payments - ey innovalue · funds for equity and debt capital from peer-to-peer,...

Whether an information exchange is a payment, an

exchange of contracts or a secured exchange of sen-

sitive data, it is typically processed and backed by a

trusted third party (for example a financial institu-

tion). However, in 2008 Satoshi Nakamoto1 created

the Bitcoin (a virtual currency). Underlying the vir-

tual currency, there is a technology called the

“blockchain,” which is able to operate without the

need of a traditional third party central authority.

The blockchain is the result of the convergence of

distributed ledgers, cryptography and open-source

software whose aim is to exchange information

between the network’s participants in a decentral-

ised and secure way. So far, the blockchain’s most

prominent application is Bitcoin; however, this is

only one of many possible applications of this dis-

ruptive technology.

Historically, media attention has focussed on Bit-

coin and in particular on its price volatility and con-

troversial usage to support online black markets

such as Silk Road due to the anonymous nature of

a virtual currency that seeks to emulate the ano-

nymity of cash transactions online. More recently

however, attention is shifting from bitcoins (an

application) to its underlying technology: the

blockchain itself. This is because the blockchain

technology can support a much broader range of

potential applications. For example, these include

currency exchange (a payment transaction), pro-

grammable money (a conditional payment trans-

action), digital assets exchange ledgers

(transactions for assets whose ownership is

recorded digitally) and peer to peer data storage (a

peer to peer network for data storage). Figure 1

provides an illustration of the types of application

of the blockchain technology.

tHe BloCKCHain anD FinanCial serViCes: a BrieF oVerVieW oF reCent DeVeloPments, Future oPPortunities anD aPPliCations

megan JoHn

Manager

eDoarDo CenCi

Associate

Update 2015Source: company press releases, INNOVALUE research 1 Satoshi Nakamoto is a pseudonym for an unidentified person or group of people

DESCRIPTIONEXAMPLES OF BLOCKCHAIN COMPANIES SPECIALISTS

CURRENCY EXCHANGE

The blockchain was created to provide a payment system that operates in real time with rapid settlement without the need for a bank account

Micro payments: Coinbase Remittance: Bitpesa, Ripple Financial inclusion: Billion

PROGRAM-MABLE MONEY

Conditions can be included for transactions exchanged in the blockchain such that transactions are approved automatically when the conditions are met

Crowdfunding: Coinfunding Gambling: SatoshiDice Multi-signature account: Ciphrex

DIGITAL ASSETS

The blockchain can be usedfor transactions of any kind ofunit that attest ownership and can be digitalized (e.g. certifi-cates of owner

Corporate assets: Colu Creation of smart contracts: Codius Digital bonds: Bitbond Financial contracts:Mirror

PEER-TO-PEER DATA STORAGE

The blockchain can be used as a trusted P"P network by allowing users to share information on other users hardware

Storage: Storj Healthcare, banking, audit:

Peernova, Ethereum Identity: ShoCard

Figure 1 : possible application of the blockchain

paymentsInsight. Opinion.

Vol 10

COntent

1 tHe BloCKCHain anD

FinanCial serViCes:

INNOVALUE provide a brief overview of recent

developments, future opportunities and applications

for the blockchain in Financial Services

4 Venture CaPital seCtion

Yet again the INNOVALUE team reviews the latest

payment startup funding activity (Q2 202). What are

current product or service innovations for investors,

and what are the global investment trends within the

payment ecosystem?

6 PuBliC marKet Valuations

anD tHe marKet enVironment

The share prices of the public companies in our

payments universe have continued to go up overall, even

though a number of events had negatively impacted the

markets. Markus Massem takes a look at valuation

drivers and benchmarks the different groups within the

payments universe.

7 m&a aCtiVity

What are the key drivers of M&A activity? Which trans-

actions made headlines in the 2nd Quarter of 2015?

What are recent takeover rationales? Robert Kayser

answer these questions.

10 VC-aCiVity

Transaction overview

16 Deal aCtiVity m&a

Transaction overview

payments Insight. Opinion.

The potential of the blockchain technology is

being explored by start-ups and established

organisations alike through investment, incubat-

ing and partnering. For example, Goldman Sachs

is investing in blockchain companies while West-

ern Union is partnering with Ripple to “experi-

ment” with alternative money remittance

business models. Meanwhile, UBS has opened an

office in the London-based Level39 fintech accel-

erator, in order to study potential applications for

the blockchain. Bank of England followed the

same approach. IBM has engaged with central

banks (e.g. FED) to discuss potential applications

of the blockchain relating to the national payment

system, in order to improve the traceability,

clearing and settlement of payment. Most

recently, in May 2015, NASDAQ announced its

in-house development of a blockchain for the

management, issuance and transfer of private

company equity . A month later, it announced a

partnership with Chain, a provider of blockchain

infrastructure, to optimize the shares exchange

process. Citibank has developed three in-house

blockchain systems and its own digital currency

(Citicoin) in order to facilitate cross border trans-

actions. RBS, as part of its plan to invest £3.5 bil-

lion in technological development, is discussing a

‘proof of concept’ with Ripple to automate bank

transfers. These are only a sample of companies

and institutions which have publically announced

their intention to leverage the blockchain and

include major players in investment and retail

banking, payments as well as central banks. Fig-

ure 2 provides an illustration of the types of

approach taken towards the blockchain technol-

ogy by established organisations.

... companies should develop strategies and

business models that leverage the blockchain as an enabler that can be core or complementary to their business.

2

Page 1


capacity of technologies such as the internet. Like

the internet in its early days, investments are sub-

stantially increasing in blockchain related compa-

nies (globally ~$95mn was invested in 2013,

~$350mn in 2014, and ~344mn in the first 5

months of 20156). As in the case of any disrup-

tive, high-potential new technologies, the

2 Source: Milken Institute’s Global Conference 2015 I 3 Source: Companies press release I 4 Source: Reuters I 5 Source: Nasdaq press release I 6 Source: coindesk.com

banks (e.g. FED)4 to discuss potential applica-

tions of the blockchain relating to the national

payment system, in order to improve the trace-

ability, clearing and settlement of payment. Most

recently, in May 2015, NASDAQ announced its

in-house development of a blockchain for the

management, issuance and transfer of private

company equity5. A month later, it announced a

partnership with Chain, a provider of blockchain

infrastructure, to optimize the shares exchange

process. Citibank has developed three in-house

blockchain systems and its own digital currency

blockchain poses a number of challenges to

investors, start-ups and incumbents alike as,

whilst its potential is somehow intuitive, the

development of actual applications requires the

ability to rethink business models, to re-evaluate

user cases and to develop business cases under-

pinning the investment and acquisitions.

Figure 2: Reported approaches of companies leveraging the blockchain technology

strategy incumbets Blockchain company Description

1in-housedevelopment

in-house Record-keeping and transfer security for its private market platform

in-house blockchain system and digital currency (Citicoin)

Cross border transactions

in-house through Cuber technology programmable money for the storage, managing and transfer of liquidity

2

investment

digital currency storage,conversion and transaction services

bitcoin platform and wallet. 2.3 mn users and 39k merchants (June 2015)

3

Partnership

international faster payments real time clearing and settlement (Western Union)

instant €/$ FX transaction (Fidor)

international real-time payments (Us - Western eU)

bitcoin pament methods for merchants (via subsidiaries)

4

accelerators

Fintech accelerator focussed on blockchain

Fintech accelerator with 2015focus on blockchain solutionsfor the insurance industry

interest announced

n.a.

public announcements of interest in blockchain and potential future developments(details not released)

Source: company press releases, INNOVALUE research

(Citicoin) in order to facilitate cross border trans-

actions. RBS, as part of its plan to invest £3.5 bil-

lion in technological development, is discussing a

‘proof of concept’ with Ripple to automate bank

transfers. These are only a sample of companies

and institutions which have publically announced

their intention to leverage the blockchain and

include major players in investment and retail

banking, payments as well as central banks.

Figure 2 provides an illustration of the types

of approach taken towards the blockchain

technology by established organisations.

The blockchain is disrupting the traditional infra-

structural approach to carrying out transactions

as it eliminates the need for a third party central

authority. Its rise may enable the re-emergence of

bilateral based transaction models but its applica-

tion has the potential to impact industries like

financial services with the same disruptive

The potential of the blockchain technology is

being explored by start-ups and established

organisations alike through investment, incubat-

ing and partnering. For example, Goldman Sachs

is investing in blockchain companies while West-

ern Union is partnering with Ripple to “experi-

ment” with alternative money remittance2

business models. Meanwhile, UBS has opened an

office in the London-based Level393 fintech accel-

erator, in order to study potential applications for

the blockchain. Bank of England followed the

same approach. IBM has engaged with central

3

Page 1


Funding Activity

The funding activity of the second quarter of 2015

exceeded the year’s first quarter and therewith has

set a new milestone in the history of this newsletter.

