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<p>THE GLOBAL FINTECH REPORT: Q1'17 A comprehensive, data-driven look at global financial technology investment trends, top deals, active investors, and corporate activity. The technology market intelligence platform. CB Insights software lets you predict, discuss, and communicate emerging technology trends using data in ways that are beyond human cognition. www.cbinsights.com 2 www.cbinsights.com 3 See what other customers have to say at http://www.cbinsights.com/customer-love A FEW OF OUR HAPPY CUSTOMERS The most publicly reference-able customers of anyone in the industry Pat Grady Sequoia Capital, Partner "Think of the fundamental value chain of venture capital If we play the clock forward, the finding and assessing of investments will be almost entirely done by technology, not human beings. And the company that is today positioned to be the market leader in that evolution is CB Insights." www.cbinsights.com 4 From the NY Times to Bloomberg, CB Insights data is used by hundreds of leading media outlets every week "ACCORDING TO CB INSIGHTS" CB INSIGHTS NEWS MENTIONS PER YEAR 62 9 16 211 490 1200 2200 2010 2011 2012 2013 2014 2015 2016 5 www.cbinsights.com JUNE 26-28 | NEW YORK CITY, NY Join CB Insights for an exclusive gathering of the world's largest financial institutions, most highly-valued fintech startups, and top venture investors. www.cbinsights.com 6 TABLE OF CONTENTS # SECTION 7 Summary 9 Global Trends 27 North America 39 Europe 51 Asia WHAT THIS REPORT COVERS www.cbinsights.com 7 While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including: Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness. Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools. Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments. Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries. Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains. Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modeling and analysis software. Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity. Insurance tech: Companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings, and software-as-a-service to help insurers deal with legacy IT issues. SUMMARY OF FINDINGS www.cbinsights.com 8 VC-BACKED FINTECH COMPANIES RAISE $2.7B ACROSS 226 DEALS IN Q1'17: Investment dollars to VC-backed fintech companies in 2017 is on pace to drop 18% from 2016, at the current run rate. Global fintech deal activity could surpass 2016's all-time high if the rest of the year sustains Q1'17's deal pace. 22 FINTECH UNICORNS GLOBALLY VALUED AT $77B: Q1'17 saw the second most highly valued fintech unicorn in the US, SoFi, raise $500M at a $4.5B valuation. China Rapid Finance, valued at $1B, filed for IPO on the last day of Q1'17. FINTECH MEGA-ROUNDS RISE SLIGHTLY IN Q1'17: There were seven $50M+ financings to VC-backed fintech companies in Q1'17, compared to 14 in the same quarter last year. EUROPE ENDS MEGA-ROUND DROUGHT: In 2016, no European VC- backed fintech company raised a financing round of $50M+. In the first quarter of 2017, two companies, Atom and Funding Circle, raised $100M+ each. EUROPE FINTECH INVESTMENT SPIKES IN Q1'17: Europe saw a burst of fintech investment in the first three months of 2017, putting total funding dollars on pace to surpass $2.6B at the current run rate. Europe fintech deal activity is on pace to top 2016's total by 57% if the current pace persists. VC FUNDING TO EARLY-STAGE EUROPEAN FINTECHS GROWS 261%: European VC-backed early-stage fintech companies raised $195M across 50 deals in Q1 2017, a 72% quarterly deal jump. The surge in early-stage fintech funding was led by $10M+ rounds to companies including solarisBank, ottonova, ShapeShift, and Advanon. US FINTECH IS ON PACE TO SEE DEALS, DOLLARS DROP IN 2017: If the pace of investment in Q1'17 continues, funding to VC-backed fintech funding would drop 20% from 2016's dollar total. US fintech deal activity is on pace to fall below 2013 levels at the current run rate. Note: Report focuses on all equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, private equity firms or any debt, secondary or line of credit transactions. All data is sourced from CB Insights. Page 62 details the rules and definitions we use. In Q1 2017, global VC-backed fintech startups raised $2.7 BILLION across 226 DEALS www.cbinsights.com 9 VC-BACKED FINTECH FUNDING ON PACE TO DROP FROM 2016 TOTAL Investment dollars to VC- backed