space, with example, fraud incidents have What to watch for in H2’21 a number of companies in both countries attracting $100 million+ VC exploded due to new users on funding rounds, including US-based Bullish, Carta, Deel, and — strengthening focus on cryptocurrency-focused regtech digital channels) and RegTech Chainalysis and UK-based Rapyd and ComplyAdvantage. is promising the ability to — increasing investment from corporates looking to better quickly harness the power of manage their regulatory compliance technology and to positively — growing maturity of regtech firms in different regions transform risk management and regulatory compliance — increasing M&A activity, particularly in the Americas and processes. Europe. Fabiano Gobbo Global Head of Regtech, Partner, Risk Consulting,” KPMG in Italy

9 https://www.fenergo.com/press-releases/astorg-and-bridgepoint-acquire-financial-software-company-fenergo/ 10 https://www.mas.gov.sg/news/media-releases/2021/mas-commits-42m-to-spur-adoption-of-technology-solutions 11 https://www.hkma.gov.hk/eng/news-and-media/press-releases/2021/06/20210617-5/

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Cybersecurity investment on a record pace

Total global investment activity (VC, PE and M&A) in fintech: cybersecurity Total investment in cybersecurity grew dramatically in H1’21, driven by Nasdaq’s $2.7 2018–2021* billion acquisition of Canadian anti-financial crime management solution provider Verafin. $4.0 70 VC funding in the space was also very strong in H1’21, led by a $543 million Series A raise by Transmit Security, in what was described as the largest cybersecurity Series A $3.5 61 60 deal in history.12 Key Q1’21 highlights from the cybersecurity space include:

$3.0 53 Big start to the year for cybersecurity investment 50 Cybersecurity is on pace to see a record level of annual investment by the end of 2021, $2.5 44 40 driven by growing M&A in the space, including the $2.7 billion acquisition of Verafin. H1’21 also saw a number of announced acquisitions, including Paypal’s acquisition of digital $2.0 asset security provider Curv.13 30 $1.5 22 Increasing focus on automation and incident response 20 $1.0 Given the rise of ransomware and other cyber attacks, there is an increasing focus on the ability of companies to quickly detect malicious attackers. This is driving significant $0.5 10 investment in the AI space and also driving cybersecurity companies to refocus their $0.5 $0.9 $2.2 $3.7 efforts. In H1’21, IT security company FireEye announced the $1.2 billion sale of its IT $0.0 0 security business and name to Symphony Technology Group, keeping only its digital 2018 2019 2020 2021* forensics and incident response offerings under the Mandiant brand — which it initially Deal value ($B) Deal count acquired in 2013.14

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

12 https://www.forbes.com/sites/rashishrivastava/2021/06/22/transmit-security-raises-543-million-the-largest-series-a-funding-round-in-cybersecurity-history/?sh=1ef575ab3d7a 13 https://newsroom.paypal-corp.com/2021-03-08-PayPal-to-Acquire-Curv#:~:text=SAN%20JOSE%2C%20Calif.%2C%20March%208%2C%202021%20%2F%20PRNewswire,digital%20asset%20security% 20based%20in%20Tel%20Aviv%2C%20Israel. 14 https://marketresearchtelecast.com/fireeye-is-selling-portions-of-the-business-for-1-2-billion/62492/

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Growing comfort with cloud-based platforms driving What to watch for in H2’21 Given the significant increase cloud-based security investment — strengthening M&A and investment focused on machine in digital transformation across Over the last 18 months, companies have become a lot more learning and automation for cybersecurity enterprises, along with recent comfortable with relying on cloud-based platforms than they have high-profile ransomware — enhanced focus on managing and responding to “ been in the past. This uptick in interest and use of cloud-based attacks, it's not surprising that ransomware attacks technologies is now driving investment in the final piece of the AI and machine learning cloud puzzle: cloud-based security platforms. Investments in — increasing investment in digital customer behavior analysis focused threat detection and cloud-based security are two-fold, VC investments in and fraud identification. fraud solutions are getting a cybersecurity firms that have solved specific problems and lot of attention — from both acquisitions of niche cybersecurity firms by large cloud-based corporations and investors. In platforms looking to broaden the scope of their offerings. addition to these critical investment areas, we’re also seeing interest in consumer identity and access management solutions that are shifting quickly toward password-less security solutions.

Charles Jacco Americas Cyber Security Services, Financial services” Leader, Principal, KPMG in the US

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Wealthtech a big hit with VC investors in H1’21

Total global investment activity (VC, PE and M&A) in wealthtech Global investment in wealthtech boomed in H1’21, surpassing the total investment 2018–2021* seen in 2020 and nearing the record annual high set in 2015. VC investment was $1.6 60 particularly strong, including a $600 million raise by Canada-based Wealthsimple, a 57 $325 million raise by US-based CleanCapital, and a $300 million raise by US-based $1.4 NYDIG. Key Q1’21 highlights from the wealthtech space include: 50 Corporates taking action on wealthtech $1.2 42 Corporates have continued to play a key role in wealthtech investment, with a number 40 37 of well-established players making investments or acquiring wealthtechs in recent $1.0 quarters. In H1’21, JP Morgan announced the purchase of UK-based Nutmeg, pending regulatory approval.15 $0.8 31 30 Investment offerings maturing $0.6 The provision of investing services has matured significantly and gained more 20 credibility in the market. Wealthsimple, Nutmeg, Moneyfarm and others have $0.4 managed to get the cost of investing down by creating efficient ways of bulk

10 purchasing, digitally interacting with clients and completing onboarding processes. $0.2 Robo-advisory still in its infancy $0.7 $0.4 $0.8 $1.4 $0.0 0 The holy grail of robo-advisory — getting personalized advice through digital 2018 2019 2020 2021* means — is still in its infancy, with few investors putting faith in robot-driven advice Deal value ($B) Deal count over human experience. The infrastructure supporting robo-advisory is maturing (e.g., platforms, efficient processes), however, setting the stage for further Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. developments over time.

15 https://www.cnbc.com/2021/06/17/jpmorgan-to-buy-uk-digital-wealth-manager-nutmeg-.html #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 22 Fintech — Wealthtech Global insights Fintech segments Featured interview | Spotlight article | Regional insights

Consolidations among established wealth management What to watch for in H2’21 Many of the innovations in players — corporates continuing to target M&A in order to gain access to wealthtech to date have The wealth management space in Europe, particularly in the UK, innovations been focused on remains fragmented, making it difficult for firms to innovate. Some improving the — increasing consolidation among suppliers across the value “ standalone wealth management players are now looking to effectiveness of existing chain consolidate so they have enough assets under management to wealth management support making innovative and radical changes. — diversification of asset management platforms to offer a more business models. One diverse range of assets area where we do see — stronger focus on truly personalizing digitalized advice with new opportunities respect to model portfolio services. emerging relates to the use of investment platforms that put different asset classes, like real estate and other illiquid esoteric assets such as classic cars or wine, into the reach of standard investors.

Bill Packman Partner and Wealth Management Consulting Lead,” KPMG in the UK

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Investment in blockchain and crypto in H1’21 more than double all of 2020

Total global investment activity (VC, PE and M&A) in blockchain & cryptocurrency Investment in blockchain and cryptocurrencies heated up dramatically in H1’21, with 2018–2021* investment more than twice the level seen in 2020 and soaring past the previous annual $10 1,000 record high set in 2018. Key Q2’21 highlights in the crypto and blockchain space include:

$9 887 900 Evolving nature of investors As the blockchain and crypto sector has matured, so has the nature of its investors. In $8 800 H1’21, a significant amount of institutional money flowed into the crypto space, highlighting $7 700 the broadening of the investor base. Investor awareness and knowledge of the sector is 639 growing, with investors now having a much better understanding not only about crypto $6 580 600 assets, but also the operational and procedural side of crypto — from custody and storage 548 to storekeeping and the competitiveness and maturity of service providers. $5 500 Increasingly Hot VC market $4 400 VC investment was very strong in the blockchain and crypto space. Numerous companies

$3 300 raised $100 million+ funding rounds, including BlockFi ($350 million), Paxos ($300 million), Blockchain.com ($300 million) and Bitso ($250 million). $2 200 China continuing to lead CBDC drive $1 100 China has continued to move forward with testing of its central bank digital currency (the $7.2 $5.0 $4.3 $8.7 ‘digital renminbi’, digital yuan, or e-CNY). In H1’21, it expanded its pilot project to include $0 0 salary payments for some workers in China’s Xiong’an New Area,16 the payment of subway 2018 2019 2020 2021* 17 18 Deal value ($B) Deal count fares and the exchange of digital and physical currencies at two banks in Beijing. The evolution of the digital currency combined with China’s Belt and Road Initiative could truly Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. open up a whole new level of correspondent banking and money transfers.

16 https://www.coindesk.com/china-cbdc-wage-pilot 17 https://bitcoinist.com/after-chasing-off-bitcoin-miners-china-launches-new-test-for-digital-yuan/ 18 https://www.pymnts.com/cryptocurrency/2021/china-owned-commercial-bank-allows-digital-yuan-to-cash-conversions-at-atms/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 24 Fintech — Blockchain/cryptocurrency Global insights Fintech segments Featured interview | Spotlight article | Regional insights

Emerging focus on NFTs What to watch for in H2’21 Between its digital currency Interest in non-fungible tokens is beginning to gain more traction, — continued maturation of the cryptocurrency space and Belt and Road Initiative, with interest in a whole range of new types of assets, ranging from — stronger separation between cryptocurrencies and the use of China could create a real professional real estate to more fragile assets which can be blockchain technologies alternative to the supremacy tokenized or fractionalized. “ of the US dollar over time. — further focus on regulatory frameworks, particularly in India, While the digital currency Increasing regulatory attention which could regulate cryptocurrencies as an asset class in initiative is relatively small Cryptocurrencies continued to be a critical focus for some H2’21 scale now — still in the regulators, with widespread differences between jurisdictions as — the evolution of exchanges focused on areas such as NFTs. testing phase — it has a lot to acceptance and use. During H1’21, China banned financial of potential. With countries institutions and payments companies from providing from areas such as Africa cryptocurrency related services,19 while El Salvador announced and Southeast Asia signing that Bitcoin would become legal tender in the country as of trade agreements with China September 7, 2021.20 and potentially accepting the digital yuan as a mode of clearing trade, it could gain traction quickly. It’s going to be a critical area to watch over the next few years.