An astonishing total of 153 funding rounds were

recorded, accounting for a total (disclosed) volume

of USD 2.63bn in equity and USD 851m in debt

financing. Funding volume per round was on aver-

age USD 22.8m – an increase of approximately 26%

compared to the previous quarter.

The second quarter of 2015 shows a funding activ-

ity split between six regions. North American

startups collected the most venture capital with a

total of 89 funding rounds. The mainly US-based

companies, with the exception of six Canadian

firms, constitute over 52% of the worldwide total

equity funding volume. Europe was able to secure

its first runners up position, by showing 36 funding

rounds and accounting for approx. 17% of the

worldwide total equity funding volume in Q2 2015,

followed by Asian-based startups which attracted

18 funding rounds with more than 18% of the

worldwide total equity funding volume. With 5

fundings in total, Australia overtook South Ameri-

ca’s fourth place (3 fundings) and left New Zea-

land with 2 fundings in the sixth place. All three

regions showed less than 2% of the worldwide

total equity funding volume.

Investment Trends

Financial marketplaces continued to take the

spotlight in Q2 funding rounds after an already

strong start in Q1. No less than 51 funding rounds

were recorded (30 in Q1), amounting to a total

volume of USD 1.16bn total disclosed equity fund-

ing (USD 448m in Q1) and USD 821m in debt

funding (more than 96% of this quarters total

debt funding volume; USD 208m in Q1).

The term financial marketplaces refers to ven-

tures where the business model is focused on

enabling cash flows from one party to another – in

a sense that the provider facilitates the flow of

funds for equity and debt capital from peer-to-

peer, business-to-consumer and consumer-

to-business.

This trend was especially booming in North

America with 31 out of the 51 ventures – collecting

USD 292m and therefore 25% of all equity

invested in this segment. Europe

scored 15 funding rounds and a total of

USD 272m (23%). Due to a giant fund-

ing in the financial marketplaces seg-

ment, Asia achieved USD 569m in

equity with only 4 fundings in total.

This quarter’s largest funding is allo-

cated in the financial marketplaces

segment and was received by China-

based Shanghai Lujiazui International

Financial Asset Exchange (“Lufax”), a provider of

an online P2P lending platform. Lufax achieved a

giant venture round of USD 485m in equity. The

corresponding investors were BlackPine Private

Equity Partners, CDH Investments and China

International Capital Corporation. Until now

Lufax has benefited from having Ping An, China’s

largest insurer, as an owner. But with the new

funding round Ping An apparently has a minority

stake now. Earlier this year Lufax was put on a list

of more than 350 platforms that had significant

credit risks. According to Bloomberg, Ping An’s

paid-in capital was dramatically reduced. The

new funding round therefore most likely was a

move to shore up capital in the firm. With its lat-

est valuation at nearly USD 10bn (source: WSJ.

com), Lufax is one of the most valuable online

lenders in the world.

Avant (formerly AvantCredit), one of the fastest

growing national online providers of consumer

loans (B2C) in the US, announced this quarter’s

second largest funding round. A debt round with

an incredible volume of USD 400m (by Victoria

Park Capital and Jefferies & Company) pushed

Avant’s total debt funding volume to USD 1.05bn.

Chicago-based Avant’s business model is to offer

personal loans to individuals based on a

transparent and convenient application process

combined with a technology-driven approach

(using big data and machine-learning

algorithms).

With the new funding, the startup is extending its

business by launching the Avant Institutional

Marketplace, allowing institutional investors the

ability to purchase Avant loans.

A minor investment in the financial marketplaces

segment was closed by Texas-based equity lend-

ing firm Vested Finance, that came up in early

2015 with a promising innovative approach in

providing students a smart way to facilitate their

higher education. Sandleigh Ventures invested

USD 5m in the company, whose mobile applica-

ble platform enables students to receive money

from investors to finance their college time in

exchange for a certain percentage of their future

earnings. The repayments to the investors are

predefined to a certain period of time after the

college is completed. With the investment,

Vested Finance is aiming to expand their opera-

tions to further locations in the US and thereby to

extend the usage of their mobile app.

Taking into account the segment’s high funding

activity, it can be expected that this trend will con-

tinue and any future stagnation is highly unlikely.

Joris WetZel

Senior Associate

steFan tHomalla

Associate

Venture CaPital

the funding activity of the second quarter of 2015 exceeded the

year’s fi rst quarter and therewith has set a new milestone in the history of this newsletter.

4

Page 1

Funding activity by region

north america 89

europe 36

asia 18

australia 5

south america 3

new Zealand 2

total 153

Funding activity by segment

Financial marketplace 51

Financial services 27

Online payments 18

mobile payment / mCommerce 16

Virtual / Crypto Currency 12

Others 29

total 153


High volume from investment activities has been

observed in the financial services segment as well.

27 funding rounds were tracked in Q2 (20 in Q1),

with an equity funding volume of USD 591m in

total (USD 345m in Q1) and USD 20m in debt

funding (none in Q1).

Similar regional patterns to the

financial marketplace segment

have been characteristic for

financial services too. 18 out of

27 are based in North America

(67%) – all of them in the

United States. Even stronger is

the regional footprint in terms

of funding size. In total USD

498m were recorded by US

ventures, which means 84% of

all funding activities in the

financial services segment, In

Europe, 4 equity funding’s were

closed, accounting to USD 13m

in total.

One of those US located ven-

tures has been this quarters

fourth largest funding. Credit

Karma received a huge equity

venture round of USD 175m

(equal to 30% of the whole seg-

ment’s funding volume) from

Tiger Global Management, Val-

inor Management and Viking

Global Investors. The consumer

finance company offers free

access to credit filings and

financial data as well as several

tools for the purpose of tracking

and optimizing personal credit

scores, including debt manage-

ment. The firm’s platform cur-

rently counts more than 40

million users, with further

growth to be expected.

PrimeRevenue, provider of a

comprehensive solution to manage and optimize

customer cash flows, announced the second larg-

est funding round in the financial services segment

in Q2. Brown Brothers Harriman Capital Partners

invested USD 80m private equity in the US based

company, which seeks to create approximately

100 new jobs in the next couple of months.

Another US based financial services firm received

the third highest funding round in the analyzed Q2.

ZenPayroll achieved USD 60m from several inves-

tors, among others Google Capital (lead investor).

The company’s innovative Software as a Service

(SaaS) enables businesses to set up and manage

employee payrolls, including email paystubs and

reporting features.

The third trend is in online payments. A total of 18

fundings rounds spread over five of the six regions

(with only New Zealand recording no funding in

online payments).

This quarter’s third largest funding was announced

by online payments provider Affirm. According to

crunchbase.com the lending startup founded in

2012 by PayPal co-founder Max Levchin achieved a

Series B funding round of USD 275m in equity. If

one is to believe an insider source, the lion’s share

of the transaction is debt to further finance Affirm’s

lending business at the online POS, which seems

quite reasonable. The round was led by Spark Cap-

ital, with additional participation from the invest-

ment bank Jefferies and Andreesen Horowitz.

Previous investors Khosla Ven-

tures and Lightspeed Venture

Partners also invested as part of

the round.

Further large fundings were

announced by GMO Internet (a

provider of an online payment

gateway; USD 65m in equity)

and WePay (provider of an

online payments platform for

P2P and B2C payments; USD

40m in equity).

Taking into account this quar-

ter’s big number of fundings

and large funding volumes, we

believe that investor interest in

FinTech will remain strong for

the rest of the year. It remains a

thriller to observe whether the

in the media again and again

mentioned tech-startup bubble

exists, whether it includes the

FinTech industry and what hap-

pens if it would burst.

5

Page 1


European and US stocks performed strongly dur-

ing the first quarter of 2015, reaching record terri-

tory as the markets’ big rally showed no sign of

abating. However, recent

events, especially in relation

to the Greek crisis, have led to

the indices shedding some of

the gains, moving away from

previous record highs. Follow-

ing the Greek referendum and

subsequent submission of

new proposals, investors have

been waiting for more clarity

around a potential bailout

deal being struck, given that

the country's banks are rapidly running out of

cash and businesses are becoming increasingly

affected by the crisis. In the end and following

PuBliC marKet Valuations & tHe marKet enVironment

marKus massem

Senior Associate

the majority of the public companies in

our payments universe have continued to go up over the past three months, with 12 out of 18 stocks posting gains.

extensive negotiations, European leaders agreed

on Greece’s third bailout package in five years,

including an overhaul of the pension system,

changes to the labor market

and privatization plans.