fintech companies in 2017 is on pace to drop 18% from 2016, at the current run rate. Global fintech deal activity could surpass 2016's high if the rest of the year sustains Q1'17's deal pace. www.cbinsights.com 10 $2.5 $3.1 $7.9 $14.7 $13.1 $2.7 450 573 740 878 889 226 0 100 200 300 400 500 600 700 800 900 1000 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 2012 2013 2014 2015 2016 2017 ANNUAL GLOBAL FINANCING TREND TO VC-BACKED FINTECH COMPANIES 2012 - 2017 YTD (Q1'17) Amount ($B) Deals GLOBAL VC-BACKED FINTECH DOLLARS RISE IN Q1'17 AFTER 3- QUARTER DECLINE Funding to global VC- backed fintech companies rose 33% on a quarterly basis, but was down 47% compared to the same quarter last year. Global fintech deal activity rose 12% from Q4'16 to top 225 deals over the three-month period. www.cbinsights.com 11 $669 $582 $728 $560 $593 $610 $898 $1,015 $1,631 $1,734 $1,379 $3,113 $2,444 $5,240 $5,062 $1,974 $4,898 $3,707 $2,506 $2,037 $2,705 106 112 102 130 119 130 163 161 163 178 190 209 204 236 228 210 256 233 198 202 226 0 50 100 150 200 250 300 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 QUARTERLY GLOBAL FINANCING TRENDS TO VC-BACKED FINTECH COMPANIES Q1'12 - Q1'17 Amount ($M) Deals FINTECH SERIES A DEAL SHARE MATCHES FIVE- QUARTER LOW Global fintech Series A deal share fell from 25% in Q4'16 to 20% in Q1'17. Seed deal share rebounded from Q4'16's low to hit 34% in Q1'17. www.cbinsights.com 12 45% 33% 34% 31% 34% 20% 24% 23% 25% 20% 14% 13% 14% 13% 15% 6% 11% 8% 6% 7% 4% 3% 4% 6% 3% 2% 1% 1% 3% 11% 15% 16% 18% 18% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 QUARTERLY GLOBAL FINTECH DEAL SHARE BY STAGE Q1'16 - Q1'17 Seed / Angel Series A Series B Series C Series D Series E+ Other EARLY-STAGE FINTECH DEALS AND DOLLARS GROW IN Q1'17 After global early-stage fintech funding fell to a 7- quarter low in Q4'16, seed and Series A investment rebounded slightly in Q1'17 to hit $431M. Early-stage fintech deals rose 5% on a quarterly basis. www.cbinsights.com 13 $156 $184 $163 $146 $204 $177 $280 $340 $529 $579 $358 $518 $380 $542 $434 $438 $544 $606 $487 $409 $431 65 69 68 82 79 86 108 111 105 118 120 131 121 139 136 128 164 133 113 113 122 0 20 40 60 80 100 120 140 160 180 $- $100 $200 $300 $400 $500 $600 $700 QUARTERLY GLOBAL EARLY-STAGE FINANCING TRENDS TO VC-BACKED FINTECH COMPANIES Seed - Series A, Q1'12 - Q1'17 Amount ($M) Deals MEDIAN EARLY-STAGE FINTECH DEAL SIZE FALLS IN Q1'17 Median early-stage (Seed Series A) deal size among VC-backed fintech companies in Q1'17 fell after rising to $2.7M in Q4'16. Median early-stage deal size in Q1'17 did however top the $2.2M median in the same quarter last year. www.cbinsights.com 14 $2.2 $2.5 $2.6 $2.7 $2.5 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 GLOBAL EARLY-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Early-Stage Deal Size ($M) GLOBAL MEDIAN LATE- STAGE DEAL SIZE SEES LITTLE MOVEMENT IN Q1'17 The median late-stage fintech deal size in Q1'17 stood at $20.5M, just slightly higher than Q4'16's median. www.cbinsights.com 15 $20.0 $30.0 $23.0 $20.3 $20.5 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 GLOBAL LATE-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Late-Stage Deal Size ($M) EUROPE SEES FINTECH DEAL SPIKE IN Q1'17 Europe saw deal activity to VC-backed fintech companies rise a notable 74% on a quarterly basis in Q1'17. North America saw deals to VC-backed fintech startups drop 12% compared to Q4'16 and 33% from the same quarter last year. www.cbinsights.com 16 146 115 107 111 98 49 53 42 38 42 53 52 39 42 73 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 FINTECH DEAL COUNT BY CONTINENT Q1'16 - Q1'17 North America Asia Europe EUROPE FINTECH FUNDING RISES TO 5- QUARTER HIGH Amid upcoming EU legislation that could open the door for fintech companies to challenge incumbent banks, Europe saw funding to VC- backed fintech companies jump 222% on a quarterly basis. After a dip in Q4'16, Asia VC-backed fintech funding rose 89% in Q1'17. www.cbinsights.com 17 $1.8 $1.7 $1.0 $1.3 $1.2 $2.7 $1.6 $1.3 $0.4 $0.8 $0.3 $0.4 $0.2 $0.2 $0.7 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 FINTECH INVESTMENT ($B) BY CONTINENT Q1'16 - Q1'17 North America Asia Europe 500 STARTUPS AND NEA ARE MOST ACTIVE GLOBAL FINTECH INVESTORS 500 Startups, New Enterprise Associates, and Index Ventures were the most active VCs in global fintech companies over the last five quarters. Ribbit Capital, the financial