Laszlo Peter Head of Blockchain Services, Asia Pacific, ” KPMG Australia

19 https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business. 20 https://www.reuters.com/technology/bitcoin-become-legal-tender-el-salvador-sept-7-2021-06-25/ Not for distribution in the USA. #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 25 Global insights | Fintech segments Featured interview Spotlight article | Regional insights

Featured interview Jason Pau Chief of Staff, International to the Chairman and CEO, Ant Group

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Closing the digital skills gap: How Ant Group is supporting the next generation of global fintech talent through the 10x1000 Tech for Inclusion program

Bridging the digital skills gap is a major challenge, not only for established companies in financial services, but also for fintech startups looking to grow and for countries looking to establish or expand their digital economies and fintech ecosystems. Through the 10x1000 Tech for Inclusion program, Ant Group’s digital payment platform Alipay is working in collaboration with the International Finance Corporation (IFC) and other partners to close the skills gap by developing and fostering a global community of fintech talent that can help drive digital economic growth. Recognizing the importance of digital skills Building a fintech community for the future Ant Group, which is the owner and operator of Alipay, understands the critical role of 10x1000 Tech for Inclusion program activities align with key pain points for fintechs, such digital skills and capabilities. “In the last 17 years of our journey, we realized that digital as fostering the mindset needed to adopt technologies like blockchain, AI, and cloud skills — tech skills — are really the heart of what can drive this new era of digital growth computing to drive outcomes like inclusion and sustainability, as well as, applying and digital innovation,” explains Jason Pau, the Chief of Staff — International to the technology to solve real business problems. Harnessing the power of the global fintech Executive Chairman and CEO of Ant Group. community, the program aims to establish a truly global curriculum to help learners across Recognition of the importance of tech skills has grown considerably over the last 18 the world advance. months. “COVID-19 has…shown the world how important digital skills [are],” he says. But access to such skills — or the ability to develop them — is limited, particularly in less The community element can’t be overstated. “We really think the power is going to be in mature jurisdictions and emerging economies. “I think we all need to work harder, being in the community,” Pau says. By fostering a global community of fintech practitioners and the business of fintech…to ensure that this digital divide doesn't persist.” business leaders that help each other with business challenges and innovation, the program will likely have an impact and reach far beyond being a platform for learning. The 10x1000 Tech for Inclusion program Ant Group was already working on ways to help close the digital divide before COVID-19 Creating a foundation for success drove demand for digital tech talent through the roof globally. In 2018, Alipay, the leading In H1’21, 10x1000 Tech for Inclusion held its first full program online with 15 teams of 10 digital platform in China, established the 10x1000 Tech for Inclusion program in professionals each. As part of the program, each group was challenged to develop a partnership with the International Finance Corporation (IFC). The program’s mission is to capstone project centered around one of three key themes: sustainability, innovation, and enable learners to become drivers of digital economic growth. inclusion. They had to work together to identify a problem and then come up with a “Our vision for this program is to train 1,000 emerging tech talents and tech leaders — not solution or a product that could be taken to market. only in emerging markets, but globally — each year for the next 10 years,” Pau shares. “Our hope is that by training this group of 1,000 each year, hopefully 10,000 over 10 years, that they will inspire hundreds of thousands and millions more.” #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 27 Featured interview: Ant Group Global insights | Fintech segments Featured interview Spotlight article | Regional insights

I’ll be very honest, we were absolutely surprised by the quality of the capstone projects,” Pau says. He provides examples of the different problems that groups tackled: How can we drive financial literacy access to youth? How can fintech be used to develop and support carbon trading? How can fintech be leveraged to reach the unbanked — individuals who haven’t been reached by traditional financial services? How can we help incumbent financial institutions leverage fintech to drive greater access?

The quality of the capstone projects and the ability of teams to work together so well highlights the vast potential for the 10x1000 Tech for Inclusion program over the long- term. “That really surprised us — the level of engagement between each of these learners,” Pau explains. He highlights the sense of collaboration between program Watch the full interview as KPMG’s Global Fintech Co-Leader, participants and their passion for learning about the latest in technology innovations Anton Ruddenklau, speaks to Jason Pau, Chief of Staff — and how to deploy them to solve problems. “That’s something we’re really excited International to the Chairman and CEO of Ant Group about how Ant Group are helping to close the digital skills gap in Asia: about…It really speaks to the potential for greater collaboration.” home.kpmg/fintechpulse

Looking to the future: What’s next for the 10x1000 program? About Ant Group While the success of the initial training program is exciting, Pau emphasizes that Ant Group aims to create the infrastructure and platform to 10x1000 Tech for Inclusion is just getting started — and that they’re open to bringing support the digital transformation of the service industry. It more partners on board. “What we're really hoping to build here is a global community, strives to enable all consumers and small and micro businesses an open community,” he explains. “We're looking for partners, whether it's on to have equal access to financial and other services that are content…in terms of recruitment or in terms of offering this platform for learners inclusive, green and sustainable. around the world. We're also looking for strategic partners that believe in the same Ant Group is the owner and operator of Alipay, serving mission that we do [at] 10x1000.” hundreds of millions of users, and connecting them with For more information on 10x100 Tech for Inclusion or to get involved, visit the merchants and partner financial institutions that offer inclusive website: www.10x1000.org financial services and digital daily life services such as food delivery, transport, entertainment, and healthcare.

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Spotlight Putting big data at the heart of ESG decision-making

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Putting big data at the heart of ESG decision-making

Contributors: Budha Bhattacharya and Kin Yu, KPMG in the UK But doing so is not straightforward. Whereas financial reporting is What was once a niche ESG issues have always been important in the financial and corporate standardized and in familiar formats, corporate reporting around ESG landscape, but over the past 18 months or so, it’s been taken to a new level. dimensions is anything but. Companies are not obliged to report most activity for green funds The COVID-19 pandemic has hugely increased the focus on the health and ESG-related information; therefore, practice is fragmented and has grown far beyond sustainability of our planet, together with pressing questions of social equality disparate. There are few common templates, meaning that companies “ that, with big pension and cohesion. Climate change concerns have escalated, the Black Lives will publish different information in different ways. There are a multitude funds and other prominent Matter movement has become a powerful force, geopolitical risks and of surveys in the market, but these only offer limited help: companies institutions leading the participate in some surveys but not others, and might answer slightly tensions continue to create volatility — the list goes on. way. They are pushing differently each time. Along with a continuing focus on governance, ethics and compliance, companies towards doing all of these factors have combined and coincided to propel ESG to new Much ESG information is also self-reported. Inevitably, this opens the the right thing. Words are levels of significance. And they are being particularly championed by possibility of ‘greenwashing’. Understandably enough, corporates are not enough. There’s been the Millennial generation — that is about to inherit probably the biggest keen to paint themselves in the best light possible. transfer of wealth ever seen over the next two decades as baby a sea change. boomers pass the baton. Millennials want to know not just how much Two-speed market Budha Bhattacharya return an investment will make, but how it will make that return and at Cutting through the noise, obtaining relevant information quickly, and KPMG, KPMG in the UK what cost to people, planet or communities. analyzing it effectively is, therefore, much harder than perhaps it needs ” This means that investments have to be repurposed toward something to be. We have also seen the opening of something of a two-speed more meaningful than straight returns. Increasingly, institutional as well market. Big global institutions across banking, fund management and as individual investors are throwing their weight behind this — becoming insurance have been highly active in either building their own in-house the main drivers for change in financial markets. data analytical capabilities for ESG such as State Street, Goldman Sachs, JPMorgan or acquiring one of the new breed of fintech data The ESG data challenge aggregators — or a combination of both. M&A in this space has been The investor sentiment shift toward conscientious society, a greener prolific. For example, Blackrock recently bought Baringa’s Climate planet and improved governance practices is driving all financial Change Scenario Model and integrate it into its Aladdin risk institutions, whether big or small, traditional or fintech, to be fully management framework,21 while HSBC Asset Management bought a cognizant and in control of the ESG profile of their investment and stake in Radiant ESG,22 a US-based ESG asset management startup. underwriting positions, and embed ESG considerations into their reporting and risk management frameworks. 21 https://www.reuters.com/business/sustainable-business/blackrock-buy-baringa-partners-climate-tech-aladdin-2021-06-17/ 22 https://www.about.us.hsbc.com/news-and-media/hsbc-asset-management-finances-the-launch-of-radiantesg-global-investors #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 30 Spotlight — ESG Global insights | Fintech segments | Featured interview Spotlight article Regional insights

Putting data at the heart of ESG decision-making

This means that the big institutions are able to track data signals across beyond this, scoring whole investment funds, sovereign wealth funds, multiple sources and decipher them almost instantly. They can react to bonds, equities, structured bonds (tranches of RMBS/CMBS/ABS etc.) You can’t manage what you breaking news and adjust their positions in response. or an illiquid product such as loans or mortgage-backed securities. can’t measure — so robust ESG data is key. There’s a In recent years, even large credit rating agencies and market data The tool also enables clients to unravel the score, providing the root-cause-analysis of what factors and issues have led to the rating. “ lot of noise in the market providers went on a buying/acquiring spree to remain competitive and and of course some cater to the ESG and sustainability related demand. The client can then determine for themselves the materiality of the findings — recognizing that different factors may have a greater or selective ‘greenwashing’ KPMG’s ESG IQ platform lesser weight depending on the client’s guiding ESG strategy. For too. It’s becoming a pre- For others, it remains much more difficult, especially when resources example, we have used the tool with one of the biggest US based Asset requisite to have access to are constrained across multiple competing priorities. However, there Managers to help their treasury team unravel their asset-backed AI-powered tools that ingest portfolio with structured bonds, sovereigns, agencies, municipals, are tools available to help — such as KPMG’s ESG IQ platform. structured and unstructured government bonds and more. ESG IQ is an analytics platform developed by KPMG’s Lighthouse data data across multiple scientists and engineers, in conjunction with some of the largest asset A critical capability sources and give fast and managers and Google. ESG IQ enables clients to select and pool both ESG data is rapidly becoming a mini industry of its own, with some 200 reliable analysis on which to structured ESG reference data from multiple providers and unstructured data providers and a plethora of Fintech startups already operating in data from a wide range of sources, including news reports, social media base decisions. You need the market, globally. This in itself reflects the importance now attached tools you can trust. posts, blogs, NGO reports, research reports, and pages across the to ESG. It has well and truly moved into the mainstream of financial web. The platform can even pull out ESG data from ‘dark data pools’, services and is on its way to redefine capital markets as we know it, Kin Yu such as legal documents, trade confirms (depending on the asset into a more transparent and conscientious one. KPMG in the UK class), and other sources using advanced Natural Language ” Processing (NLP). For any financial institution, ESG-related decision-making is a critical capability. Ensuring you have the tools to do this is not a nice to have We believe it is unique in that other score providers can only score but an increasingly essential requirement. individual entities or companies. But the ESG IQ platform can go

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In H1 2021, fintech investment in the Americas reached $51.4B with 1,188 deals

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Americas attracts $51.4 billion in fintech investment, including record $31 billion in VC Fintech investment in the Americas reached $51.4 billion in H1’21, with VC investment accounting for $31 billion — shattering the previous annual high of $24 billion set in 2020. The continued innovations in financial technology, combined with the dramatic increase in use of digital offerings has made fintech one of the most active sectors of investment, both from a VC perspective and from an M&A standpoint. Key H1’21 highlights from the Americas include: Payments hot across the Americas Consolidations in the B2B space The payments space was incredibly active in H1’21. Exits got a significant amount of H1’21 saw a number of consolidations occurring in the B2B space, including Bill.com’s attention in the US — with alternative lender Affirm raising $1.2 billion in its IPO and acquisition of Divvy. The B2B payments space is quite hot and is expected to remain Deluxe acquiring First American Payments for $960 million.23 VC funding in the very attractive to investors given the amount of room it has to grow as companies payments space was particularly notable in Latin America where Brazil-based Nubank across the Americas move from cheque-based payments to electronic payments. As raised $1.5 billion. companies look to scale and gain market share, more consolidations will likely occur.