In Asia, Chinese stocks have

seen a strong decline which

led to Chinese authorities

unveiling a series of mea-

sures intended to halt the

slide of almost 30% since

mid-June. Measures included

share suspensions, with

more than 50% of all listed

companies on China’s two

main exchanges being affected at some point.

Overall, these suspensions had frozen $2.6tn

worth of equity, according to Bloomberg calcula-

tions as of July 8th. Since then, shares have

started trading again as the government interven-

tions have helped to settle the turmoil at least

temporarily, with share prices recovering

somewhat.

The majority of the public companies in our pay-

ments universe (see end of article for composi-

tion) have continued to go up over the past three

months, with 12 out of 18 stocks posting gains.

Since the beginning of the year, 14 out of the 18

stocks are still in positive territory. The overall

payment index is up by 3% over the past three

months and almost 9% since the beginning of the

year.

The payments universe (alphabetical order):

Acceptance: Global Payments, Ingenico,

PayPoint, Vantiv, Verifone

Processing: Cielo, Euronet Worldwide, FIS, Fiserv,

Heartland Payment Systems, Total System Services

PSP/Online payments: Wirecard

Issuing/Prepaid solutions: FleetCor, Green Dot, WEX

Schemes: American Express, MasterCard, Visa

Sources: INNOVALUE research and company

filings; Google Finance for share price data

S&P 500

Schemes

issuing/Prepaid

PSP/Online payments

Processing

acceptance

The acceptance bucket gained almost 3% over

the last three months, with both PayPoint and

Global Payments outperforming their peers with

gains of 13% and 7% respectively. Verifone and

Vantiv posted losses of 5% and 2% respectively

during the same period, while Ingenico gained

less than 1%. The majority of analysts maintain

their buy rating on Verifone. PayPoint seeks to

further position itself within online and mobile

payments. At the same time, the company keeps

performing within its existing business, and the

majority of analysts have a positive outlook on

earnings. Global Payments, which has announced

its support for Apple Pay in the UK, has also con-

tinued to perform strongly since the beginning of

the year, gaining more than 30% year to date.

The comparables within the processing bucket

gained about 6% over the last three months. FIS

has been the underperformer losing 8% during

that period, while Cielo continued to perform

strongly, rising by 11% over the past three months

and more than 25% since the beginning of the

year.

Within the PSP and online payments category,

Wirecard AG lost 12% over the last three months

and is down about 4% since the beginning of the

year.

120

125

115

110

105

100

95

90

85

table 1: indexed stock price performance year-to-date July 8th 2015

Jan-15 Feb-15 Mar-15 april-15 Mai-15 Jun-15 Jul-15

Last 3 months

6

Page 1


Figure 1: Value and volume comparsion

Val

ue U

Sd b

illio

n

Num

bers of transactions

M&A Market development

2

4

6

8

10

0

10

20

30

40

50

02014Q2

2013Q3

2014Q4

2015Q1

2015Q2

47 47

36 38 39

3.6

1.62.4

8.18.3

The comparables of the issuing / prepaid solu-

tions bucket gained almost 6% over the last three

months, with Green Dot standing out with a 14%

gain over the period from early April. WEX posted

gains of 4% while Fleetcor lost about 1%. Green

Dot soared on June 22nd after the provider of pre-

paid debit cards said that it signed a new five-year

deal to be the program manager and issuing bank

for Walmart's MoneyCard debit card products.

The new deal was effective as of May 1st, and

replaces the current agreement which, would

have expired at the end of this year. Separately,

Green Dot announced a $150 million stock repur-

chase program. Despite the strong performance

over the past three months, Green Dot is still

down about 6% since the beginning of the year.

Lastly, the trading comparables within the

schemes bucket gained a total of 2% over the last

three months. Contrary to VISA and MasterCard,

which have gained 2% and 5% respectively,

American Express has continued to shed another

1% of market value since early April and is now

down about 16% since the beginning of the year.

Analysts have remained very positive on VISA

and MasterCard, which jumped upon the news

that China it will open up its market for clearing

domestic bank card transactions. Both VISA and

MasterCard also beat Q1 estimates, while Ameri-

can Express missed results on revenue, blaming

this on the strong dollar.

m&a aCtiVity

Benign capital markets have facilitated thriving

M&A development in the international financial

services industry. A total of 39 transactions have

been reported with a total disclosed volume of

USD 1.6 billion. Among those deals, Master-

Card’s acquisition of Applied Predictive Tech-

nologies, continuing consolidation among

acquirers as well as the dissolution of major

carrier-led mobile payment ventures have been

notable and will be detailed in this article.

M&A activity and deal characteristics

A total of 39 M&A transactions were announced

in the second quarter of 2015. This represents a

17 per cent decrease over the 47 deals announced

in the same period of 2014. The financial

terms of 12 transactions, with a total

volume of USD 1.6 billion, were dis-

closed. This quarter’s highlight is Mas-

terCard’s acquisition of Applied

Predictive Technologies (APT) for USD

600 million. APT uses cloud-based ana-

lytics to help clients measure marketing,

merchandising and operations efforts.

The deal advances MasterCard’s agenda

table 3: payments universe trading multiples as of July 8th 2015

0.0x

5.14.3 3.6

6.2

15.1

20.2

10.0x

20.0x

25.0x

30.0x

35.0x

7.77.1

12.1

3.7

29.6

15.8

19.9

10.9

6.2

15.113.8

21.5

18.0

13.8

EV/REV CY 13 EV/REV CY 14 EV/Ebitda CY 13 EV/Ebitda CY 14

acceptance Processing PSP/Online payments issuing/Prepaid Schemes

70%

60%

50%

40%

30%

20%

10%

0%

9.8%12.4%

24.7%

14.0%

23.5%

29.4%26.1%

47.0%

60.8%

23.8%

31.0%28.8%

45.0%

61.4%

table 2: payments universe operational metrics as of July 8th 2015

Revenue growth CY 13-14 Ebitda margin CY 13 Ebitda margin CY 14

8.1%

15.0x

5.0x

roBert Kayser

Senior Associate

transaction volume Value USd billion

to deliver technology offerings to merchants including

enhanced and actionable decision making, complement-

ing its recent acquisition of 5One, a London-based retail

consulting and analytics firm.

7

Page 1


Median enterprise value multiples

Revenue Multiple Ebitda multiple

Figure 2: median value, revenue, ebitda

16x

14x

2x

2012 2013 2015Q2

9.5

14.5 14.7

3.72.8

11.412x

10x

8x

6x

4x

2014

3.7

Target and buyers by region

The median EBITDA-multiple from 2014 to 2015 decreased, from

14.7x to 11.4x. The median revenue multiple from 2014 to 2015 raised

by 32 per cent, from 2.8x to 3.7x. Freelancer’s acquisition of Escrow.

com, valued at USD 7.5 million, equates to a multiple of 6.3x EBITDA.

The acquisition of Applied Predictive Technologies by MasterCard

equates to a multiple of 6.0x revenue or 3.9x invested capital. Snap-

deals’s acquisition of Freecharge for USD 450 million equates to a

multiple of 2.1x revenue or 4.0x invested capital. In a two-piece acqui-

sition Russian Qiwi paid 3.8x revenue of Contact and Rapid, an acqui-

sition valued at USD 117.8 million. The enterprise/revenue multiple for

Net Element’s acquisition of PayOnline is 21.3x.

Geographically, 44 per cent of the targets were based in Europe

(Q2/2014: 38%), followed by 41 per cent in North America (Q2/2014:

40%) and 8 per cent in Asia/Pacific. In a year on year comparison

Europe gained importance not only on the buyers’ side (+ 6%) but

particularly on the targets’ side (+ 16%). Generally, it seems that dis-

tribution has settled and there are only little swings. There is plenty of

money in the market. Goldman Sachs recently predicted that the

emerging financial tech industry threatens to grab USD 4.7 trillion in

revenue and USD 470 billion in profits from traditional banks. In a

recent letter to shareholders, JP Morgan CEO Jamie Dimon warned of

growing competition for established financial services providers in the

form of tech start-ups. JP Morgan said to follow two strategies: (1)

challenge to be as seamless and competitive as the challengers and

(2) partner where it makes sense. Both strategies are good news for

dealmakers in the fintech industry as the incumbents will seek to

stave off the competition by throwing money at the space through

investments and acquisitions.