services- focused venture firm, ranked fourth over the period. www.cbinsights.com 18 MOST ACTIVE VC INVESTORS IN GLOBAL FINTECH COMPANIES Q1'16 Q1'17 Rank Investor Rank Investor 1 500 Startups 12 Bessemer Venture Partners 2 New Enterprise Associates 12 GV 3 Index Ventures 12 Nyca Partners 4 Ribbit Capital 12 Andreessen Horowitz 5 Union Square Ventures 12 Thrive Capital 5 Khosla Ventures 17 Santander InnoVentures 7 QED Investors 17 Valar Ventures 7 Bain Capital Ventures 17 Anthemis Group 7 General Catalyst 17 Founders Fund 7 SBI Investment 17 Spark Capital 11 SpeedInvest CORPORATES PARTICIPATE IN 1 OF EVERY 3 FINTECH DEALS IN Q1'17 As more financial services incumbents continue to launch venture arms, strategic participation in 1/3rd of all global VC-backed fintech deals in Q1'17 vs. 22% in the same quarter last year. www.cbinsights.com 19 22% 30% 29% 30% 33% 78% 70% 71% 70% 67% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CVC PARTICIPATION IN GLOBAL DEALS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Corp / CVC Participation Other Investors EUROPE ENDS FINTECH MEGA-ROUND DROUGHT After seeing no $50M+ financings to VC-backed fintech companies in 2016, Europe saw two fintech companies notch $100M+ deals in Q1'17. www.cbinsights.com 20 9 7 5 3 2 4 4 4 2 3 0 0 0 0 2 1 0 0 1 0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $50M+ FINANCINGS TO VC-BACKED FINTECH COMPANIES North America, Asia, Europe, South America, Q1'16 - Q1'17 North America Asia Europe South America 22 FINTECH UNICORNS GLOBALLY VALUED AT $77B IN AGGREGATE In Q1'17, SoFi raised $500M at a $4.5B valuation, while China Rapid Finance filed for a $100M IPO in the US. China is also home to the financial affiliates of Alibaba and JD.com, last valued at $60B and $7.3B, respectively. www.cbinsights.com 21 $18.5 $9.2 $8.0 $5.9 $4.5 $3.6 $3.5 $2.7 $2.4 $2.3 $2.3 $2.0 $1.9 $1.8 $1.6 $1.1 $1.0 $1.0 $1.0 $1.0 $1.0 $1.0 GLOBAL VENTURE-BACKED FINTECH UNICORNS BY VALUATION $ Billion Asia North America Europe DEALS TO VC-BACKED INSURANCE TECH STARTUPS DROP IN Q1'17 Funding to venture capital-backed insurance tech companies fell 25% on a quarterly basis in Q1'17, while deal activity dropped 30%. www.cbinsights.com 22 $770 $387 $220 $257 $194 38 22 24 33 23 0 5 10 15 20 25 30 35 40 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 QUARTERLY FINANCING TREND TO VC-BACKED INSURANCE TECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals FUNDING TO VC-BACKED BLOCKCHAIN AND BITCOIN COMPANIES REBOUNDS Investment to VC-backed bitcoin and blockchain startups rebounded in Q1'17 to $113M after dropping to $77M in Q4'16. The largest deals over the three-month period included BitFury's $30M Series C and Veem's $24M Series B. www.cbinsights.com 23 $153 $121 $131 $77 $113 24 18 16 19 23 0 5 10 15 20 25 30 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 QUARTERLY FINANCING TREND TO VC-BACKED BLOCKCHAIN/BITCOIN COMPANIES Q1'16 - Q1'17 Amount ($M) Deals PAYMENTS TECH FUNDING FALLS TO 5- QUARTER LOW Investment dollars to VC- backed payments tech companies (online and mobile payments, point of sales systems) fell 39% on a quarterly basis, while deals rose for the second consecutive quarter. www.cbinsights.com 24 $311 $445 $442 $495 $304 38 50 42 44 50 0 10 20 30 40 50 60 $- $100 $200 $300 $400 $500 $600 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 QUARTERLY FINANCING TREND TO VC-BACKED PAYMENTS TECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals MAJOR BANKS CONTINUE TO INVEST IN FINTECH STARTUPS Santander, Goldman Sachs, and Citi or their venture arms have participated in the highest number of deals to venture-backed fintech companies over the last five quarters. www.cbinsights.com 25 9 8 8 6 5 3 3 3 2 2 2 1 1 1 1 1 MAJOR BANK INVESTMENTS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 INSURERS CONTINUE TO PILE INTO STRATEGIC TECH INVESTING Q1'17 marked the sixth quarter in a row with more than 20 private tech investments by (re)insurers or their strategic venture units. www.cbinsights.com 26 0 5 10 15 20 25 30 PRIVATE TECH INVESTMENTS BY (RE)INSURERS Q1'12 - Q1'17 OUTSIDE OF CORE MARKETS, LARGEST DEALS CENTER IN BRAZIL AND AUSTRALIA Of the 10 largest deals outside of Asia, Europe, and North America over the last five quarters, 8 took place in Australia or Brazil. www.cbinsights.com 27 NOTABLE FINTECH DEALS OUTSIDE CORE MARKETS Q1'16 Q1'17 Company Round Country Select investors $80M (Series D // Q4'16) Brazil Founders