Valuations driving unicorn births Wealthtech sector growing at a rapid pace in Americas Interest in wealthtech grew considerably in the Americas during H1’21, with US-based Fintech valuations remained high in H1’21 as investors continued to see the space as Robinhood raising $3.4 billion and Canada-based Wealthsimple raising $600 million. PE attractive and well-performing. This likely drove the explosion of unicorn births in the firms Motive Partners and Clearlake Capital also bought an 80 percent stake InvestCloud first half of 2021. While the importance of unicorn status is waning in the US given its during H1’21. proliferation of unicorns, it is still a significant milestone elsewhere in the Americas. In H1’21, Canadian e-commerce company Clearco and ID verification firm Trulioo Trends to watch for in H2’21 became unicorns, in addition to Mexico-based cryptocurrency platform Bitso. — increasing investments by PE firms focusing on fintech — continued investment growth in areas including payments, alternative lending, Corporates getting into crypto space crypto and wealth management During H1’21, a number of corporates in the US made big bets on cryptocurrencies, — an increase in SPAC acquisitions focused on unicorn and near unicorn fintechs including Paypal — which acquired crypto-security firm Curv in H1’21 following its — bigger deals across the Americas, particularly in Latin America as fintechs continue announcement of a partnership with Paxos in late 2020. Paypal ventures contributed to mature to Paxos’s $300 million raise in H1’21.24 Facebook, through the Diem Association, — emergence of super apps and platforms that provide consumers with a broader also continued to move forward with its plans to launch a US dollar stablecoin before range of offerings — including financial products. the end of the year.25

23 https://www.pymnts.com/news/partnerships-acquisitions/2021/deluxe-signs-960-million-acquisition-deal-for-first-american-payments 24 https://www.forbes.com/sites/ninabambysheva/2021/04/29/paypal-crypto-partner-paxos-raises-300-million-at-24-billion-valuation/?sh=531a310d180f 25 https://www.nasdaq.com/articles/facebook-to-launch-diem-cryptocurrency-amid-rising-digitalization-2021-05-18 #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 33 Regional insights — Americas Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

First half of 2021 notches record VC invested, en route to a mammoth year

Total investment activity (VC, PE and M&A) in fintech in the Americas Venture activity in fintech in the Americas 2018–2021* 2018–2021*

$150 1,731 1,697 2,000 $40 1,343 1,500 1,599 1,306 1,294 1,188 1,500 $30 $100 960 1,000 1,000 $20 $50 500 500 $10 $49.6 $119.9 $82.4 $51.4 $16.1 $19.8 $24.3 $30.7 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($B) Deal count

M&A activity in fintech in the Americas PE growth activity in fintech in the Americas 2018–2021* 2018–2021* $120 400 $3,000 60 52 $100 380 302 $2,500 50 263 45 300 42 $2,000 40 $80 201 $1,500 30 $60 200 27 $40 $1,000 20 100 $20 $500 10 $32.9 $98.6 $56.7 $18.0 $562.5 $1,455.9 $1,396.5 $2,754.0 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($M) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Corporates join in record sum of VC invested

VC activity in fintech with corporate participation in the Americas Thanks to a red-hot venture financing market, investment in fintech is on the 2018–2021* rise nearly everywhere. The stratospheric level of late-stage VC valuations $15 400 points to investor enthusiasm for mature fintech companies, as well as ample 317 324 sums of dry powder that fund managers are looking to disburse even as the 279 300 $10 260 environment remains quite competitive. Much of this surge can be attributed 200 to late-stage companies capitalizing on a very accommodating funding $5 environment for large infusions of private capital en route to going public via 100 the emerging variety of routes such as direct listings or SPACs. $6.0 $8.0 $11.4 $12.8 $0 0 2018 2019 2020 2021* Deal value ($B) Deal count

Median M&A size ($M) in fintech in the Americas Median pre-money valuations ($M) by stage in fintech in the Americas 2018–2021* 2018–2021*

$100 $440.0 $82.3 $80 $67.2

$60 $182.5 $43.0 $40 $122.5 $32.4 $85.4 $29.0 $34.0 $55.0 $26.0 $8.0 $20 $6.5 $7.0 $10.0 $0 2018 2019 2020 2021* 2018 2019 2020 2021* Angel & seed Early VC Later VC

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Q2 carries over financing volume momentum, leading to record half-year for total activity

Total investment activity (VC, PE, M&A) in fintech in the Americas M&A activity in fintech in the Americas 2018–2021* 2018–2021* $90 700 $90 120 112 112

$80 620 $80 107 600 100 568 $70 $70 89 490 500 87 468 84 83 $60 80 80 $60 456 443 431 428 77 74 408 427 69 $50 400 $50 371 376 64 377 352 60 58 $40 $40 300 50

$30 $30 40 200 $20 $20 20 100 $8.1 $8.0 $8.2 $7.3 $10 $7.5 $10 $7.2 $5.0 $3.9 $2.6 $2.2 $11.6 $18.4 $12.3 $18.3 $83.4 $13.1 $16.6 $44.6 $24.0 $27.4 $13.3 $14.3 $76.6 $36.8 $10.1 $8.6 $9.3 $10.5 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021 Deal value ($B) Deal count Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Q2 2021 sets multiple records for aggregate capital invested

Venture activity in fintech in the Americas VC activity in fintech with corporate participation in the Americas 2018–2021* 2018–2021* $18 600 $9 160

$16 $8 499 136 140 500 $14 461 $7 124 120

$12 400 $6 366 368 341 349 100 353 $10 340 333 $5 91 91 315 79 81 301 298 300 81 81 80 294 $8 285 $4 75 73 66 67 70 65 60 $6 200 $3

40 $4 $2 100 $2 $1 20 $1.1 $1.4 $1.7 $1.8 $1.6 $2.1 $2.6 $1.6 $2.8 $2.8 $2.9 $3.0 $5.0 $7.8 $3.3 $3.9 $5.0 $3.9 $3.8 $5.2 $6.2 $4.5 $5.7 $5.3 $5.8 $7.5 $14.1 $16.7 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021 Deal value ($B) Deal count Angel & seed Early VC Later VC Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Canada attracts record $4.8 billion in fintech investment in H1’21: how high can it go by year end? — Total fintech investment in Canada skyrocketed to $4.8 Total fintech investment activity (VC, PE and M&A) in Canada As a result of COVID-19, billion in the first half of the year, already surpassing the 2018–2021* many, if not most, financial previous annual record, set in 2017. $4,500 70 institutions really had to — Canada saw robust M&A deal value in H1’21, driven $4,000 “ accelerate their digital primarily by Nasdaq’s acquisition of cybersecurity firm 59 60 capabilities. To do this, Verafin for $2.7 billion and a number of smaller M&A $3,500 many recognized that they deals, including the $265 million acquisition of PayBright could get some of those 49 50 by Affirm and the $113 million acquisition of Flexiti by $3,000 capabilities more quickly Curo.26 45 42 and efficiently by partnering 40 — Canada is attracting larger VC deals as fintech startups $2,500 39 with fintechs. This mature, evidenced by Wealthsimple’s $600 million raise 35 realization, combined with and Fraction Technologies’ $220 million raise in H1’21. $2,000 31 30 Canada’s strong and 27 27 28 maturing fintech ecosystem — Corporate interest and investment in fintech continued to $1,500 23 has helped drive the strong diversify, both to accelerate internal capabilities and to 19 20 uptick in fintech investment 18 19 support others; in H1’21, RBC launched RBCx — a $1,000 here. platform aimed at providing holistic financial and 10

27 $452.5 $435.6 John Armstrong entrepreneur support services to technology startups. $500 $380.7 $315.2

$225.4 Partner, $247.6 $188.6 $104.3 $82.7 $1,786.8 $3,845.8 $33.5 — Fintech investment is expected to remain strong in $679.5 $994.5 National” Financial Services Leader, $0 0 KPMG in Canada Canada, particularly in AI-driven solutions, payments, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 and crypto. 2018 2019 2020 2021

Deal value ($M) Deal count

26 https://ca.finance.yahoo.com/news/deluxe-completes-acquisition-first-american-140000269.html 27 http://www.rbc.com/newsroom/news/2021/20210615-rbcx-platform.html Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 38 Regional insights — Americas: United States Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

VC investment in the US surges to over $25 billion Total fintech investment activity (VC, PE and M&A) in the US — US VC investment in fintech surged past 2020’s 2018–2021* The market is definitely picking the winners now, with peak high of $22 billion with 6 months left in the $90 600 year, led by the $3.4 billion raise by Robinhood, a the bigger and more $600 million raise by Stripe and $500 million $80 “ established companies 517 raises by Better, ServiceTitan, and DailyPay. 500 growing and having an easier $70 time raising money than — The maturation of the US fintech sector was 466 others. That said, innovative evident in the robust exit activity in H1’21, $60 384 400 companies will continue to including Affirm’s successful IPO, the direct listing 376 380 375 354 357 364 get funding. There’s still a lot of Coinbase, the SPAC merger of SoFi with Social $50 346 319 of opportunity for companies Capital Hedosophia Holdings Corp. V, and the 307 311 300 305 looking at aspects of financial SPAC merger of insurtech Clover Health with $40 services differently — like Social Capital Hedosophia Holdings Corp. III. Pipe, which raised $250 $30 200 — Payments M&A was a hot ticket in the US as million in H1’21 to support its companies looked to gain breadth and market unique approach to working $20 share. In H1’21, Deluxe acquired First American capital financing for 100 Payments by Deluxe, Repay acquired BillingTree, merchants. $10 $7.1 $6.5 and Bill.com acquired Divvy. $5.9

$12.5 $11.7 $17.2 $82.0 $12.3 $15.8 $43.7 $19.3 $22.8 Robert Ruark $10.8 $9.2 — Fintech investment in the US will likely remain $0 0 Principal, Financial Services Strategy Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 and Fintech Leader, robust in H2’21, particularly in payments, ” KPMG in the US wealthtech, and crypto; interest in lending could 2018 2019 2020 2021 also open up as consumers look to travel and spend more post-pandemic. Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Top 10 fintech deals in the Americas in H1 2021