38%

40%

44%

41%

34%

51%

36%

49%

10%11%8%15%

6% 8% 4% 5%

RoW asia/Pacific Europe North america

Q2/14 Q2/15 Q2/14 Q2/15

Targets Buyers

Figure 3: 2014-2015 funding comparsion

8

Page 1


Key drivers of and rationale for M&A activity

Generally Q2 has shown again more transactions

in established payment segments such as acquir-

ing and ATMs. Within the Northern European

payment market there has been already a remark-

able consolidation compared to other markets in

the region. With the acquisition of the merchant

acquiring business of Nordea, Nets expanded its

market position in the Nordics and established

itself among the Top-10 merchant acquirers in

Europe. After deal closing the combined Master-

Card and Visa transactions (no E-Commerce) will

increase to 1.142 million and volumes to USD 69.6

billion according to Nilson. With the acquisition

Nets intends to provide “better and more inte-

grated services” as the merchant commerce land-

scape is rapidly changing. An omni-channel

product offering which

includes services such

as acquiring, payment

gateway and value-

added services is

regarded as crucial

unique selling factor.

Consolidation in acquir-

ing has been driven fur-

ther with EVO

Payments’ acquisition of

Postbank POS Transact.

Following the acquisi-

tion of Deutsche Card

Services from Deutsche

Bank in 2012, this acqui-

sition fosters EVO’s German and broader Euro-

pean market position. The by European measures

relatively small POS Transact had to give in to sig-

nificant margin pressure especially after losing

major acquiring customer AirBerlin. The com-

bined business of EVO Payments and POS trans-

act amounts to a total of 902 million transactions

and nearly 211 thousand POS terminals.

Furthermore, ATM market consolidation has

gained momentum. Cennox and CapitalWorks

both strengthened their US market position with

the acquisitions of PSSI International and Banc-

source. In Europe Swedish Loomis expanded its

service capabilities with the USD 28.2 million

acquisition of the retail portion of Cardtronics

U.K. cash-in-transit operation. The deal is in line

with Cardtronics strategy to divest its non-core

businesses and rather focus on core ATM

customers.

Beyond this, mobile payments and commerce

product acquisitions remain in focus and a driver

for recent M&A activity. For example, telecom

companies in the United Kingdom (UK) and Swe-

den pulled back from joint mobile wallet initia-

tives. On the one hand O2 UK, as one of the three

UK mobile network

operators that

formed the mobile

commerce joint

venture Weve

three years ago,

has bought out

partners EE and

Vodafone to oper-

ate the brand as a

wholly-owned sub-

sidiary. As a conse-

quence O2 has

abandoned Weve’s

mobile payment

ambitions and

instead will focus on mobile advertising. On the

other hand Swedish telecommunications opera-

tors 3 Sweden, Telia, Tele2 Sweden and Telenor

Sweden sold 4T Sweden to PayEx. However, in

contrast to Weve, PayEx will continue the widely

used service with its more than 1.5 million users

and several thousand affiliated merchants. These

two deals mark the dissolution of additional

major carrier-led mobile payments ventures in

recent months, following the sale to Google of

US-based Softcard earlier in March this year.

Regarding mobile payments there have been

other interesting transactions. Online payment

service provider Optimal Payments bought FANS

Entertainment. The deal, which has been valued

at USD 13 million, will enable Optimal Payments

to offer innovative value-added mobile payment

services globally to customers and merchants.

The acquisition of Spanish based Seglan will allow

TAG Systems to offer mobile solution services

based on HCE and tokenization. Austrian

DIMOCO enhanced its European market reach

with the acquisition of French Mpulse. Together

with its recent expansion to Greece DIMOCO

anticipates an increasing acceptance for carrier

billing. Financial conditions of both deals have not

been disclosed.

Relatively new to payment related M&A transac-

tions are cryptocurrencies. Particularly Bitcoin

has recently experienced a sudden attention

within some European countries and thus reached

a rapid rise in value. After the acquisitions of Lib-

ertyX by CoinOutlet in the first quarter 2015 there

have been three deals in the second quarter.

Canadian Virtual Exchange was bought by Coin-

setter to expand market reach to Canada. BitNa-

tional acquired Bitcoin Brains for USD 1.2 million

to become the largest over-the-counter Bitcoin

brokerage and ATM network in Canada. Finally,

Brazilian CoinBR bought Coinverse in its ambi-

tions to expand aggressively and to become mar-

ket leader in Brazil.

After First Data set the stage for one of the big-

gest recent initial public offerings (IPO) last quar-

ter, fintech company SunGuard filed for an IPO as

well. After almost a decade after a group of pri-

vate-equity firms, including Bain Capital, Black-

stone and KKR & Co., acquired SunGard for

roughly USD 11 billion they seized the favourable

window of opportunity for a divestment. A trans-

formation plan which has been initiated in 2011

has a visible effect evoking a target valuation of

around USD 7 billion. In addition, SS&C Technolo-

gies Holdings and Fidelity National Information

Services are said to be interested in a full takeover

to accelerate their own growth. As private equity

firms usually prefer to exit investments cleanly

through full sales rather than IPOs there might be

a realistic chance if a deal comes together before

September when prospective investors in the IPO

process are invited.

new competitors are good news for dealmakers in the

fintech industry as the incumbents will seek to stave off the competition by throwing money at the space through investments and acquisitions.

Sources: Bloomberg, Intralix, Mergerstat, Nilson,

Reuters, company publications

9

Page 1


Target (Country) Round Volume (USDm)

Investor(s) Funding (USDm)

Description

1 2C2P (SG) C 7.00 Amun Capital, GMO VenturePartners 10.00 2C2P is Thailand based Payment Service Provider with special focus on emerging markets in Asia and alternative payment methods.

2 Acorns (US) C 23.00 e.ventures, Greycroft Partners, Great Oaks Venture Capital, Math Venture Partners, Garland Capital Group, Sound Ventures

3.00 The Acorns app allows people to round up purchases and use the change for commission-free micro investing.

3 Acquire Real Estate (US) Venture 6.00 N/D 6.00 Acquire Real Estate offers a crowdfunding platform for real estate properties.

4 Affirm (US) B 275.00 Spark Capital, Jefferies Group, Andreessen Horowitz, Khosla Ventures, Lightspeed Venture Partners

320.00 Affirm offers consumers a convenient way of purchasing online and offline, by sepparating the purchase from the payment and payment method.

5 ApplePie Capital (US) A 6.00 N/D 9.80 San Francisco-based ApplePie capital provides a lending platform for SMEs.

6 ApplePie Capital (US) Debt 28.00 Signia Venture Partners, Ron Suber, QED Investors, Camp One Ventures, Freestyle Capital

28.00 San Francisco-based ApplePie capital provides a lending platform for SMEs.

7 Applied Data Finance (US) Debt 50.00 Victory Park Capital 50.00 Applied Data Finance is a provider of an online lending platform designated to underbanked consumers and capital markets.

8 Argon Credit (US) Debt 75.00 N/D 75.00 Argon Credit is a online lender, providing loans between USD 1,000 - USD 20,000.

9 Artivest (US) A 15.00 Joe Lonsdale, Tim Kendall, Daniel Debow, Nellie Levchin, Archangel, Level VC, Signatures Capital, Deep Fork Capital, FinTech Collective, Anthemis Group, Nyca Partners, Peter Thiel, RRE Ventures, KKR

17.00 Artivest is a provider of an online investment platform that brings individual investors, institutional financial advisors and fund managers together to merge their interests.

10 Ascend Consumer Finance (US)

Seed 1.50 Birchmere Ventures, OCA Ventures, Mucker Capital 1.50 Ascend Consumer Finance provides an online lending platform.

11 AssetAvenue (US) A 11.00 Ron Suber, NetEase.com, Matrix Partners, DCM Ventures

15.00 AssetAvenue is a leading online P2P lending platform in the real estate sector.

12 Assetz Capital (UK) EquityCrowd- funding

4.50 N/D 4.50 Assetz Capital is a provider of a P2P lending solution operating in the UK to connect private/ institutional investors and business borrowers via an online marketplace.

13 Avant (US) Debt 400.00 Victory Park Capital, Jefferies & Company, KKR 1050.00 Avant operates a web based consumer-lending business for short term loans of up to USD 20k.

14 Azimo (UK) B 20.00 MCI Management SA, Anthemis Group, KRW Schindler Private Ventures, TA Ventures, Greycroft Partners, e.ventures, Frog Capital

31.00 Azimo is a global processing business providing internet and mobile based inter-country consumer money transfer services.