Fund, Kaszek Ventures, Sequoia Capital, Tiger Global $52M (Series C // Q1'16) Brazil Founders Fund, Kaszek Ventures, Sequoia Capital, Tiger Global $30M* (Venture // Q1'16) Australia Undisclosed investors $19.4M (Series B // Q1'17) Brazil IFC, Kaszek Ventures, Naspers, QED Investors, Quona Capital, Redpoint e.ventures $19.3M (Series C // Q1'17) Australia AirTree Ventures $19M (Series C // Q2'16) Australia Australian Capital Equity, Consolidated Press Holdings, News Corp Australia $17.3M (Series C // Q2'16) Brazil IFC, Kaszek Ventures, QED Investors, Ribbit Capital $15M (Series B // Q3'16) South Africa IFC, Omidyar Network, Accion, 4Di Capital, Lundin Foundation $10M (Series A // Q2'16) Australia Cultivation Capital, Reinventure, Rampersand, Carsales $9M (Series D // Q4'16) New Zealand Jasmine Social Investments, Movac, Square Peg Capital *Includes both debt and equity In Q1 2017, US VC-backed fintech startups raised $1.1 BILLION across 90 DEALS www.cbinsights.com 28 US FINTECH IS ON PACE TO SEE DEALS, DOLLARS DROP IN Q1'17 If the pace of investment in Q1'17 continues, funding to VC-backed fintech companies would drop 20% from 2016's dollar total. US fintech deal activity is on pace to fall below 2013 levels at the current run rate. www.cbinsights.com 29 $1.7 $2.3 $5.3 $7.8 $5.5 $1.1 286 371 429 467 439 90 0 50 100 150 200 250 300 350 400 450 500 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 2012 2013 2014 2015 2016 2017 US ANNUAL GLOBAL FINANCING TREND TO VC-BACKED FINTECH COMPANIES 2012 - 2017 YTD (Q1'17) Amount ($B) Deals US FINTECH DEALS REMAIN BELOW 100 FOR 3 STRAIGHT QUARTERS US fintech deal activity dropped 9% on a quarterly basis, while funding fell 8%. www.cbinsights.com 30 $1.8 $1.6 $0.9 $1.2 $1.1 137 106 97 99 90 0 20 40 60 80 100 120 140 160 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 $2.0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 US QUARTERLY FINANCING TRENDS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($B) Deals US FINTECH SERIES A DEAL SHARE FALLS TO 5- QUARTER LOW Series A deal share fell below 20% after taking over 1/4th of all deals to VC-backed fintech companies in Q4'16. Seed deal share in US fintech did not see a notable drop or rise from Q4'16. www.cbinsights.com 31 42% 26% 36% 23% 24% 22% 23% 21% 26% 19% 13% 9% 10% 15% 16% 5% 12% 9% 3% 6% 4% 6% 4% 6% 4% 2% 3% 1% 1% 4% 12% 21% 19% 25% 27% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 US QUARTERLY GLOBAL FINTECH DEAL SHARE BY STAGE Q1'16 - Q1'17 Seed / Angel Series A Series B Series C Series D Series E+ Other US EARLY-STAGE FINTECH DEALS, DOLLARS REBOUND IN Q1'17 www.cbinsights.com 32 $544 $606 $487 $407 $431 163 133 113 112 122 0 20 40 60 80 100 120 140 160 180 $- $100 $200 $300 $400 $500 $600 $700 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 US GLOBAL EARLY-STAGE FINANCING TREND TO VC- BACKED FINTECH COMPANIES Seed - Series A, Q1'16 - Q1'17 Amount ($M) Deals US seed and Series A funding to VC-backed fintech companies rose 6% on a quarterly basis in Q1'17. After dropping for three consecutive quarters, early-stage deals in Q1'17 increased 9% the prior three months. US EARLY-STAGE FINTECH DEAL SIZE FALLS FROM Q4'16 HIGH Median early-stage fintech deal size fell back 20% on a quarterly basis in Q1'17 after rising to $4M in Q4'16. www.cbinsights.com 33 $2.5 $3.5 $2.2 $4.0 $3.2 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 US EARLY-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Early-Stage Deal Size ($M) LATE-STAGE US FINTECH DEAL SIZE FALLS SLIGHTLY IN Q4'16 Median late-stage fintech deal size stood at $25.5M in Q1'17, compared to $26.5M in Q4'16. www.cbinsights.com 34 $25.0 $30.0 $21.9 $26.5 $25.5 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 US LATE-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Late-Stage Deal Size ($M) SOFI'S MEGA-ROUND TOPS LARGEST US FINTECH DEALS OF Q1'17 The top 10 US VC- backed fintech deals in Q1'17 raised $750M in aggregate funding, two- thirds of which came from SoFi's $500M financing led by Silver Lake. www.cbinsights.com 35 TOP 10 US FINTECH DEALS Q1'17 Company Round State Round Investors $500M (Series F) California Silver Lake, GPI Capital, Softbank Group $50M (Series D) New York Altimeter Capital, Scale Venture Partners, Sequoia Capital, Four Rivers Group, Matrix Partners, Greenspring Associates $32.5M (Series D) California Rakuten, Third Point, Khosla Ventures, First Round Capital $30M (Series B) California IVP, Ribbit