1. Robinhood — $3.4B, Menlo Park, US — Wealth/investment management — Series G 2 2. Verafin — $2.75B, St. John’s, Canada — Institutional/B2B — M&A 7 1 3. Divvy — $2.5B, Draper, US — Payments/transactions — M&A 4 3 9 8 10 4. SoFi — $2.4B, San Francisco, US — Lending — Reverse merger

6 5. Nubank — $1.5B, Sao Paulo, Brazil — Banking — Series G 6. Acima Credit — $1.4B, Sandy, US — Lending — M&A 7. BTC.com — $1.3B, Los Angeles, US — Blockchain/cryptocurrency — M&A 5 8. First American Payments — $960M, Fort Worth, US — Payments — M&A 9. Clover Health — $828M, Franklin, US — Insurtech — Reverse merger 10. InvestCloud — $800M, West Hollywood, US — Wealth/investment management — Buyout

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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In 2021, investment in fintech companies in Europe, Middle East and Africa (EMEA) recorded $39.1B with 792 deals

#fintechpulse

41 Regional insights — EMEA Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

EMEA region sets numerous records as fintech investment hits $39 billion Total fintech investment in the EMEA region continued to surge, with over $39 billion invested in H1’21, compared to 2020’s total of $26 billion. The region also shattered its previous annual high for fintech VC investment, attracting $15 billion in H1’21, compared to $9 billion during all of 2020. Top deals included the $14.8 billion deal by Refinitiv, the $2.6 billion acquisition of Itiviti by Broadridge Financial Solutions,28 the $1.5 billion SPAC merger of Paysafe Group with Foley Trasimene Acquisition Corp.,29 and two VC raises totaling over $1.9 billion by Klarna. Key H1’21 highlights from the EMEA region include:

A diversity of jurisdictions attracting big investments Fintech business models gaining traction The EMEA region attracted numerous large deals in H1’21; these deals extended well As a result of the pandemic, consumers across the EMEA region have gotten more beyond the UK, Germany and Sweden — from the $800 million PE investment in Abu comfortable with digital products and services which has helped drive uptake for digital Dhabi-based Group 42 and the $600 million PE buyout of Ireland-based Fenergo to banking, insurance, wealth management, and other products. This has helped a broad $100 million+ VC funding rounds in the Netherlands (i.e., Mollie, Bunq), France (e.g., range of fintechs in the region to grow and, therefore, attract larger investments. Ledger, Market Pay, Shift Technology, Alan, and others ), Austria (i.e., BitPanda), the Czech Republic (Twisto), and Saudi Arabia (Tamara). Corporate investment at an all-time high Corporate-affiliated VC investment in the EMEA region soared to a record high in Wealthtechs attracting significant interest in H1’21 H1’21, with $5.2 billion invested compared to $5.1 billion in all of 2020. Given the Wealthtech was an incredibly hot area for investment in the EMEA region, with US- digital trends that have accelerated as a result of COVID-19, many corporates across based JP Morgan acquiring UK-based Nutmeg for $989 million and Germany-based the financial services sector have turned their attention to rapid digitization, whether by Trade Republic raising a $900 million VC funding round during H1’21. making direct investments, acquisitions, or forming partnerships with fintechs.

Digital banks continue to draw attention Trends to watch for in H2’21 Investment continued to pour into digital banks in the EMEA region in H1’21, including — stronger focus on the B2B space, including areas like SME lending a $443 million raise by Starling Bank and a $110 million raise by Solarisbank. — increasing interest in M&A, IPOs, and potentially mergers with US-based SPACs Investors in Europe are beginning to make bets on which banks will evolve into truly pan-European banks able to fulfill the diverse needs of their customers. — more fintechs embracing ecosystem models in order to act as a one-stop shop for customers — growing focus on ESG and sustainability-focused fintech offerings.

28 https://www.itiviti.com/news/broadridge-completes-acquisition-of-itiviti-extending-capital-markets-franchise 29 https://www.paysafe.com/en/paysafegroup/news/detail/paysafe-completes-business-combination-with-foley-trasimene-acquisition-corp-ii/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 42 Regional insights — EMEA Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

2021 sees deal value almost match the entirety of 2020 already

Total investment activity (VC, PE and M&A) in fintech in EMEA Venture activity in fintech in EMEA 2018–2021* 2018–2021* $80 1,277 1,500 1,200 1,198 $20 1,500 $60 1,000 $15 1,040 989 792 940 1,000 $40 $10 641 500 500 $20 $5 $60.1 $70.9 $25.7 $39.1 $5.1 $8.0 $9.4 $15.1 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($B) Deal count

M&A activity in fintech in EMEA PE growth activity in fintech in EMEA 2018–2021* 2018–2021* $80 250 221 202 $2,500 50 39 200 35 $60 182 $2,000 40 150 $1,500 27 30 $40 125 26 100 $1,000 20 $20 50 $500 10 $52.9 $62.3 $15.7 $22.4 $2,108.1 $582.2 $580.2 $1,551.4 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($M) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Amid strong investment levels, median M&A size surges

VC activity in fintech with corporate participation in EMEA Across the entire fintech ecosystem, investment levels are on the rise. EMEA 2018–2021* has seen massive fundings of venture-backed unicorns as well as significantly $6 300 248 sized mergers as incumbents seek to consolidate. M&A size has consequently $5 215 250 surged in the first half of the year, even as a rising tide of capital has pushed $4 187 200 up late-stage venture valuations in particular. Corporates have contributed to 174 $3 150 the rise in VC invested, joining in rounds worth an aggregate of $5.2 billion in $2 100 2021 already, outstripping the massive tally from 2020. Fintech is seeing such $1 50 levels of activity in EMEA especially as incumbents compete for market share $2.3 $3.7 $5.1 $5.2 and newer entrants vie for category leadership across the disparate payments, $0 0 2018 2019 2020 2021* wealthtech and insurtech spaces in particular. Deal value ($B) Deal count

Median M&A size ($M) in fintech in EMEA Median pre-money valuations ($M) by stage in fintech in EMEA 2018–2021* 2018–2021* $80 $70 $69.3 $51.5 $60 $50.6 $50 $31.1 $23.3 $40 $21.8 $28.9 $13.5 $30 $10.0 $9.7 $13.2 $20 $18.8 $4.5 $5.1 $3.7 $5.9 $10 $0 2018 2019 2020 2021* 2018 2019 2020 2021* Angel & seed Early VC Later VC

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. Note: The median M&A size in 2021* is based on a population where n = 22.

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M&A volume surges in first quarter of 2021

Total investment activity (VC, PE and M&A) in fintech in EMEA M&A activity in fintech in EMEA 2018–2021* 2018–2021* $60 450 $60 80 419 400 71 69 70 $50 373 $50 350 346 346 60 326 328 59 56 311 310 311 54 $40 295 296 300 $40 284 51 50 50 49 49 48 259 263 46 250 44 44 $30 $30 40 40 200 30 $20 150 $20

20 100 $10 $10 10 $5.1 $5.1 $5.1 $4.7

$4.2 50 $4.2 $4.3 $2.4 $2.2 $2.1 $1.8 $1.6 $21.0 $7.1 $6.4 $25.6 $55.6 $6.8 $16.0 $23.8 $15.3 $0.6 $0.0 $19.4 $24.2 $53.6 $13.2 $17.7 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021

Deal value ($B) Deal count Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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Massive momentum carries over into record-breaking 2021

Venture activity in fintech in EMEA VC activity in fintech with corporate participation in EMEA 2018–2021* 2018–2021*

$10 350 $3,000 100 333

$9 87 90 308 300 87 287 $2,500 $8 80 270 261 265 247 254 75 254 250 70 $7 246 68 231 234 $2,000 218 60 60 $6 58 202 200 55 55 55 $5 $1,500 49 49 50 47 150 43 $4 40 36 $1,000 30 $3 100 20 $2 $500 50 10 $1 $1,018.8 $1,018.0 $1,101.0 $1,732.0 $1,524.3 $2,850.8 $2,360.2 $573.7 $649.7 $654.5 $736.7 $895.2 $784.1 $388.9 $1.1 $1.6 $1.1 $1.3 $2.5 $2.0 $1.8 $1.7 $1.6 $2.0 $3.2 $2.7 $5.7 $9.4 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021 Deal value ($M) Deal count Deal value ($B) Deal count Angel & seed Early VC Later VC

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

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UK sees $24.5 fintech investment in H1’21 as VC funding hits new high

— Both VC investment in fintech and deal volume in the Total fintech investment activity (VC, PE and M&A) in the UK COVID-19 sparked a real UK reached new quarterly highs in Q1’21 and then 2018–2021* race to digital in the financial climbed even further in Q2’21. Across the 2 quarters, $60 160 services space here in the Fintech-focused VC investment in the UK reached $6.2 143 UK, which has spurred on billion – bolstered considerably by the massive $14.8 140140 “ $50 132 133 the major banks. Many of billion Refinitiv deal. 129 124 them have diverted large 120 118 120 — Most subsectors of fintech are attracting attention from 112 112 swaths of their investment 108 109 investors in the UK, including payments, wealthtech, $40 105 100 pots into digitization — insurtech, regtech, cybersecurity, and others — due, in which is a major reason we part, to changing customer behaviors, but also due to are seeing so much $30 79 80 the amount of dry powder in the market and the broader corporate investment right range of investors. 60 now. The same is true for — Momentum is building in the UK around the SME $20 other incumbents in other lending space and the lending ecosystem in terms of 40 financial services subsectors KYC and customer due diligence. as well. $10

$5.3 20 John Hallsworth

— The ‘Buy Now, Pay Later’ space has seen exponential $4.4 $2.7 $2.4 $2.5 Partner $1.2 $1.6 $1.5 $1.1 $0.6 growth in the UK, with numerous companies sprouting $13.1 $20.9 $50.9 $20.1 KPMG in the UK $0 0 ” up; in H1’21, Zilch raised $81 million, while Butter raised Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 $22 million. During H1’21, a government review 2018 2019 2020 2021 recommended BNPL products be regulated — which could affect the space in the future.30 Deal value ($B) Deal count — Fintech areas to watch in the UK include revenue- Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 based financing for SMEs and ESG solutions related to June 2021. financial inclusion, carbon tracking and offsets.