15 BankToTheFuture (UK) Seed 1.00 Bitcoin Capital 1.00 BankToTheFuture provides a crowdfunding platform for the purpose of investing in private firms.

16 Benefit Mobile (US ) Seed 0.90 Start Garden 1.50 Benefit Mobile is a provider of a pre-paid mobile wallet that includes digital gift cards and pushes discounts from 3 to 25% of the total transaction value.

17 Billtrust (US) C 25.00 Bain Capital Ventures, Goldman Sachs 54.00 Billtrust provides SaaS-based electronic billing and payments for consumer and business billing services.

18 Bitbond (DE) Angel 0.67 Christian Vollmann, Point Nine Capital 0.94 Bitbond is a Bitcoin based P2P lending platform.

19 Bond Street (US) A 10.00 Rory Riggs, George R. Hornig, H.P. Goldfield, Nathaniel Ru, Jonathan Neman, Nic Jammet, Michael Liou, Homebrew, Eagle Cliff Partners, David Chang, nathan Blecharczyk, Slow Ventures, Jefferies Group, Spark Capital

12.20 Bond Street offers a lending platform with 1 to 3 year loans between $50k and $500k.

20 Bond Street (US) Debt 100.00 Jefferies Group 100.00 Bond Street offers a lending platform with 1 to 3 year loans between $50k and $500k.

21 BrickVest (UK) Seed 1.00 N/D 1.00 BrickVest is an online investment platform that connects investors globally with real estate investment opportunities.

22 CARDFREE (US) N/D 4.00 N/D 14.00 CARDFREE offers a white label product suite for merchants to mobilize in mCommerce with payments, loyalty and couponing.

23 Case (US) Seed 1.50 Rochester Institute of Technology, High Line Venture Partners, RRE Ventures, Future Perfect Ventures

1.50 Case offers a bitcoin wallet based on an own hardware device, which is applicable as an open source firmware.

24 CashSentinel (CH) N/D N/D BAS, GoBeyond N/D CashSentinel is a mobile escrow service application for car dealers and their customers.

25 Circle (IE) C 50.00 Pantera Capital, Accel Partners, Breyer Capital, IDG Capital Partners, Oak Investment Partners, General Catalyst Partners, Goldman Sachs

76.00 Circle provides bitcoin based digital currency products with the purpose to revolutionise the global money handling infrastructure.

26 Clipp (AU) Venture 4.70 N/D 4.70 Australian Clipp provides a mobile payment app, including reward features, to bars and restaurants.

27 CoinTent (US) Seed 1.00 Andrew Tisch, Donna Dubinsky, Leonard Shustek, Mark Pincus, QueensBridge Venture Partners, Foundry Group

1.00 CoinTent is offering online micropayments via a digital wallet for consumers which want to get access to original and high-quality content by charging a small fee to view an article.

Venture CaPital aCtiVity & ComPany ProFiles Q2 2015

10

Page 1




Description

28 CommonLedger (NZ) Seed 1.00 N/D 1.00 New Zealand-based CommonLedger facilitates accountants access to their business clients financial data by providing an unifying accounting software.

29 Control (CA) Seed 1.50 BDC Capital Corporation, Vanedge Capital 1.50 Control offers an online payment solution, which connects various payment providers, e.g. Stripe, Paymill, Dwolla, PayPal, PIN Payments, Pagar.m, and consolidates transaction data.

30 Corlytics (IE) Seed 1.10 Kernel Capital 1.10 Irish Corlytics is a provider of a risk analysis software aimed to banks and financial companies.

31 Credifi (US) A 8.00 OurCrowd, Carmel Ventures, Battery Ventures 8.00 New York based Credifi provides a big data analytics platform regarding financial markets.

32 Credit Karma (US) D 175.00 Viking Global Investors, Valinor Management, Tiger Global Management

368.00 Credit Karma allows users to access their credit filing fore free as well as debt management and tools for tracking and optimization of ones personal credit score.

33 Crowd2Fund (UK) A 3.00 N/D 3.00 Crowd2Fund provides a crowdfunding platform to high-growth UK companies.

34 Currency Cloud (UK) C 18.00 XAnge Private Equity, Notion Capital, Atlas Venture, Anthemis Group, Sapphire Ventures

35.00 Currency Cloud’s service creates transparency and offers cross border online payments with immediate currency conversion as B2B and third partie service.

35 CurrencyFair (IE) A 10.70 Frontline Ventures, Octopus Investments 15.40 CurrencyFair offers online money transfer and remittance services with real time foreign exchange rates.

36 Dealstruck (US) Debt 50.00 N/D 50.00 US-based Dealstruck provides an online lending platform to conect SMEs with investors.

37 Dealstruck (US) A 8.30 N/D 9.50 US-based Dealstruck provides an online lending platform to conect SMEs with investors.

38 Digit (US) A 11.30 Hans Morris, Google Ventures, Baseline Ventures, General Catalyst Partners

13.80 Digit provides a financial management tool that pulls out small amounts of money regularly from a clients bank account depending on the clients account's spending patterns and transfers it into a Digit account.

39 digitalBTC (AU) Venture 2.80 N/D 2.80 digitalBTC provides digital currency solutions, including a mobile app to manage transactions as well as business software to financial institutions.

40 DoPay (UK) Seed 2.00 ACE & Company, plus a syndicate of angels from the banking, private-equity and hedge-fund industries

3.40 DoPay offers a payroll and cash management service for companies as well as a mobile banking device to unbanked employees.

41 DriveWealth (US) A N/D Route 66 Ventures N/D DriveWealth provides an investment and trading platform, which can be used either online or mobile.

42 Droplet (UK) Seed 0.89 London Co-Investment Fund 2.40 Droplet is a provider of a mobile payment app, including loyalty rewards.

43 EDO Interactive (US) E 20.00 Baird Capital, VantagePoint Capital Partners 93.50 EDO Interactive transactional advertising services target consumers with fitting advertising campaigns without interfering with their regular payment behaviour.

44 eGifter (US) Venture 3.50 94Bits, Angel Dough Ventures, BDS Capital, Long Island Angel Network

9.00 eGifter lets users send personalized gifts alone or together with a group of friends that can be stored in a mobile app or as a digital bar code.





47 Elorus (GR) Seed 0.55 N/D 0.55 Greece based Elorus is a provider of an online invoicing and billing solution.

48 eToro (CY) Venture 12.00 CommerzVentures GmbH 72.90 eToro offers an online investment marketplace allowing more than 4 million users to trade currencies, commodities, indices and stocks globally.

49 EverCompliant (IL) A 3.50 Joey Low, Nyca Partners, Carmel Ventures 3.50 Israel-based EverCompliant provides a security solution to acquirers and PSPs for the purpose of detecting, analysing and preventing cyber risk.

50 Exchange Corporation (JP) A 8.30 SIG, Arbor Ventures 12.80 Japan-based Exchange Corporation developed the online payment service Paidy, allowing consumers to make a deferred payment without a credit card.

51 EZBOB (UK) C 42.00 Oaktree Capital Management 2.00 EZBOB provides an automated online lending platform for SMEs.

52 Faircent (IN) Seed 0.25 M&S Partners 4.30 India-based Faircent is a P2P Marketplace where borrowers and lenders connect directly.

53 Feedzai (US) B 17.50 Espírito Santo Ventures, Sapphire Ventures, Oak HC/FT

26.10 FeedZai develops big data based fraud prevention solutions.

54 Fellow Finance (FI) N/D 2.00 Taaleritehdas 2.00 Fellow Finance is a provider of a P2P lending platform.

55 Fintellix (IN) N/D 15.00 N/D 27.40 Fintelli offers business analytics, risk and compliance solutions to banks, including data warehouse aimed to serve banking tasks such as core banking, trading, cards management and treasury.

56 FriendlyScore (UK) Seed 0.38 Mercia Fund Management / £150k 0.40 FriendlyScore provides an online P2P lending platorm.

57 Funding Circle (UK) E 150.00 Temasek Holdings, Sands Capital Ventures, Baillie Gifford, DST Global

273.20 Funding Circle operates a marketplace for C2B lending where consumers can lend their money to multiple SMBs in the UK.

11

Page 1




Description

58 Funding Options (UK) Venture 3.10 GLI Finance 4.70 Funding Options does loan brokerage and provides a funding platform where customers find products from suitable credit providers.