Capital, Female Founders Fund, Data Collective, Collaborative Fund, Lowercase Capital $27.6M (Series D) New York Thiel Capital $24M (Series B) California NAB Ventures, SBI Investment, GV, Kleiner Perkins, Silicon Valley Bank $23.5M (Series E) New York BlueCross Blue Shield Venture Partners, Andrew Prozes $22M (Series A) California Matrix Partners, Ribbit Capital, March Capital Partners, Felicis Ventures $20.5M (Series G) California True Ventures $20M (Series B) Utah Pelion Venture Partners, NEA, EPIC Ventures, Deep Fork Capital CORPORATE PARTICIPATION IN US FINTECH STAYS RANGE- BOUND Corporates participated in close to 1/4th of all deals to US VC-backed fintech companies in Q1'17. www.cbinsights.com 36 21% 30% 25% 26% 24% 79% 70% 75% 74% 76% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CVC PARTICIPATION IN US DEALS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Corp / CVC Participation Other Investors NEA, KHOSLA ARE MOST ACTIVE US FINTECH INVESTORS New Enterprise Associates was the most active VC investor in US- based fintech companies over the last five quarters followed by Khosla Ventures. General Catalyst, Union Square Ventures, and Bain Capital Ventures tied for third. www.cbinsights.com 37 MOST ACTIVE VC INVESTORS IN US FINTECH COMPANIES Q1'16 Q1'17 Rank Investor Rank Investor 1 New Enterprise Associates 9 Founders Fund 2 Khosla Ventures 9 Thrive Capital 3 General Catalyst Partners 9 SV Angel 3 Bain Capital Ventures 9 Citi Ventures 3 Union Square Ventures 9 Bessemer Venture Partners 6 Nyca Partners 9 Comcast Ventures 7 Andreessen Horowitz 9 Spark Capital 7 GV CALIFORNIA FINTECH FUNDING JUMPS, AS DEALS DROP In Q1'17, funding to VC- backed fintech companies in California grew 39% on a quarterly basis behind SoFi's $500M financing led by Silver Lake. But fintech deals in the state fell for the second consecutive quarter, and declined 28% from the same quarter last year. www.cbinsights.com 38 $596 $752 $515 $509 $710 54 41 51 42 39 0 10 20 30 40 50 60 $- $100 $200 $300 $400 $500 $600 $700 $800 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CALIFORNIA QUARTERLY FINANCING TREND TO VC- BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals NEW YORK FINTECH DEALS RISE FOR SECOND STRAIGHT QUARTER Fintech funding to VC- backed New York companies fell 35% on a quarterly basis. New York fintech deal activity rose 26% from Q4'16, but registered 33% below the same quarter last year, which included large financings to Oscar and Betterment. www.cbinsights.com 39 $868 $238 $153 $390 $253 36 30 15 19 24 0 5 10 15 20 25 30 35 40 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 NEW YORK QUARTERLY FINANCING TREND TO VC- BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals In Q1 2017, European VC-backed fintech startups raised $667 MILLION across 73 DEALS www.cbinsights.com 40 EUROPE FINTECH INVESTMENT IS ON TRACK FOR A RECORD YEAR Europe saw a burst of fintech investment in the first three months of 2017, putting total funding dollars on pace to surpass $2.6B at the current run rate. Europe fintech deal activity is on pace to top 2016's total by 57% if the current pace persists. www.cbinsights.com 41 $0.3 $0.3 $1.2 $1.7 $1.1 $0.7 79 83 125 170 186 73 0 20 40 60 80 100 120 140 160 180 200 $- $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 2012 2013 2014 2015 2016 2017 EUROPE ANNUAL GLOBAL FINANCING TREND TO VC- BACKED FINTECH COMPANIES 2012 - 2017 YTD (Q1'17) Amount ($B) Deals EUROPEAN FINTECH DEALS, FUNDING LEAP AHEAD IN Q1'17 European VC-backed fintech companies raised $667M across 73 deals in Q1'17. Compared to the same quarter last year, Europe fintech funding in Q1'17 rose 121%, while deals jumped 38%. www.cbinsights.com 42 $0.3 $0.4 $0.2 $0.2 $0.7 53 52 39 42 73 0 10 20 30 40 50 60 70 80 $- $0.1 $0.2 $0.3 $0.4 $0.5 $0.6 $0.7 $0.8 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 EUROPE QUARTERLY FINANCING TRENDS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($B) Deals EARLY-STAGE TAKES OVER 2/3RDS OF EUROPE FINTECH DEALS FOR THIRD STRAIGHT QUARTER In Q1'17, seed deal share stayed at 45%+ for the third consecutive quarter. After rising to 14% in Q4'16, Series B deal share fell to just 5% of all fintech deals in Europe in Q1'17. www.cbinsights.com 43 47% 37% 49% 45% 45% 17% 25% 23% 24% 23% 11% 13% 10% 14% 5% 9% 10% 5% 7% 8% 4% 2% 5% 2% 1% 4% 11% 13% 8% 7% 12% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 EUROPE QUARTERLY GLOBAL FINTECH DEAL SHARE BY STAGE