30 https://www.cnbc.com/2021/02/02/uk-to-regulate-buy-now-pay-later-bnpl-firms-like-klarna-and-clearpay.html #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 47 Regional insights — EMEA: Germany Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Fintech investment in Germany surpasses $2.5 billion in H1’21

— VC investment in Germany skyrocketed in Total fintech investment activity (VC, PE and M&A) in Germany Fintechs in Germany are H1’21, led by a $900 million raise by 2018–2021* now taking their products wealthtech Trade Republic, a $650 million raise $2,500 45 and services to the next by digital insurer Wefox and $100 miillion+ 39 40 level. Many started by raises by Scalable Capital, Mambu and “ developing front-end Solarisbank. $2,000 35 technologies — which had — Both digital banking and digital insurance 30 them focusing mostly on 30 28 continue to be hot areas of investment in 29 marketing and product $1,500 27 27 24 Germany, due, in part, to the growing 25 front-end (using banking 24 23 acceptance of digital business models by 22 and payment as a service) 20 20 20 20 consumers. 19 acquisitions. Now, we’re $1,000 seeing them move into — Wealthtech companies, particularly trading 15 platforms such as Trade Republic, are gaining regulated areas in order 10 to better compete with a lot of attention from investors in Germany, $500

$337.1 banks — which means who see the space as one that will likely grow $311.0 $291.4 $260.0 $218.7

$189.2 5 they are focusing more on significantly in the future. $167.0 $82.7 $1,149.2 $2,220.1 $346.2 $488.0 $357.3 $957.7 building their regulatory — Looking forward, the crypto and digital asset $0 0 infrastructure and building Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 space will be one area to watch in Germany — out their products. not only in terms of trading platforms, but also 2018 2019 2020 2021 solutions focused on other areas of the value Deal value ($M) Deal count Bernd Oppold Partner, Advisory, chain. KPMG in Germany Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021. ”

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France sees $2 billion in fintech investment during H1’21 as fintech market keeps evolving

— The fintech market in France has evolved very rapidly Total fintech investment activity (VC, PE and M&A) in France Historically, it has been over the past couple of years, with numerous fintechs 2018–2021* difficult for insurance attracting larger deals; in H1’21, Ledger raised $380 $10,000 40 companies to really million, PE firm AnaCap bought 60% of Market Pay for 37 $9,000 innovate and develop new $363 million, Shift Technology raised $220 million, and 35 “ products and services. Alan raised $219 million. $8,000 To better accelerate — Fintech investors in France are focused on a wide range 30 30 innovation, these of opportunities, including insurtech, B2B services, $7,000 27 incumbents are investing cybersecurity, and ‘buy now, pay later’ offerings. 25 25 25 a lot in insurtechs that can $6,000 23 — Digital banks in France have focused significantly on 22 help them improve their building partnerships with other fintechs, such as credit- $5,000 20 customer experience or 19 18 as-a-service or payment-as-a-service partners to 18 18 18 expand their service $4,000 offerings into other areas improve their capabilities and better serve their clients. 15 15 In H1’21, Orange Bank announced a partnership with 14 of financial services. $3,000 Younited to boost its consumer credit offerings.31 10 Stephane Dehaies Associate Partner, Management $2,000 — The French government is very focused on fintech as a Consulting, FSI,

$1,130.6 ” growth opportunity and is committed to a range of KPMG in the UK

$903.2 5 ecosystem support activities, including education to $1,000 $358.1 $47.6 $59.5 $82.9 $155.3 $107.8 $133.6 $117.2 $204.8 $108.7 $9,416.6 develop talent with essential fintech capabilities. $1,481.1 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 Deal value ($M) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

31 https://www.fintechfutures.com/2021/06/orange-bank-partners-younited-to-underpin-consumer-credit-boost/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 49 Regional insights — EMEA: Nordics / Sweden Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Klarna powers Nordic region to new VC investment high of $2 billion

— The $4.8 billion in total fintech investment in the Total fintech investment activity (VC, PE and M&A) in Sweden Nordics was primarily driven by three deals in Sweden: 2018–2021* The Nordic region — and the $2.6 billion acquisition of trading platform company $3,500 25 Sweden in particular — is Itiviti by Broadridge Financial Solutions32 and two a good incubator for new 22 funding rounds totaling $1.9 billion by Sweden-based $3,000 “ types of fintech ‘buy now, pay later’ company Klarna. 20 innovations, apps and $2,500 solutions. Sweden is — The M&A market in the Nordic region was incredibly 17 17 robust in H1’21. In addition to the completed Itiviti heavily influenced 15 15 culturally by the US for acquisition, open banking platform Tink acquired $2,000 14 14 Germany-based open banking platform 13 example, so if you test 12 33 something in Sweden and FinTecSystems. Shortly thereafter, Visa announced $1,500 11 its acquisition of Tink for $2.1 billion — in a deal subject 10 10 it works, then it’s fairly 9 to regulatory approval.34 easy to roll out in other $1,000 7 7 — Sweden, which has the most mature fintech ecosystem 6 markets with confidence. 5 in the Nordic region, attracted the majority of fintech $500 Martin Ekstedt $346.6

$290.2 Partner, Corporate Finance

investment during H1’21. The largest deals in the other $209.0 $233.4

$85.6 KPMG in Sweden $2,188.2 $8.8 $1,375.5 $3,230.2 $21.9 Nordic countries included Norway-based Arcane $899.0 $817.0 $704.4 $488.3 ” Crypto’s $33 million SPAC merger with Vertical $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Ventures AB,35 a $25 million raise by Finland based Tesseract and a $23 million raise by Kompasbank in 2018 2019 2020 2021 Denmak. Deal value ($M) Deal count

— Looking ahead, the SME sector in the Nordic region Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as could see some consolidation given the number of of 30 June 2021. small companies with good technologies behind them. There could also be more cross-border M&A activity. 32 https://www.itiviti.com/news/broadridge-completes-acquisition-of-itiviti-extending-capital-markets-franchise 33 https://tink.com/press/tink-acquires-fintecsystems/ 34 https://www.forbes.com/sites/iainmartin/2021/06/24/visa-buys-swedish-fintech-tink-for-21-billion-after-plaid-takeover-blocked/?sh=48028f0b115f 35 https://www.finextra.com/pressarticle/86049/arcane-crypto-finalises-nasdaq-listing #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 50 Regional insights — EMEA: Ireland Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Ireland sees incredible start to the year with almost $900 million in total fintech investment

— Ireland attracted $900 million of fintech investment in Total fintech investment activity (VC, PE and M&A) in Ireland COVID-19 has accelerated H1’21 — far surpassing the $700 million previous record 2018–2021* phenomenally the digitization set in 2011. Three large deals drove investment levels: the $1,000 12 of businesses and business $600 million buyout of Fenergo by PE firms Astorg and $900 11 10 models. That offers huge Bridgepoint,36 the $200 million acquisition of Taxamo by 10 10 10 “ $800 9 opportunities for fintech Vertex, and the $74 million VC raise by Wayflyer. 9 $700 8 businesses and to the — Investor interest in regtech is particularly strong right now, 8 8 constituent elements of as evidenced by the Fenergo deal and it’s only expected $600 6 7 fintech. Payments is a good to grow over the next few years given the changing $500 6 6 6 6 example. Throughout 2020, regulations in financial services. we saw consumers give up $400 cash almost entirely, — Many of the fintechs in Ireland are globally focused, 4 making them very attractive to global investors. Wayflyer, $300 embracing alternative 3 payment methods. This for example, provides finance for merchants and other $200 2 acceleration to digital first partners to accelerate their growth over the internet, while $97.5 $74.4 $100 $54.5 $73.6 $52.6 $45.6 and the opportunities it

Taxamo is focused on helping clients meet their global tax $30.2 $0.7 $4.7 $7.4 $16.5 $12.4 $890.4

. $167.7 compliance obligations. $0 0 creates for fintech Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 businesses has undoubtedly — Digital banks have started to gain some traction in Ireland, 2018 2019 2020 2021 driven a lot of the interest particularly Revolut and N26. Increased competition from Deal value ($M) Deal count and investment in the fintech challenger banks is certainly putting pressure on the pillar space in 2021. banks in Ireland who have responded and are invest very Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of Anna Scally heavily in their own digital infrastructure. This healthy 30 June 2021. Partner and Fintech Leader, competition is good for consumers and business KPMG in Ireland ” customers alike.

36 https://www.fenergo.com/press-releases/astorg-and-bridgepoint-acquire-financial-software-company-fenergo/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 51 Regional insights — EMEA: Saudi Arabia Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Saudi Arabia sees first $100 million+ fintech VC round

— The fintech market in Saudi Arabia is in startup mode, with a Total fintech investment activity (VC, PE and M&A) in Saudi Arabia growing number of fintechs attracting attention — primarily at 2018–2021* There is a lot of diversity in the sandbox program. the earliest of deal stages. In H1’21, Saudi Arabia saw its $300 8 largest Seed round ever in January 2021: a $6 million raise by While the majority are payments-focused ‘buy now, pay later’ company Tamara. Tamara followed this 7 7 “ with Saudi Arabia’s first $100 million VC round in April: a $110 $250 fintechs, we are also million Series A raise led by Checkout.com.37 seeing fintechs focused on 6 remittances, point-of-sale — The Saudi Central Bank (SAMA)’s fintech sandbox has been a $200 devices, small mom and major driver for innovation, allowing fintechs the opportunity to 5 pop stores offering digital test their new digital solutions; a number of early sandbox payments. Tamara is a participants are now starting to mature. $150 4 sandbox success story. — Banks in Saudi Arabia are now working to step up their game, The buy-now-pay-later 3 partnering with fintechs in order to digitize their services — 3 company has evolved $100 rapidly and recently raised such as Banque Saudi Fransi’s partnership with Hala to offer 2 its customers a digital wallet on their mobile phones. 2 2 2 $110 million.

— Saudi Payments operates a national payments system. $50 1 1 Ovais Shahab 1 1 1 1 Head of Financial Services They’ve been very active in connecting all the dots between $23.9 KPMG in Saudi Arabia $12.5 ” $2.6 $50.0 $3.5 $2.1 incumbent banks, fintechs and consumers. 0 $266.3 $112.7 $0 0 0 0 0 — Over the next 6 months, fintechs will continue to evolve and Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 grow, particularly in payments, remittances and microfinancing. 2018 2019 2020

Deal value ($M) Deal count

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

37 https://english.alarabiya.net/business/economy/2021/04/22/Checkout-com-leads-110million-round-for-Saudi-buy-now-pay-later-startup-Tamara #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 52 Regional insights — EMEA: United Arab Emirates Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Investor interest in the UAE spurred by $800 million PE deal in Abu Dhabi

— The UAE reached the EMEA top 10 fintech deals list with an Total fintech investment activity (VC, PE and M&A) in UAE Accelerators and events $800 million PE investment by Silverlake into Abu Dhabi- 2018–2021* are an important part of based Group 42 — an AI driven cloud computing companies $900 14 13 building up the fintech that focuses on digitization of businesses.38 $800 “ ecosystem in the UAE. — The digital bank space got some attention in H1’21 with the 12 H1’21 saw some interesting announcement of the upcoming launch of Zand — the UAE’s $700 developments in this area. first independent digital bank. 10 The Ministry of Economy $600 — International interest in the UAE continued to grow, with both and the Securities and Ireland-based regtech company DX Compliance39 and US- Commodities Authority $500 8 8 8 8 based payments firm Stripe40 launching operations in the UAE launched a Fintech 7 7 7 Megathon to help during H1’21. $400 6 6 6 reimagine financial services — During H ’21, the Financial Services Regulatory Authority of 1 5 5 in the UAE. UAE the ADGM introduced a framework to regulate open banking $300 4 technology ecosystem Hub platforms in order to enhance consumer data protections.41 71 and US based Modus $200 3 — Looking forward, investment in payments and contactless 3 Capital also launched technologies is expected to remain strong in the UAE. Investor 2 2 Ventures Lab — a program