59 Gem (US) Seed 1.30 Robert Wilson, Drummond Road Capital, Tekton Ventures, Amplify.LA, Baroda Ventures, Birchmere Labs, ECEG Partners, RRE Ventures, First Round, KEC Ventures

4.90 Gem provides developers with a Bitcoin platform, eliminating the pain of building Bitcoin security infrastructure into their apps.

60 GMO Internet (JP) N/D 65.00 Mitsui Sumitomo Insurance Group N/D GMO Internet with its subsidiary GMO Payment Gateway is a Japan based online payments provider.

61 GoFundMe (US) Venture N/D Stripes Group, Iconiq Capital, Meritech Capital Partners, Greylock Partners, Technology Crossover Ventures, Accel Partners

N/D GoFundMe offers a crowdfunding platform for individuals, groups as well as organizations.

62 Hedgy (US) Seed 1.20 Sand Hill Angels, Marc Benioff, Tim Draper 1.20 US-based Hedgy provides a service to hedge bitcoin payments in essence as a trusted 3rd party that underlies a weighted pricing index called the TradeBlock XBX.

63 HomeSlice (US) A N/D N/D N/D HomeSlice provides a free and cross-platform (Android and iOS) mobile app for the purpose of financial management to individual clients.

64 IFAN financial (US) N/D 2.50 Sea Otter Global Ventures N/D IFAN financial offers a mobile payment app that enables users to do payments and fund transfers.

65 iFunding (US) Venture 0.97 N/D 1.20 iFunding provides a real estate investment platform, including monitoring features and webinars for investors.

66 Ingo Money (US) Venture 6.70 MissionOG 15.10 Ingo Money Network provides a smartphone app that cashes money from an approved check to a prepaid card balance.

67 Intelligent Point of Sale (UK) Angel 0.77 N/D 0.77 Intelligent Point of Sale is a provider of an mPos solution for several businesses, incl. restaurants or public transportation.

68 itBit (US) A 25.00 Solon Mack Capital, Crypto Currency Partners, James Pallotta, Raptor Capital Management, Jay W. Jordan II, Liberty City Ventures, RRE Ventures

28.30 Singapore-based itBit provides a bitcoin exchange platform for fiat currentcies into BTC.

69 iyzico (TUR) B 6.20 Endeavor, 212 Limited, The World Bank, Speedinvest, International Finance Corporation

9.00 iyzico enables the acceptance of online payments with fast onboarding.

70 Jimubox (CHN) C 84.00 Magic Stone Alternative, Ventech China, Shunwei Capital, Xiaomi, Matrix Partners China, Zhong Capital Fund, Mandra Capital, Investec Bank

131.20 Jimubox is an online P2P lending service in China.

71 Justworks (US) B 13.00 Index Ventures, Thrive Capital, Bain Capital Ventures 20.00 Justworks provides a solution for payroll, the payment of employee benefits as well as features to serve HR related issues.

72 Kantox (UK) B 10.90 Cabiedes & Partners, Idinvest Partners, Partech Ventures

21.10 Offers currency conversion via matching transactions from a network of SME clients, complemented by own capital market access.

73 Koho (CA) Seed 1.00 Stanley Park Ventures., Highline, Hedgewood, Ferst Capital, Joe Canavan

1.00 Koho provides a mobile payment app exclusively for clients in Canada.

74 Kxter (US) Seed N/D N/D N/D Kxter provides a crowdfunding platform with several investment types, e.g. VC or angel investments, in collaboration with the Bank of America.

75 Lavu (US) A 15.00 Aldrich Capital Partners 15.00 Lavu provides a POS payment system mainly to restaurants and bars which work with iPads, iPod Touch, and iPhone.

76 LendInvest (UK) A 34.30 Kunlun 47.10 UK based LendInvest is a lending platform provider for British residential and commercial mortgages.

77 LendKey (US) Debt 8.00 Silicon Valley Bank 12.20 LendKey is a lending platform technology infrastructure provider.

78 LoanHero (US) Seed 1.70 National Network of Angel Investors 2.10 Loan Hero is a provider of a lending solution where borrowers are submitting a digital application forms directly at the point of sale and getting the credit decision within a very short time afterwards.

79 LoanHero (US) Seed 20.00 National Network of Angel Investors 20.00 Loan Hero is a provider of a lending solution where borrowers are submitting a digital application forms directly at the point of sale and getting the credit decision within a very short time afterwards.

80 Loop Commerce (US) B 16.00 Mohan Gyani, Silas Chou, Roy Rubin, Michael Scharff, Dan Rose, PayPal, Oren Zeev, Dovi Frances, Andrew Fine, Chuck Geiger, Ken Seiff, Mark Carges, Wicklow Capital

29.20 Loop Commerce provides e-Commerce merchants a gifting checkout/API for online payments through which any product can be bought and sent as a gift.

81 Lufax (Ch) Venture 485.00 BlackPine Private Equity Partners, CDH Investments, China International Capital Corporation

485.00 China-based Shanghai Lujiazui International Financial Asset Exchange (“Lufax”) provides a P2P lending platform.

82 Mirror (US) A 8.80 Tim Draper, RRE Ventures, Crosslink Capital, Battery Ventures, Route 66 Ventures, Ripple Labs

12.80 Mirror offers a peer-to-peer trading platform, cleared on the Bitcoin blockchain, that enables both individual and business clients to create and exchange financial contracts.

83 Miura Systems (UK) Venture 16.00 DFJ Esprit 16.00 Miura Systems offers secure electronic hardware for POS and mPOS payments.

84 Mobi724 Global Solutions (CA)

N/D 3.00 N/D 3.00 Canada based Mobi724 Global Solutions provides both POS and mPOS payment devices, including couponing features, to clients in United States, Canada, South America, and Asia.

85 MobiQwik (IN) B 25.00 Tree Line Asia, Sequoia Capital, American Express, Cisco Investments

30.30 MobiKwik offers a mobile wallet for the purpose of ecommerce, P2P money transfer as well as bill payments.

86 Monese (UK) Venture 1.80 Shakil Khan, SmartCap AS, Seedcamp 1.80 Monese offers a mobile banking and payment app without minimum balance requirements, charging fees per transactions.

12

Page 1




Description

87 Money360 (US) Debt 110.00 N/D 111.00 Money360 is a online marketplace to get P2P loans or make investments both related to real estate.

88 MoneyStream (US) A 3.20 Bruno Bowden, H&R Block 3.20 US-based MoneyStream offers a personal finance service which enables clients to track personal spendings and to manage bills via desktop or smartphone application.

89 Moula (AU) A 30.00 NCN Investments, Liberty Financial Companies 0.90 Moula provides a lending platform to small and medium businesses with fundings between $1,000 and $100,000.

90 MX (US) A 30.00 Commerce Ventures, Digital Garage, USAA 50.00 Utah-based MX provides a so called omnibanking service to financial institutions that comprises account aggregation, auto-categorization and money managment features.

91 MyPoolin (IN) N/D N/D Steve Sue, Gautam Gandhi, Arjun Malhotra, Amit Ranjan, Sunil Kalra, Rajan Anandan, Sharad Sharma

N/D MyPoolin is a sub organisation of the New Delhi based Aprogift and provides money transfer among friends.

92 New Media Insight (US) N/D 2.00 Premier Venture Partners 2.00 The New Media Insight Group provides a system that allows merchants to accept mobile payments, including loyalty and gifting features.

93 Newgen Payments (IN) Angel N/D Jan Manten N/D Newgen Payments offers a secure payment gateway, SEO & optimization, webshop design and other services for online and mobile payments.

94 Nubank (BRA) B 30.00 Kaszek Ventures, QED Investors, Sequoia Capital, Tiger Global Management

46.30 Nubank is a Brazil based provider of smart credit card that is connected to a mobile app and lets ist users track their expenses.

95 Number26 (GER) A 10.70 Redalpine Venture Partners, Earlybird, Daniel S. Aegerter, Valar Ventures

12.70 NUMBER26 is a Berlin based direct banking provider that aims to redifine direct banking via improved convenience and easy to handly personal financial management services.

96 Omise (TH) A 2.60 Sinar Mas Indonesia, True Incube, 500 Startups, Thai telco True Group, 500 Tuk Tuk, East Ventures, SMDV

2.90 Omise is an online payment provider for the growing e-commerce market in South East Asia.

97 Open Bazaar (US) Seed 1.00 William Mougayar, Union Square Ventures, Andreessen Horowitz

1.00 Open Bazarr provides Bitcoin infrastructure which for P2P payments.

98 Oradian (HR) Seed N/D Africa Angels Network, Pule Taukobong, Moaffak Ahmed, Esther Dyson, Day One Capital Fund Management, Playfair Capital, Credo Ventures

N/D Oradian provides a banking solution to microfinance institutions in order to overcome technology obstacles they are sometimes faced with by implementing core banking processes.