Q1'16 - Q1'17 Seed / Angel Series A Series B Series C Series D Series E+ Other VC FUNDING TO EARLY- STAGE EUROPEAN FINTECHS GROWS 261% European VC-backed early-stage fintech companies raised $195M across 50 deals in Q1 2017, a 72% quarterly deal jump. The surge in early-stage fintech funding was led by $10M+ rounds to companies including solarisBank, ottonova, Advanon, and ShapeShfit. www.cbinsights.com 44 $85 $108 $119 $54 $195 33 32 28 29 50 0 10 20 30 40 50 60 $- $50 $100 $150 $200 $250 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 EUROPE GLOBAL EARLY-STAGE FINANCING TREND TO VC-BACKED FINTECH COMPANIES Seed - Series A, Q1'16 - Q1'17 Amount ($M) Deals MEDIAN EUROPEAN EARLY-STAGE DEAL SIZE RISES AFTER TWO QUARTER DROP Early-stage median fintech deal size in Europe rose to $2.5M after falling for two consecutive quarters from $3.4M in Q2'16. www.cbinsights.com 45 $2.4 $3.4 $3.0 $2.2 $2.5 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 EUROPEAN EARLY-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Early-Stage Deal Size ($M) OVERALL MEDIAN DEAL SIZE RISES TO $4.6M IN Q1'17 Overall European median fintech deal size rose 53% on a quarterly basis as Europe saw 10 $20M+ deals over the three- month period. www.cbinsights.com 46 $3.0 $5.1 $4.4 $3.0 $4.6 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 EUROPEAN OVERALL FINTECH DEAL SIZE Q1'16 - Q1'17 Median Overall Deal Size ($M) EUROPE NOTCHES FIRST $100M+ VC-BACKED FINTECH DEALS The top 10 deals in Q1'17 to European venture- backed fintech startups raised more than $405M in total funding. www.cbinsights.com 47 TOP 10 EUROPEAN FINTECH DEALS Q1'17 Company Round Country Round Investors $102M (Series C) United Kingdom BBVA, Toscafund Asset Management, Woodford Investment Management $100M (Series F) United Kingdom Accel, Baillie Gifford & Co., DST, Index Ventures, Ribbit Capital, Temasek, Union Square Ventures $32M (Series C) Germany Thrive Capital, Ribbit Capital, Index Ventures $30M (Series C) Netherlands China Credit Limited Holdings $28M (Series A) Germany Arvato Financial Solutions, FinLeap, SBI Investment, Yabeo Capital $25M (Series D) United Kingdom Rakuten Ventures, GV, Anthemis Group, Notion Capital, Sapphire Ventures $24.5M (Series B) United Kingdom Thrive Capital, Orange Digital Ventures, Passion Capital $22.9M (Series B) Poland Capitec Bank $21.2M (Series C-II) Germany Rakuten Ventures, Allianz Ventures, Rheingau Ventures, Route 66 Ventures $20M (Private Equity) United Kingdom Target Global, Viola Private Equity, CVC DEAL ACTIVITY IN EUROPEAN FINTECH CLIMBS TO 5-QUARTER HIGH In Q1'16, investments to VC-backed fintech companies in Europe involving strategic investors stood at 17%. The same quarter this year, strategics have increased their involvement to 37% of all Europe fintech deals. www.cbinsights.com 48 17% 23% 26% 36% 37% 83% 77% 74% 64% 63% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CVC PARTICIPATION IN EUROPE DEALS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Corp / CVC Participation Other Investors INDEX VENTURES, SPEEDINVEST ARE MOST ACTIVE VCS IN EUROPEAN FINTECH COMPANIES Over the last five quarters, Index Ventures has made new or follow- on investments to European fintech companies including Bonify, Raisin, and Silverfin. www.cbinsights.com 49 MOST ACTIVE VC INVESTORS IN EUROPEAN FINTECH COMPANIES Q1'16 Q1'17 Rank Investor Rank Investor 1 Index Ventures 7 Ribbit Capital 1 SpeedInvest 7 Octopus Ventures 3 Holtzbrinck Ventures 7 NFT Ventures 3 Global Founders Capital 7 Earlybird Venture Capital 3 Dieter von Holtzbrinck Ventures 7 German Startups Group 3 Seedcamp 7 SEED Capital UK FINTECH FUNDING JUMPS ON THE BACK OF $100M+ DEALS UK VC-backed fintech companies raised $328M in Q1'17, with $200M+ coming from a pair of investments to Atom Bank and Funding Circle. Fintech deal activity in the UK rose 57% on a quarterly basis. www.cbinsights.com 50 $121 $124 $78 $121 $328 17 15 12 14 22 0 5 10 15 20 25 $- $50 $100 $150 $200 $250 $300 $350 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 UK QUARTERLY FINANCING TREND TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals GERMAN FINTECH DEALS REBOUND TO 5-QUARTER HIGH German VC-backed fintech deals rose 143% in Q1'17 on a quarterly basis, while funding grew 341% driven by investments to companies including Raisin and solarisBank. www.cbinsights.com 51 $107 $175 $105 $34 $150 15 15 11 7 17 0 2 4 6 8 10 12 14 16 18 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 