$100 $72.5 $55.9

interest in Islamic finance focused startups, such as Shariah $30.7 aimed at helping early $20.0 $1.5 $9.8 $0.2 $0.6 $3.1 $6.1 $18.0 $11.7 $14.1 $845.5 compliant fintechs, is expected to grow over the next few $0 0 stage founders build viable quarters. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 products. 2018 2019 2020 2021 Gonçalo Traquina Deal value ($M) Deal count Partner, Advisory KPMG in the Lower” Gulf

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 38 https://www.wsj.com/articles/silver-lake-invests-about-800-million-for-minority-stake-in-abu-dhabis-g42-11618394401 30 June 2021. 39 https://dxcompliance.com/dx-compliance-launches-new-regtech-location-in-the-uae/ 40 https://stripe.com/newsroom/news/stripe-launches-uae 41 https://www.thenationalnews.com/business/banking/adgm-unveils-framework-to-regulate-open-banking-platforms-1.1195405 #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 53 Regional insights — EMEA: Israel Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Q2’21 sees record level of fintech investment in Israel

— Total fintech investment in Israel reached $240 million in H1’21, Total fintech investment activity (VC, PE and M&A) in Israel including a record $188 million in Q2’21. During the quarter, both 2018–2021* Israel’s fintech sector Earnix and Melio attained unicorn status. $200 16 continues to grow and attract attention, with a $180 14 — Insurtech attracted a significant amount of attention during 14 14 14 “ number of exciting H1’21, with the successful IPOs of Libra Insurance Company on $160 developments in H1’21, the Israeli Stock Exchange and WeSure on the Tel Aviv Stock 12 including TipRanks’ $77 Exchange. $140 11 11 million Series B VC raise 10 and two successful IPOs in — During H1’21, insurtech WeSure announced the acquisition of a $120 the insurtech space local traditional insurer. Acquisitions by maturing fintechs are expected to grow in Israel over time. $100 8 8 8 Looking ahead, interest in 7 7 7 digital banking and open $80 — The first stage of Israel’s open banking regime began in H1’21, 6 6 banking will likely grow

with banks required to share information on customer chequing $60 5 given Israel’s evolving accounts when requested by the customer; This, combined with 4 4 4 open banking regime and future open banking initiatives, is expected to drive increased $40 the government’s efforts to investment in fintechs able to support open banking offerings. 2 increase competition in the $20

$9.9 banking space. $57.8 $60.0 $23.9 $40.8 $24.9 $64.4 $2.8 $1.5 $40.0 $3.4 $56.4 — In H1’21, Israel’s saw the launch of The First Digital Bank – the $141.9 $188.2 $0 0 Ilanit Adesman country’s first new bank in over 40 years. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Partner, Financial Risk Management, 2018 2019 2020 2021 KPMG in Israel ” Deal value ($M) Deal count

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 54 EMEA Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Top 10Top global 10 fintech fintech deals deals in in EMEA 2020 in H1 2021

1. Refinitiv — $14.8B, London, UK — Institutional/B2B — M&A 2. Itiviti Group — $2.6B, Stockholm, Sweden — Institutional/B2B — M&A 3. Paysafe Group — $1.45B, London, UK — Payments/transactions — Reverse merger 4 4. Klarna — $1.29B, Stockholm, Sweden — Payments/transactions — Later 10 2 VC 7 1 6 5. Nutmeg — $989.4M, London, UK — Wealth/investment management — 5 8 M&A 3 6. Trade Republic — $900M, Berlin, Germany — Payments/transactions — Series C

7. GoCo Group — $818.35M, Newport, UK — Consumer — M&A

8. Mollie — $805.8M, Amsterdam, Netherlands — Payments/transactions — 9 Series C

9. Group 42 — $800M, Abu Dhabi, UAE — Institutional/B2B — PE Growth

Source: Pulse of Fintech H1’21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 10. LendInvest — $681.4M, London, UK — Lending — Later VC 30 June 2021.

#fintechpulse

55 Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

In H1 2021, fintech companies in Asia Pacific received $7.5B with 467 deals

#fintechpulse

56 Regional insights — ASPAC Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Fintech investment in Asia-Pacific rises to $7.5 billion in H1’21 Total fintech investment and deals activity in the Asia-Pacific region saw a solid rebound in the first half of 2021. After falling to $4.7 billion across 357 deals in H2’20, H1’21 saw $7.5 billion in investment across 467 deals. While both deal volume and value remained well shy of the record $25 billion across 504 deals seen in H1’18, the increased activity — particularly without any very large megadeals — is a positive sign for continued fintech investment in the region. Key H1’21 highlights from the Asia-Pacific region include:

Platform focus remains incredibly strong in Asia-Pacific ‘Buy now, pay later’ offerings growing quickly Platform players with strong fintech offerings continue to be very hot in the Asia- The payments space was incredibly robust across the Asia-Pacific region in H1’21, Pacific region, with many working to build their breadth, reach and market share. with the ‘buy now, pay later’ space considered to be one of the fastest-growing Indonesia-based Gojek raised $300 million in H1’21, while also announcing a merger subsectors. with eCommerce platform Tokopedia for $18 billion to create GoTo Group. Unbanked and underbanked seen as tremendous opportunity Jurisdictions taking very different approaches to crypto Investors continue to see significant opportunities across the Asia-Pacific region to Across the Asia-Pacific region, jurisdictions continued to take very different better reach unbanked and underbanked. In India, for example, a number of fintech approaches to cryptocurrencies and crypto exchanges. In H1’21, China banned banks unicorns are working to become the core player between an individual and banking, from providing cryptocurrency-related services,42 whereas Hong Kong’s Financial insurance, or wealth management offerings. Services and the Treasury Bureau recommended all virtual asset exchanges in Hong Kong (SAR, China) be licensed and limited with professional investors. Trends to watch for in H2’21 — A major increase in investment in H2’21, driven by the anticipated closure of Interest in SPACs increasing Grab’s SPAC merger and Gojek’s merger with Tokopedia Given the explosion of US-based SPACs in recent quarters, startups — including — US SPACs looking for targets in the Asia-Pacific region mature fintechs — in the Asia-Pacific region are expected to gain more interest from US-based SPACs looking to make deals. During H1’21, Singapore-based super app — increasing investment in insurtech, wealthtech, and B2B services company Grab announced the largest SPAC merger ever: a $40 billion deal with US- — big techs and platform providers continuing to expand into or across financial 43 based Altimeter Growth Corp, which is expected to be finalized in H2’21. services.

42 https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business. 43 https://www.cnn.com/2021/04/13/investing/grab-altimeter-us-spac-ipo-intl-hnk/index.html #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 57 Regional insights — ASPAC Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Investment levels on pace to normalize along approximate tallies from 2020

Total investment activity (VC, PE and M&A) in fintech in Asia Pacific Venture activity in fintech in Asia Pacific 2018–2021* 2018–2021* $50 1,200 1,050 $40 937 1,000 1,000 $40 815 733 800 $30 714 800 640 $30 600 600 $20 $20 467 430 400 400 $7.5 $10 $6.5 $10 200 200 $38.2 $24.6 $13.4 $32.4 $13.6 $10.6 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($B) Deal count

M&A activity in fintech in Asia Pacific PE growth activity in fintech in Asia Pacific 2018–2021* 2018–2021* $12 93 100 $2,500 25 20 $10 80 $2,000 20 65 17 17 $8 57 60 $1,500 15 $6 40 $1,000 10 $4 10 $1.7 27 $2 20 $500 5 $3.8 $9.9 $0.3 $2,002.0 $1,104.4 $1,056.5 $682.7 $0 0 $0 0 2018 2019 2020 2021* 2018 2019 2020 2021* Deal value ($B) Deal count Deal value ($M) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 58 Regional insights — ASPAC Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Relative to historical trends, venture deal sizes remain subdued

VC activity in fintech with corporate participation in Asia Pacific Interestingly, the late-stage financing size has declined over the past few years, with a 2018–2021* slight tick upward in 2021’s first half to reach $20.0 million. What this likely suggests, $30 350 291 when analyzed in concert with the trends in financing sizes at earlier stages, is that the $25 300 250 228 degree of competition has grown more mild over the past several years, given that 250 $20 200 global dry powder figures remain quite elevated. Investors are still willing to broker $15 161 150 deals at strong valuations for companies, but not to quite the same extent they did in $10 100 the past. Part of that is due also to declining corporate participation in the ecosystem, $5 $2.8 50 at least at the yearly level thus far, in terms of aggregate deal value in which corporate $24.9 $10.3 $7.6 $0 0 players participate. Long key to the ASPAC fintech ecosystem, corporates and their 2018 2019 2020 2021* venture arms have pulled back somewhat in terms of financing participation when it Deal value ($B) Deal count comes to fintech, given the degree of consolidation and emergence of clear category leaders across countries and even regions. Median venture deal sizes ($M) by stage in fintech in Asia Pacific 2018–2021*

$27.0 $23.5 $20.0 $16.4

$7.7 $6.2 $7.0 $6.0

$1.2 $1.2 $1.4 $1.9

2018 2019 2020 2021* Angel & seed Early VC Later VC

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 59 Regional insights — ASPAC Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Deal-making ticks back upward after subdued period

Total investment activity (VC, PE and M&A) in fintech in Asia Pacific M&A in fintech in Asia Pacific 2018–2021* 2018–2021* $18 350 $4 30

$16 300 $3 288 292 25 25 $14 23 23 258 250 $3 22 231 $12 214 236 20 217 205 18 200 $2 $10 212 180 182 16 16 179 16 15 177 175 15 15 15 $8 14 M&A activity in fintech in Asia Pacific 150 $2 13 2018–2021* 11 $6 10 100 $1 $4 5 50 $1 $2 $0.2 $0.2 $0.2 $0.1 $0.1 $17.0 $8.9 $5.0 $7.4 $4.5 $5.0 $5.7 $9.4 $6.2 $2.4 $1.9 $2.9 $2.8 $4.7 $0.6 $2.0 $1.0 $2.5 $3.2 $3.2 $1.0 $0.5 $1.0 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021

Deal value ($B) Deal count Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 60 Regional insights — ASPAC Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Venture financing volume resurges, borne by increased corporate participation

Venture activity in fintech in Asia Pacific VC activity in fintech with corporate participation in Asia Pacific 2018–2021* 2018–2021* $18 300 $18 100 93 89 $16 266 $16 90 254 250 80 $14 233 $14 75 215 77 72 215 70 $12 200 $12 67 198 194 66 66 184 181 60 162 165 58 58 $10 $10 57 55 160 159 154 150 50 48 49 $8M&A activity in fintech in Asia Pacific $8 2018–2021* 40 $6 100 $6 30