99 OrbitRemit (NZ) A 1.00 N/D 1.00 New Zealand-based OrbitRemit provides online money transfers to clients for cross border transactions.

100 Paidy (JP) A 8.30 Arbor Ventures, SIG Asia, MS Capital N/D Paidy provides an online payments solution by using an underlying mobile phone number and email address only.

101 Patch of Land (US) A 23.60 Marek Olszewski, SeedInvest, Patrick Gannon, Ron Suber, SF Capital Group

24.90 Patch of Land brings together institutional investors and private borrowers to exchange funds for asset backed loans on their online platform.

102 Payfirma (CA) A 13.00 N. Murray Edwards, Great West Lifeco, New Brunswick Investment Management Corporation, CIBC World Markets, AGF, Dundee Capital Markets

23.50 Payfirma offers a platform for online as well as mobile payments, with latter using a card accepting dongle.

103 Paygevity (US) Conver- tible Note

0.25 N/D 0.25 Paygevity provides a platform integrating vendor management, vendor payments (payment processing) and a comprehensive vendor analytics dashboard.

104 PayItSimple (IL) N/D 10.00 Simpel 10.00 PayItSimple is a payment service provider that offer consumers the ability of making retail or web purchases by using interest-free installments.

105 PayNearMe (US) F 14.70 N/D 71.20 PayNearMe offers consumers a cash based online payment method, where they pay at offline stores (e.g. 7-Eleven) for bills or agents for their online purchased goods or services.

106 PayRange (US) A 12.00 Max Levchin, Osama Bedier, Google Ventures, Nyca Partners, Matrix Partners

15.20 PayRange developded a BLE-based mobile payment solution for vending, parking, transit ticketing, laundry, amusement, and more.

107 Payzer (US) A 4.20 Route 66 Ventures, Grotech Ventures 4.20 Payzer enables online and mobile payments via its All-In-One Financial Tool.

108 PeerIQ (US) Seed 6.00 Eric Schwartz, Dan Doctoroff, Arthur Levitt, Vikram Pandit, John Mack

6.00 PeerIQ is creating tools to analyze, access, and manage risk in the peer-to-peer lending sector.

109 PeerNova (US) Venture 5.00 Overstock.com 14.00 PeerNova provides innovative Blockchain technologies.

110 PennyOwl (US) Seed 1.30 Enterprise Ireland, Silicon Valley Bank, Richard Fontaine 1.30 PennyOwl provides a mobile device for the purpose of responsible financial education of children, by managing their allowance and tracking their spending activity.

111 Perseus (US) Venture 20.50 Goldman Sachs 20.50 Perseus offers an online trading platform to more than 300 exchanges and markets in 18 countries globally, including a range of consulting services.

112 Pier (US) Seed 2.00 Ceyuan; ZhenFund 2.00 Pier provides a mobile money lending platform for the purpose of online credit applications.

113 Pipelend (PR) Seed N/D N/D N/D Puerto Rico-based Pipelend provides an online lending platform.

13

Page 1




Description

114 PolicyBazaar (IN) D 40.00 ABG Capital, Steadview Capital, Ribbit Capital, Tiger Global Management, PremjiInvest

69.60 Policybazaar is an Indian online insurance comparison platform for both general as well as life insurance policies.

115 PPDai (CHN) C N/D Susquehanna International Group, Sequoia Capital, Lightspeed China Partners, VMS Capital, SIG, Legend Capital

70.20 Shanghai-based PPDai is a online P2P money lending platform.

116 Praesidio (US) Seed 1.70 N/D 1.70 US based Praesidio offers a cyber security solution to handle big data by enabling banks to search and interpret large, disparate sets of relevant data.

117 Prairie Cloudware (US) Venture N/D N/D N/D US-based Prairie Cloudware offers a payment gateway for mobile payment transactions.

118 PrimeRevenue (US) Private Equity

80.00 Brown Brothers Harriman 91.60 PrimeRevenue provides a financial management solution for businesses in over 50 countries and in 22 different currencies.

119 PromisePay (AU) Seed 2.00 Cultivation Capital, Mark Harbottle 2.30 PromisePay is a payment service provider for companies which seek to outsource the entire payment process.

120 Propel(x) (US) Seed 1.50 IDG Capital Partners, ZhenFund, TEEC Angel Fund 1.50 Propel(x) offers an online investment platform to connect investors and deep technology startups.

121 Prosper (US) Debt 165.00 USAA, Passport Capital, Breyer Capital, BBVA Ventures, Neuberger Berman Group, SunTrust Bank, Credit Suisse

354.90 Prosper is a P2P lending marketplace for up to USD 25k that includes social scores and group affiliation criterias to lenders.

122 Pumpkin (FR) N(D 0.79 N/D N/D Pumpkin offers a mobile payments device to send and receive money to and from friends.

123 RealtyShares (US ) A 10.00 General Catalyst Partners, Menlo Ventures 11.90 RealtyShares facilitates collective realestate investments among professional and high net worth private investors.

124 Reveal (US) Seed 1.50 Resolute.vc, The Stanford StartX Fund, Baroda Ventures, Boost VC, Barry Silbert

1.50 Reveal is a provider of social media platform that usesan own integrated cryptocurrency Reveal Coins.

125 Ripple Labs (US) A 28.00 Crypto Currency Partners, RRE Ventures, Route 66 Ventures, Core Innovation Capital, Bitcoin Opportunity Fund, China Rock Capital, AME Cloud Ventures, Seagate Technology, CME Group, Security & commodity exchanges, IDG Capital Partners

34.40 Ripple Labs develops the peer-to-peer and virtual currency protocol Ripple that can be used to globally make transactions in any available currency.

126 RobinHood (US) B 50.00 Ribbit Capital, Social Leverage, Index Ventures, Vaizra Investments, New Enterprise Associates

66.00 Robinhood develops a mobile stock trading application with 0% fees for transactions by leveraging technology and reducing overhead.

127 Satoshi Citadel Industries (PH)

Seed 0.10 N/D 0.10 Satoshi Citadel Industries is the first and largest universal Bitcoin company in the Philippines.

128 ShareIn (UK) Seed 1.00 N/D 1.00 ShareIn is a crowdfunding platform that connects investors to companies who need equity funding.

129 SigFig (US) N/D 1.00 N/D 30.00 US based SigFig offers an online investment management platform that is also applicable with mobile phones.

130 SimplyTapp (US) N/D N/D Verizon Ventures N/D SimplyTapp provides Host Card Emulation (HCE) solutions for cloud-based mobile payments.

131 Smava (GER) B 16.00 Phenomen Ventures, Earlybird Venture Capital, Neuhaus Partners

29.10 Smava provides a P2P-Lending platform where investors provide the funds to loan money to borrowers.

132 Square (US) Private Equity

N/D N/D 590.50 Square provides a hardware dongle turning regular smartphones into POS as well as apps for mobile payments and acceptance.

133 StockSpot (AU) A 1.20 Global Founders Capital, H2 1.30 Australia-based StockSpot provides an online investment adviser platform.

134 Stox (CA) A 8.00 Singulariteam 8.00 Canada-based Stox is a provider of an online stock trading platform.

135 SumUp (UK) D N/D N/D 40.00 SumUp provides a hardware solution for the (mobile) acceptance of peer-to-peer and consumer to business card based payments with chip&pin security.

136 SupportPay (US) Seed 1.50 Bob Bozeman, T5 Capital 2.80 SupportPay ia a financial platform that automates child support payments and related expenses.

137 SureCash (BD) B 7.00 The Osiris Group 7.00 SureCash provides a mobile banking solution that comprises all routine transactions, for instance deposit and money withdraw as well as money sending.

138 Swave (UK) N/D N/D Lloyds, Citi N/D Swave provides a personal savings app which monitors spendings to improve a users actual financial outcomes.

139 Symbiont (US) Seed 1.30 GETCO, Celeridem FinTech Fund, Scott A. Carmilani, Matt Andresen, Duncan L. Niederauer

1.30 Symbiont offers a virtual currency payment platform.

140 TabbedOut (US) C 21.50 New Enterprise Associates, Morgan Creek Capital Management, NEA, Wellington Management

39.00 Tabbedout eases the consumer (mobile) payment process within bars or restaurants, enabling the user to view and pay his tab through a mobile app.