GERMANY QUARTERLY FINANCING TREND TO VC- BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals In Q1 2017, Asian VC-backed fintech startups raised $826 MILLION across 42 DEALS www.cbinsights.com 52 ASIA FINTECH DEALS ON PACE TO DROP IN 2017 At the current run rate, Asia could see 8% fewer deals in 2017 to VC- backed fintech companies than in 2016. www.cbinsights.com 53 $0.3 $0.3 $1.1 $4.8 $5.9 $0.8 58 73 134 173 182 42 0 20 40 60 80 100 120 140 160 180 200 $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 2012 2013 2014 2015 2016 2017 ASIA ANNUAL GLOBAL FINANCING TREND TO VC- BACKED FINTECH COMPANIES 2012 - 2017 YTD (Q1'17) Amount ($B) Deals ASIAN FINTECH FUNDING RISES AFTER 3-QUARTER DROP VC-backed fintech companies in Asia saw funding double in Q1'17 to $826M. Deals rose slightly on a quarterly basis, but stood 14% lower than the same quarter last year. www.cbinsights.com 54 $2.7 $1.6 $1.3 $0.4 $0.8 49 53 42 38 42 0 10 20 30 40 50 60 $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 ASIA QUARTERLY FINANCING TRENDS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($B) Deals FINTECH SERIES B DEAL SHARE MATCHES 5- QUARTER HIGH IN Q1'17 Series A deal share to VC-backed fintech companies in Asia fell to a five-quarter low, while Series B deal share rose from 16% in Q4'16 to 31% in the first three months of 2017. www.cbinsights.com 55 45% 36% 17% 29% 31% 20% 23% 26% 21% 12% 24% 23% 31% 16% 31% 2% 9% 7% 16% 10% 2% 8% 2% 2% 2% 4% 9% 17% 11% 14% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 ASIA QUARTERLY GLOBAL FINTECH DEAL SHARE BY STAGE Q1'16 - Q1'17 Seed / Angel Series A Series B Series C Series D Series E+ Other ASIAN EARLY-STAGE FINANCING STAYS LEVEL IN Q1'17 Asian VC-backed early- stage fintech companies saw $62M across 18 deals in the first three months of 2017, with little deviation from Q4'16's total. www.cbinsights.com 56 $51 $118 $111 $66 $62 32 31 18 19 18 0 5 10 15 20 25 30 35 $- $20 $40 $60 $80 $100 $120 $140 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 ASIA GLOBAL EARLY-STAGE FINANCING TREND TO VC- BACKED FINTECH COMPANIES Seed - Series A, Q1'16 - Q1'17 Amount ($M) Deals ASIAN FINTECH EARLY- STAGE DEAL SIZE MATCHES 5-QUARTER LOW Q1'17 saw early-stage median deal size drop 57% on a quarterly basis, after rising for three consecutive quarters. www.cbinsights.com 57 $1.5 $2.0 $3.3 $3.5 $1.5 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 ASIA EARLY-STAGE FINTECH DEAL SIZE Q1'16 - Q1'17 Median Early-Stage Deal Size ($M) ASIA'S TOP Q1'17 DEALS CENTER IN CHINA 7 of the top 10 Q1'17 deals to venture-backed fintech companies in Asia went to China-based companies. South Korea payments startup Viva Republica and Indonesian P2P lending platform Amartha also raised $30M+ financings in Q1'17. www.cbinsights.com 58 TOP 10 ASIAN FINTECH DEALS Q1'17 Company Round Country Select investors $72M (Series B) China 360jinrong, Addor Capital, CreditEase, Matrix Partners China, Youjin Capital $68M (Series C) China China International Capital Corp., Golden Brick Capital, GX Capital, Sinovation Ventures $48M (Series C) South Korea Goodwater Capital, Altos Ventures, Bessemer Venture Partners, PayPal, Partech Ventures $33.4M (Series C) China Liaison Technologies $30M (Series A) Indonesia BEENEXT, Mandiri Capital $29M (Series B) China China Renaissance Capital Investment, PAG, Sequoia Capital China $16M (Series A) Japan DCM Ventures, Draper Nexus, JAFCO, Mitsui Sumitomo Insurance Venture Capital, Monex Ventures, Rakuten Ventures $14.6M (Series B) China CITIC Capital Private Equity, Yonghua Capital $14.6M (Series B-II) China China Growth Capital, ChinaEquity Group, Frees Fund, Shunwei Capital Partners $14.5M (Series B) China Bertelsmann Asia Investments, Future Capital Discovery Fund, Shunwei Capital, Sinolink CORPORATES PARTICIPATE IN HALF OF ASIAN FINTECH DEALS Corporate participation in Asian VC-backed fintech deals rebounded to 50% after falling to 42% in Q4'16. Strategic involvement in Asia's Q1'17 fintech financing far outpaced the same quarter last year when corporates participated in 31% of all deals. www.cbinsights.com 59 31% 40% 50% 42% 50% 69% 60% 50% 58% 50% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CVC PARTICIPATION IN ASIA DEALS TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Corp / CVC Participation Other Investors 500 STARTUPS IS MOST ACTIVE VC IN ASIAN FINTECH STARTUPS Over the past five quarters, 500 Startups made investments