$4 $4 20 50

$2 $1.8 $1.4

$2 $1.4

$1.1 10 $1.0 $1.0 $1.1 $0.9 $0.7 $8.6 $2.8 $2.0 $8.3 $5.3 $2.0 $3.8 $2.7 $1.8 $4.8 $16.3 $6.1 $2.1 $7.6 $4.3 $15.3 $1.6 $1.5 $1.7 $0 0 $0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2018 2019 2020 2021 Deal value ($B) Deal count Angel & seed Early VC Later VC Deal value ($B) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 61 Global insights | Fintech segments | Featured interview | Spotlight article Regional insights Regional insights — ASPAC: Mainland China and Hong Kong (SAR)

China attracts $1.3 billion in fintech investment in best result since H2’19 China’s fintech market is incredibly — Fintech investment in China increased from $900 million in H2’20 to over Total fintech investment activity (VC, PE and M&A) in mature next to many other jurisdictions, $1.3 billion in H1’21. mainland China 2018–2021* with investments in areas like payments really taking off a few years ago and a — China did not see any mega VC deals in H1’21, however, the $100 million+ VC $18,000 160 134 “number of clear leaders emerging. Now $16,000 133 deals that occurred highlight the growing diversity of fintech startups attracting 136 140 $14,000 what we’re seeing isn’t megadeals in funding. In H1’21, medical payments company MediTrust Health raised $155 120 those very mature areas, but rather an million, wealthtech WeBull raised $150 million, asset data management firm $12,000 100 increasing number of smaller deals Xuncetech raised $108 million, and B2B solutions provider XforcePlus raised $10,000 85 76 80 focused on less mature sectors of $100 million. $8,000 64 65 60 fintech — like B2B services, wealthtech, $6,000 61 52 — While tightening controls over crypto, China also expanded its central bank digital 49 46 and insuretech.

$3,936.8 34 43 40 currency pilot project in H1’21 to include some salary payments in the Xiong’an $4,000 $3,299.9 $2,760.6 Andrew Huang New Area,44 subway fare payments in Beijing,45 and exchanges between digital $2,000 20 $15,664.9 $706.9 $576.8 $947.0 $432.9 $538.6 $226.8 $673.0 $652.9 $700.4

$5,121.3 Partner and Fintech Leader, 46 and physical currencies at two Beijing-based banks. $0 0 KPMG China Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ” — In H1’21, financial regulators in China ordered a number of platform companies 2018 2019 2020 2021 with financial services offerings to enhance their regulatory compliance.47 Deal value ($M) Deal count Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data Hong Kong (SAR, China) has provided by PitchBook), *as of 30 June 2021. become a center and talent pool for Hong Kong (SAR, China) set to adjust virtual asset exchange licensing rules blockchain and crypto in Asia. It’s an incredibly hot space for investment — — The introduction of digital bank licenses has caused some of the more established banks in Hong Kong (SAR, China) to up their game in terms of “ and I expect to see significant M&A the user interface that they offer and the value propositions and how they go to market. activity as CeFi players look to — Cryptocurrencies and crypto exchanges continued to attract attention in Hong Kong (SAR, China), with raises by Amber Group ($100 million) and acquisitions to expand capabilities, Babel Finance ($40 million) in H1’21. Hong Kong (SAR, China) has also seen increasing interest in the entire blockchain ecosystem from VC funds and investors seek to tap into one of and family offices. the most exciting and fastest growing — While licensing of crypto exchanges is currently ‘opt-in’ based, during H1’21, the Hong Kong Financial Services and the Treasury Bureau found that all asset classes.

virtual asset exchanges should be licensed with services restricted to professional investors. Regulations to enact these rules are expected over the next Barnaby Robson year. This could affect crypto investments over the medium term and also Hong Kong’s (SAR, China) status as a center for blockchain in Asia.48 Partner, Deal Advisory,

44 https://www.coindesk.com/china-cbdc-wage-pilot KPMG China 45 https://bitcoinist.com/after-chasing-off-bitcoin-miners-china-launches-new-test-for-digital-yuan/ 47 https://www.cnbc.com/2021/04/14/chinese-tech-stocks-rally-after-regulatory-compliance-pledge.html ” 46 https://www.pymnts.com/cryptocurrency/2021/china-owned-commercial-bank-allows-digital-yuan-to-cash-conversions-at-atms/ 48 https://www.reuters.com/technology/hong-kong-restrict-crypto-exchanges-professional-investors-2021-05-21/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 62 Regional insights — ASPAC: Australia Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Australia off to a solid start with almost $900 million in fintech investment

— Australia saw a solid start to the year, with $890 million Total investment activity (VC, PE and M&A) in fintech in Australia 2018–2021* There’s a lot happening in in fintech investment in H1’21, including National $1,400 25 the fintech sector in Australia Bank’s $170 million acquisition of digital bank 23 Australia — between 86 400 and $100 million raises by payments firm 21 $1,200 21 payments, digital banking, Airwallex and green energy focused POS credit and 21 20 21 “ 19 20 20 and banking-as-a-service sales provider Brighte. 19 $1,000 solutions. Corporates were — In addition to open banking, digital banking, payments, 16 very active in H1’21, and B2B services, Australia saw rising interest in the 15 $800 14 14 focusing on building out digital mortgage space; in H1’21, Athena Home Loans their capabilities and their 12 12 raised $90 million. $600 offerings in order to provide 10 — Interest in banking-as-a-service solutions continued to a broader range of grow in Australia. In H1’21, incumbent bank Westpac $400 solutions to their clients, particularly SMEs and kept moving forward with its development of a BaaS 5

model in partnership with UK-based fintech 10x, $200 $170.6 $158.0 merchants. $101.4 announcing a partnership with ID-focused regtech Ian Pollari $224.7 $233.5 $378.9 $636.9 $431.9 $377.0 $396.6 $323.0 $562.9 $1,187.9 $1,047.0 FrankieOne to facilitate seamless onboarding.49 $0 0 Global Co-Leader of Fintech, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Partner and National” Banking Leader, — Several of Australia’s big banks have focused on KPMG Australia 2018 2019 2020 2021 investing in ecosystem and vertical players in order to Deal value ($M) Deal count simplify and enhance the experience of SMEs and Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of merchants; during H1’21, Commonwealth Bank 30 June 2021. invested $20 million in Amber Energy as part of a partnership to provide access to wholesale energy process to its customers.50

49 https://www.afr.com/companies/financial-services/westpac-expands-banking-as-a-service-diverging-from-cba-strategy-20210326-p57eau 50 https://reneweconomy.com.au/energy-retail-upstart-amber-gains-new-funds-and-customer-base-in-cba-deal/ #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 63 Regional insights — ASPAC: Singapore Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Grab announces $40 billion SPAC merger in Singapore

— Fintech investment dropped somewhat in Total fintech investment activity (VC, PE and M&A) in Singapore Singapore, from $930 million in H2’20 to 2018–2021* It is all about platforms here in South East Asia targeting $614 million in H1’21; eWallet company $6,000 45 Matchmove raised $100 million in inclusion, sustainability, “ e-commerce and efficient Singapore’s largest deal of the quarter. 40 40 $5,000 access to finance. Through — During H1’21, platform giant Grab 33 35 this we are seeing the announcing a $40 billion SPAC merger — 31 32 31 32 beginning of a redrawing of setting the stage for a big end to the year. $4,000 30 30 29 Financial Services, 28 — The four digital banks that received licenses 26 supported by the opening up 25 in Singapore were quiet in H1’21, focusing on 24 of data by regulators, central $3,000 building out their operations and products; 22 banks and the cloud 20 Singapore’s incumbent banks also focused 19 19 providers. significantly on their digital products and $2,000 15 Anton Ruddenklau value propositions. Global Co-Leader of Fintech, 10 Partner and Head” of Financial Services — During H1’21, the Green Finance Industry Advisory, $1,000 Taskforce of the Monetary Authority of KPMG in Singapore $593.9 5 $331.1 $343.7 $286.2 $254.5

Singapore announced a number of initiatives $283.1 $170.4 $153.7 $198.0 $134.5 $168.1 $2,543.0 $5,014.7 $1,021.4 focused on accelerating green finance, $0 0 including issuing a guide for climate-related Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 disclosures, a framework for green trade 2018 2019 2020 2021 finance, and recommendations and a Deal value ($M) Deal count roadmap to scale green finance in a number of key sectors.51 Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

51 https://www.mas.gov.sg/news/media-releases/2021/accelerating-green-finance #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 64 Regional insights — ASPAC: India Global insights | Fintech segments | Featured interview | Spotlight article Regional insights

Big start to 2021 as India attracts over $2 billion in fintech investment

— India almost matched its total fintech investment in 2020, with Total fintech investment activity (VC, PE and M&A) in India 2018–2021* Exits in India are going to $2 billion in investment in H1’21, including merchant platform $2,500 80 increase, both in terms of Pine Labs’ $285 million PE funding round and $100 million+ IPOs and in terms of VC funding rounds by Cred ($215 million), RazorPay ($160 acquisitions. On the M&A million), KreditBee ($153 million), OfBusiness ($110 million), 68 70 “ front, fintechs could be and BharatPe ($108 million). $2,000 targeted by banks, larger — Digital banking was a big play in India, but with a unique 60 fintechs or even a fintech 55 model compared to other jurisdictions in the regions — with 53 services conglomerate. Over digital banks acting primarily as SaaS providers and 50 the next 12 months, we $1,500 45 44 44 regulatory responsibility remaining with bank partners. 45 45 46 expect leading fintech 41 — Early fintech leaders in India have continued to expand their 40 40 unicorns trying to tap into the business models into adjacencies in order to bring their 35 35 strong capital market by $1,000 looking at an IPO. Banks are customers more value, such as payments players acquiring 30 insurtechs. 27 also keen to partner with Fintechs especially Neo — Insurtech is a growing area of interest for investors in India; in 20 Banks and Wealthtech $500 H1’21, several insurtechs raised mid-sized VC or PE funding platforms. rounds, including Turtlemint ($46 million), RenewBuy ($45 10 million), and Digit Insurance ($18 million). $179.8 Sanjay Doshi Partner and Head of Financial $434.5 $647.3 $756.8 $371.6 $335.4 $536.8 $701.4 $461.2 $430.0 $652.2 $2,014.2 $1,182.6 $1,402.8 $0 0 Services Advisory,” Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 KPMG in India 2018 2019 2020 2021 Deal value ($M) Deal count

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 65 Asia Pacific Global insights | Fintech segments | Featured interview | Spotlight article Regional insights Top 10Top global 10 fintechfintech deals deals in in Asia 2020 Pacific in H1 2021

1 9 1. Toss (Financial Software) — $410M, Seoul, South Korea — Payments/transactions — 3 Later VC 4 2. Gojek — $300M, Jakarta, Indonesia — Payments/transactions — Later VC 5 8 PE growth 10 7 3. Pine Labs — $285M, Noida, India — Payments/transactions — 4. CRED (Financial Software) — $215M, Mumbai, India — Payments/ 2 transactions — Series D 5. Mynt — $175M, Taguig, Philippines — Payments/transactions — Later VC 6. 86 400 — $170.3M, Sydney, Australia — Banking — M&A 7. Voyager Innovations — $167M, Mandaluyong City, Philippines — 6 Payments/transactions — PE growth 8. Razorpay — $160M, Bengaluru, India — Payments/transactions — Series E 9. MediTrust Health — $154.6M, Shanghai, China — Payments, insurtech — Series B 10. KreditBee — $153M, Bengaluru, India — Lending — Series C

Source: Pulse of Fintech H1'21, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2021.