141 Tilt (US) Venture N/D N/D N/D Tilt is a provides a crowdfunding platform.

14

Page 1




Description

142 TouchBistro (US) A 6.00 Difference Capital, Relay Ventures, Kensington Capital 11.50 TouchBistro offers an iPad-based POS systems to restaurants, fast food joints, food trucks, coffee shops and others in the food services industries.

143 Tradeworks (formerly Magick) (DK)

Angel 2.00 N/D 2.50 Tradeworks offers an online trading platform to individual traders as well as global financial institutions.

144 TravelersBox (TR) Venture 4.50 iAngels, Pitango Venture Capital, Ehud Levy, Hagai Tal, Zohar Gilon, Yuval Tal, Global Blue

4.50 TravelersBox offers a depositing serviceat international airports that lets individuals convert leftover foreign currency bills and coins into gift cards or to make a donation.

145 Trizic (US) Seed 2.00 Operative Capital 2.00 Trizic offers a wealth management solution which enables both advisors and customers for trading, cash and portfolio management together with billing and reporting features.

146 Tyfone (US) C 6.60 CIA, In-Q-Tel 11.90 Tyfone is a provider of ID and secure transaction solutions which are implemented in a platform for both mobile devices and personal computers.

147 Uanbai (CL) Seed 0.10 Start-Up Chile SCALE (Chilean government) N/D Chile-based Uanbai is a trading hub that connects sellers offering goods via social networks and buyers who can purchase those products via one-click payments.

148 Vested Finance (US) Seed 5.00 Sandleigh Ventures 5.00 Vested Finance is a provider of an online investement platform that connects students striving higher education and investors, that finance students education in exchange for a percentage of their future earnings.

149 Vogogo (CA) B 12.50 Beacon Securities, Clarus Securities, Salman Partners 21.00 Canada-based vogogo is a payment service provider offering a web-based payments collection service.

150 Vouch (US) A 6.00 IDG Ventures India, Greylock Partners, First Round, Cooley LLP, The Stanford StartX Fund, Data Collective, Core Innovation Capital

9.00 Vouch provides a lending-platform giving loans to individuals based on their social network of people vouching for them.

151 WePay (US) D 40.00 FTV Capital 74.20 WePay provides an online payments platform with merchant accounts and consumer accounts for peer-2-peer, group or B2C payments.

152 Yoyo (UK) A 10.00 Taavet Hinrikus, Imperial Innovations 15.00 Yoyo is a London-based mobile payment application where consumers earn loyalty points with every transaction they initiate with the Yoyo app.

153 ZenPayroll (US) B 60.00 Altimeter Capital, Glynn Capital Management, Kleiner Perkins Caufield & Byers, General Catalyst Partners, Ribbit Capital, Emergence Capital Partners, Google Capital

86.10 ZenPayroll offers an easy to use cloud-based payroll application automatically and paperlessly taking care of government payroll taxes and reporting.

sourCe INNOVALUE Research, based on publicly available information

15

Page 1


Deal aCtiVity m&a

Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

1 02/04/15 Bancsource USA Provides hardware, software, consulting, and maintenance solutions to financial institutions

ATM USA N/D

2 02/04/15 QwikCart USA Develops mobile software products Commerce USA N/D

3 07/04/15 Authentify USA Provides phone-based, multifactor authentication products Security USA N/D

4 08/04/15 FreeCharge India Provides coupon services Couponing/Loyalty India 450

5 09/04/15 Canadian Virtual Exchange Canada Operates as a trading platform for bitcoin General Payment Canada N/D

6 13/04/15 Shout for Good Australia Develops digital fundraising tool General Payment Australia N/D

7 14/04/15 JPay USA Develops entertainment and educational software and applications

Online Payments USA N/D

8 17/04/15 Everlink Payment Services Canada Provides electronic transaction switching solutions and related payment processing services

Processing USA N/D

9 20/04/15 Girosolution Germany Provides payment solutions with focus on municipalities Online Payments Germany N/D

10 22/04/15 Cerdo Bankpartner AB (Admin Payments & Savings Ops)

Sweden Provides administrative payments and savings services Processing Finland N/D

11 28/04/15 Applied Predictive Technologies USA Provides cloud-based predictive analytics software solutions Technology/Analytics USA 600

12 28/04/15 Escrow.com USA Operates an Internet website that provides escrow services General Payment Australia 7.5

13 30/04/15 4T Sverige (MyWallet) Sweden Provides electronic payment services Mobile Payments Sweden N/D

14 01/05/15 Akshay Software International (US) USA Provides online payment solutions Online Payments USA N/D

15 03/05/15 Bitcoin Brains Canada Provides Bitcoin brokerage General Payment Canada 1.2

16 04/05/15 Spondoolies-Tech Israel Manufactures digital currency servers General Payment USA N/D

17 07/05/15 Weve United Kingdom

Provides mobile marketing services Commerce Spain N/D

18 19/05/15 Contact Russia Provides money transfers and payment services General Payment Russia 58.9

19 19/05/15 Rapida Russia Provides payment processing system Processing Russia 58.9

20 20/05/15 DLRS (NI) United Kingdom

Provides security printing services General Payment United Kingdom

N/D

21 20/05/15 PSSI International USA Provides project management and electronic security for government, financial and commercial industries

ATM United Kingdom

N/D

22 21/05/15 SparkBase (Gift card business) USA Operates a gift card and loyalty software platform Couponing/Loyalty USA N/D

23 22/05/15 Seglan Spain Develops security products for information systems Mobile Payments Norway N/D

24 26/05/15 Cardtronics UK United Kingdom

Provides cash pick up and delivery services for retail stores ATM Sweden 28.2

25 27/05/15 IDchecker Nether- lands

Provides document verification services Security USA 10.6

26 28/05/15 FANS Entertainment Canada Develops mobile technology solutions Mobile Payments United Kingdom

13

27 28/05/15 PayOnline Russia Provides online payment solutions Online Payments USA 8.5

16

Page 1


Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

28 29/05/15 Postbank POS Transact Germany Provides commercial banking services Acquiring USA N/D

29 02/06/15 Pepperbill Germany Develops and markets a mobile point-of-sale system POS/mPOS Germany N/D

30 04/06/15 Prodo Telecom Sweden Develops and manufactures smart card technologies Security USA N/D

31 10/06/15 Ziftr USA Engages in mobile wallet, eCommerce loyalty and credit card processing

Mobile Payments Singapore N/D

32 11/06/15 Mpulse France Develops mobile messaging and payment transaction hubs Mobile Payments Austria N/D

33 11/06/15 Achievers USA Provides employee rewards and social recognition services General Payment USA 110

34 15/06/15 Nordea (Merchant Acquiring) Sweden Provides acquiring of international payment cards in the Nordic and Baltic regions

Acquiring Denmark 254

35 17/06/15 Regal Payment Systems USA Provides electronic payment processing services Processing USA N/D

36 18/06/15 Coinverse Brazil Provides bitcoin banking platform General Payment Brazil N/D

37 22/06/15 IME (M) Sdn. Bhd. Malaysia Provides money transfer services General Payment USA N/D

38 26/06/15 Brooks Brothers (Credit Card Portfolio) United Kingdom

Operates a clothing retailing business Issuing US N/D

39 30/06/15 White Payments UAE Provides a online payments solution focused on providing easy-to-use online payment applications for start-ups and small businesses

Online Payments United Arab Emirates

N/D

17

Page 1


aBout innoValue management aDVisors

INNOVALUE is a leading strategic management advisory firm dedicated to the financial services

industry. INNOVALUE’s clients are global ornational market leaders, regional specialists, innovators

and entrepreneurs that have trusted INNOVALUE for over a decade as their preferred advisors. In the

three practices - Payments, Banking and Insurance - INNOVALUE has a distinctive industry know-how

based on years of experience, deep and tested insights and established methodologies. The industry

practices are complemented by two cross-functional service lines: Corporate Finance and INNOVALUE

Solutions.

In the payments practice our clients range from high-growth mobile payment startups to established

financial institutions or telecom companies and from cutting-edge strategic players to high-profile

private equity and venture capital investors. We develop and implement tailored solutions on topics

of strategic importance – including Growth, Efficiency and M&A – on engagements across Europe and

beyond. Our clients uniquely benefit from the passion of our consultants in the payments industry,

through extensive international project experience, methodologies and the use of very current and

pertinent data and benchmarks.

ANDREAS HABERSETZERPartner

INNOVALUE Management Advisors Ltd.3 More London RiversideLondon, SE1 2REUnited Kingdom

e-mail [email protected]

imag

es: S

hutt

erst

ock

18

Page 1

payments - ey innovalue · funds for equity and debt capital from peer-to-peer,...

Documents