to fintech startups in Asia including BeeWise, First Circle, and Credit Engine. www.cbinsights.com 60 MOST ACTIVE VC INVESTORS IN ASIAN FINTECH COMPANIES Rank Investor Rank Investor 1 500 Startups 5 Kalaari Capital 2 SBI Investment 5 BEENEXT 2 East Ventures 5 IDG Capital Partners 4 Sequoia Capital India 5 Source Code Capital 5 Matrix Partners China 2016 CHINA SEES $661M TO VC-BACKED FINTECH COMPANIES IN Q1'17 Deal activity to VC- backed fintech companies doubled on a quarterly basis in Q1'17, while funding rose 149%. www.cbinsights.com 61 $2.4 $1.3 $1.1 $0.3 $0.7 15 17 14 7 14 0 2 4 6 8 10 12 14 16 18 $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 CHINA QUARTERLY FINANCING TREND TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($B) Deals INDIA FINTECH FUNDING DROPS TO FIVE-QUARTER LOW Q1'17 saw both investment and deal activity to VC-backed fintech companies drop to 5-quarter lows. In April, SoftBank was reportedly considering a $1B+ investment in Paytm owner One97 Communications. www.cbinsights.com 62 $73 $157 $127 $35 $15 16 16 9 12 7 0 2 4 6 8 10 12 14 16 18 $- $20 $40 $60 $80 $100 $120 $140 $160 $180 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 INDIA QUARTERLY FINANCING TREND TO VC-BACKED FINTECH COMPANIES Q1'16 - Q1'17 Amount ($M) Deals METHODOLOGY www.cbinsights.com 63 CB Insights encourages you to review the methodology and definitions employed to better understand the numbers presented in this report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if you feel your firm has been under-represented, please send an email to info@cbinsights.com and we can work together to ensure your firm's investment data is up-to- date. What is included: What is excluded: Equity financings into emerging fintech companies. Fundings must be put into VC-backed companies, which are defined as companies who have received funding at any point from either: venture capital firms, corporate venture groups or super angel investors. Fundings of only private companies. Funding rounds raised by public companies of any kind on any exchange (including Pink Sheets) are excluded from our numbers even if they received investment by a venture firm(s). Note: For the purposes of this analysis, JD.com's finance arm JD Finance and its $1B financing were included in the data per its investment from Sequoia Capital China, in Q1 2016. Only includes the investment made in the quarter for tranched investments. If a company does a second closing of its Series B round for $5M and previously had closed $2M in a prior quarter, only the $5M is reflected in our results. Round numbers reflect what has closed not what is intended. If a company indicates the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount which has closed. Only verifiable fundings are included. Fundings are verified via (1) various federal and state regulatory filings; (2) direct confirmation with firm or investor; or (3) press release. Previous quarterly VC reports issued by CBI have exclusively included VC-backed rounds. In this report, any rounds raised by VC-backed companies are included, with the exceptions listed. No contingent funding. If a company receives a commitment for $20M subject to hitting certain milestones but first gets $8M, only the $8M is included in our data. No business development / R&D arrangements, whether transferable into equity now, later or never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity financing nor is it from venture capital firms. As a result, it is not included. No buyouts, consolidations and recapitalizations. All three of these transaction types are commonly employed by private equity firms and are tracked by CB Insights. However, they are excluded for the purposes of this report. No private placements. These investments, also known as PIPEs (Private Investment in Public Equities), are excluded even if made by a venture capital firm(s). No debt / loans of any kind (except convertible notes). Venture debt or any kind of debt / loan issued to emerging, startup companies, even if included as an additional part of an equity financing is not included. If a company receives $3M with $2M from venture investors and $1M in debt, only the $2M is included in these statistics. No government funding. Grants, loan or equity financings by the federal government, state agencies or public-private partnerships to emerging, startup companies are not included. CBINSIGHTS.COM @ cbinsights +1(212)292-3148 </p>