#fintechpulse

66 About us Global insights | Fintech segments | Featured interview | Spotlight article | Regional insights

KPMG’s Global Fintech practice The financial services industry is transforming with the emergence of innovative new products, channels and business models. This wave of change is driven primarily by evolving customer expectations, digitalization as well as continued regulatory and cost pressures.

KPMG firms are passionate about supporting clients to successfully navigate this transformation, mitigating the threats and capitalizing on the opportunities.

KPMG Fintech professionals include partners and staff in over 50 fintech hubs around the world, working closely with financial institutions and fintech companies to help them understand the signals of change, identify the growth opportunities and to develop and execute their strategic plans.

Visit home.kpmg/fintech

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Get in touch with us Ian Pollari John Armstrong Global Co-Leader of Fintech, Partner and National Industry Leader, Financial Services, Partner and National Banking Leader, KPMG Australia KPMG in Canada E: [email protected] E: [email protected]

Anton Ruddenklau Stéphane Dehaies, Associate Partner, Management Consulting, FSI Global Co-Leader of Fintech, KPMG in the UK Partner and Head of Financial Services Advisory, E: [email protected] KPMG in Singapore E: [email protected] Andrew Huang Partner and Fintech Leader, KPMG China Chris Hadorn E: [email protected] Global Head of Payments, Principal, Financial Services, KPMG in the US Anna Scally E: [email protected] Partner and Fintech Leader, KPMG in Ireland E: [email protected] John Hallsworth Partner, Open Banking Lead, Ilanit Adesman KPMG in the UK Partner, Financial Risk Management, KPMG in Israel E:[email protected] E: [email protected]

Fabiano Gobbo Gary Chia Global Head of Regtech, Partner and ASEAN Financial Services Regulatory and Compliance Partner, Risk Consulting, KPMG in Italy Practice Leader, KPMG in Singapore E: [email protected] E: [email protected]

Gary Plotkin Bob Ruark Global Insurtech Leader, Principal, Financial Services Strategy and Fintech Leader, Principal and Insurance Management Consulting Leader, KPMG in the US KPMG in the US E: [email protected] E: [email protected] #fintechpulse ©2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 68 About the report Global insights | Fintech segments | Featured interview | Spotlight article | Regional insights

Acknowledgements

We acknowledge the contribution of the following individuals across KPMG member firms who assisted in the development of this publication:

— Ian Pollari, Global Co-Leader of Fintech, Partner and National Banking Sector Leader, KPMG Australia — Andrew Huang, Partner and Fintech Leader, KPMG China — Anton Ruddenklau, Global Co-Leader of Fintech, Partner and Head of Financial — Charles Jacco, Americas Cyber Security Services, Financial Services Leader Services Advisory, KPMG in Singapore and Principal, KPMG in the US — Ilanit Adesman, Partner, Financial Services Risk Management and Insurtech — Pat Kneeland, Manager, Innovation & Enterprise Solutions, KPMG in the US Lead, KPMG in Israel — Bernd Oppold, Partner, KPMG in Germany — John Armstrong, Partner and National Industry Leader, Financial Services, KPMG in Canada — Bill Packman, Partner and Wealth Management Consulting Lead, KPMG in the UK — Spencer Burness, Director, Advisory Services, KPMG in the US — Laszlo Peter, Head of Blockchain Services, Asia Pacific, KPMG Australia — Gary Chia, Partner and ASEAN Financial Services Regulatory and Compliance Practice Leader, KPMG in Singapore — Gary Plotkin, Global Insurtech Leader, Principal and Insurance Management Consulting Leader, KPMG in the US — Stéphane Dehaies, Partner, Financial Services Management Consulting, KPMG in the UK — Barnaby Robson, Partner, Deal Advisory, KPMG China — Sanjay Doshi, Partner and Head of Financial Services Advisory, KPMG in India — Robert Ruark, Principal, Financial Services Strategy and Fintech Leader, KPMG in the US — Martin Ekstedt, Partner, Corporate Finance, KPMG in Sweden — Anna Scally, Partner and Fintech Leader, KPMG in Ireland — Fabiano Gobbo, Global Head of Regtech, Risk Consulting Partner, KPMG in Italy — Ovais Shahab, Head of Financial Services, KPMG in Saudi Arabia — Chris Hadorn, Global Head of Payments, Principal, Financial Services, KPMG in — Gonçalo Traquina, Partner, Advisory KPMG in the Lower Gulf region the US — John Hallsworth, Partner, Open Banking Lead, KPMG in the UK

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Methodology

The underlying data and analysis for this report (the “Dataset”) was provided by PitchBook Data, Inc the investors and/or press release state that a round is a seed financing, or it is for less than $500,000 and is (“PitchBook”) on 7 July 2021 and utilizes their research and classification methodology for transactions as the first round as reported by a government filing, it is classified as such. If angels are the only investors, then a outlined on their website at https://help.pitchbook.com/s/. The Dataset used for this report considers the round is only marked as seed if it is explicitly stated. following investment transactions types: Venture Capital (including corporate venture capital) (“VC”), private Early-stage VC: Rounds are generally classified as Series A or B (which PitchBook typically aggregates equity (“PE”) Investment and Mergers and Acquisitions (“M&A”) for the FinTech vertical within the underlying together as early stage) either by the series of stock issued in the financing or, if that information is unavailable, PitchBook data. Family and friends, incubator and accelerator type funding rounds are excluded from the by a series of factors including: the age of the company, prior financing history, company status, participating Dataset. investors and more. Due to the private nature of many of the transactions, the Dataset cannot be definitive, but is an estimate Late-stage VC: Rounds are generally classified as Series C or D or later (which PitchBook typically based on industry leading practice research methodology and information available to PitchBook at 7 July aggregates together as late stage) either by the series of stock issued in the financing or, if that information is 2021. Similarly, due to ongoing updates to PitchBook’s data as additional information comes to light, data unavailable, by a series of factors including: the age of the company, prior financing history, company status, extracted before or after that date may differ from the data within the Dataset. participating investors, and more. Only completed transactions regardless of type are included in the Dataset, with deal values for general M&A Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both transactions as well as venture rounds remaining un-estimated if this information is not available or reliably firms investing via established CVC arms or corporations making equity investments off balance sheets or estimated. whatever other non-CVC method actually employed. Venture capital deals Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other PitchBook includes equity investments into startup companies from an outside source. Investment does not PitchBook venture financings are included in the Pulse of Fintech as of March 2018. necessarily have to be taken from an institutional investor. This can include investment from individual angel Private equity investments investors, angel groups, seed funds, venture capital firms, corporate venture firms and corporate investors. Investments received as part of an accelerator program are not included, however, if the accelerator continues PitchBook includes both buyout investors, being those that specialize in purchasing mainly a controlling interest to invest in follow-on rounds, those further financings are included. of an established company (in a leveraged buyout) and growth/expansion investors, being those that focus on investing in minority stakes in already established businesses to fund growth. Transaction types include: Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the leveraged buyout (“LBO”; management buyout; management buy-In; add-on acquisitions aligned to existing company to date and it cannot determine if any PE or VC firms are participating. In addition, if there is a press investments; secondary buyout; public to private; privatization; corporate divestitures; and growth/expansion. release that states the round is an angel round, it is classified as such. Finally, if a news story or press release only mentions individuals making investments in a financing, it is also classified as angel. As for seed, when

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Methodology (cont’d) M&A transactions 3. Lending — any non-bank who uses a technology platform to lend money often implementing alternative data and analytics OR any company whose primary business involves providing data and PitchBook defines M&A as a transaction in which one company purchases a controlling stake in another analytics to online lenders or investors in online loans. company. Eligible transaction types include control acquisitions, leveraged buyouts (LBOs), corporate divestitures, reverse mergers, mergers of equals, spin-offs, asset divestitures and asset acquisitions. Debt 4. Proptech — companies that are classified as both fintech AND also who are developing and restructurings or any other liquidity, self-tender or internal reorganizations are not included. More than leveraging technology intended to help facilitate the purchase, management, maintenance and 50 percent of the company must be acquired in the transaction. Minority stake transactions (less than a investment into both residential and commercial real estate. This includes sub-sectors such as 50-percent stake) are not included. Small business transactions are not included in this report. property management software, IoT home devices, property listing and rental services, mortgage and lending applications, data analysis tools, virtual reality modeling software, augmented reality design The fintech vertical applications, marketplaces, mortgage technology and crowdfunding websites.

A portmanteau of finance and technology, the term refers to businesses who are using technology to operate 5. Insurtech — companies utilizing technology to increase the speed, efficiency, accuracy and outside of traditional financial services business models to change how financial services are offered. Fintech convenience of processes across the insurance value chain. This includes quote comparison also includes firms that use technology to improve the competitive advantage of traditional financial services websites, insurance telematics, insurance domotics (home automation), peer-to-peer insurance, firms and the financial functions and behaviors of consumers and enterprises alike. PitchBook defines the corporate platforms, online brokers, cyber insurance, underwriting software, claims software and FinTech vertical as “Companies using new technologies including the internet, blockchain, software and digital sales enabling. algorithms to offer or facilitate financial services usually offered by traditional banks including loans, payments, wealth or investment management, as well as software providers automating financial processes or addressing 6. Wealthtech — companies or platforms whose primary business involves the offering of wealth core business needs of financial firms. Includes makers of ATM machines, electronic trading portals and management services using technology to increase efficiency, lower fees or provide differentiated point-of-sale software.” Within this report, we have defined a number of Fintech sub-verticals: offerings compared to the traditional business model. Also includes technology platforms for retail investors to share ideas and insights both via quantitative and qualitative research. 1. Payments/Transactions — companies whose business model revolves around using technology to provide the transfer of value as a service including both B2B and B2C transfers. 7. Regtech — companies who provide a technology-driven service to facilitate and streamline compliance with regulations and reporting as well as protect from employee and customer fraud. 2. Blockchain/Cryptocurrency — companies whose core business is predicated on distributed ledger (blockchain) technology with the financial services industry AND/OR relating to any use case of cryptocurrency (e.g. Bitcoin). This vertical includes companies providing services or developing technology related to the exchange of cryptocurrency, the storage of cryptocurrency, the facilitation of payments using cryptocurrency and securing cryptocurrency ledgers via mining activities.

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