payments technology industry update q1 2020 · 2020-02-25 · 10 payments companies trade at 2020e...

Payments Technology

Industry Update

Q1 2020

2

Several Trends Are Reshaping The Payments Technology Landscape

Fraud remains

omnipresent

Evolution across

the value chain

B2B and cross

border payments

get digitized

Software & services

become

ubiquitous

Device-enabled

commerce

becomes

mainstream

Crypto / Blockchain

gets broader

acceptance

New payment

flows and rails

take centerstage

Financial inclusion

broadens the

opportunity

Consolidation

continues to

ramp up

3

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Fair

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Op

inio

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Eq

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&

Deb

t Cap

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Rais

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Insurance Tech

Bank Tech

Payments Tech

Digital Lending

Capital Markets Tech

Data & Analytics

Wealth Management Tech

Regulatory Tech

Enterprise Software

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▪ Middle-Market IB of the Year

▪ Cross-Border Boutique IB of the Year

▪ Advisory Firm of the Year

▪ FinTech Deal of the Year

▪ Corporate M&A Deal of the Year

▪ Middle-Market IB of the Year

▪ Middle Market Tech Deal of the Year

Business Intelligence

Several Trends Are Reshaping Payments Technology

4

5

2020s Will See Major Shifts Across the Payments Ecosystem (1/3)

▪ Incumbents will continue to evolve into a broad technology and financial services platform vs. just processing

Focus on creating, expanding and fortifying means to move money beyond cards

Accessing differentiated channels to accelerate conversion to digital payment

▪ More financial services companies will be formed to serve vertical niches (e.g. USAA for military families, etc.),

especially around gig economy workers (payments and digital lending)

▪ Transformation from an app-based economy to the interconnected, API-driven ecosystem that aggregates commerce

experiences and enables transactions across channels, devices and environments

▪ Fully integrated software offerings with embedded payment options for SMBs will become the norm, driving a dramatic

shift in business models of merchant acquirors and processors

▪ Similar to cloud computing, payments are becoming embedded within the core foundation and architecture of companies

– be it SaaS platforms, D2C or marketplaces – as it helps monetize interactions with end users

E.g., platforms like Shopify, Mindbody, Uber, DoorDash, and others

▪ PSPs, enabled by improved access and reduced cost of data mining, will increasingly focus on leveraging insights and

data to provide customers value-added services

▪ Features that are currently deemed cutting-edge and drive differentiation are becoming standardized and necessary

▪ Need for ever faster transaction speeds and reduced costs will be key catalysts driving innovation in payment rails

▪ Innovations around push-to-debt and RTP will drive emphasis and focus on instant payments

▪ We will witness uptake of new payment flows such as with instant payments and contactless payments in CP situations

▪ Continued rise of instant payments will additionally fuel investments to democratize access across B2C and B2B

Evolution across

the value chain

Software & services

become

ubiquitous

New payment

flows and rails

take centerstage

▪ Despite widespread adoption of EMV and biometrics, payment fraud and identity theft continues to plague the industry

due to human error and weak 3rd party protocols

▪ Tokenization continues to represent a next step in the evolution of digital payments

While tokenization still lacks broad implementation across the various constituents of the eco-system, acceptance

and adoption will continue to become wide-spread as key constituents start to push awareness and benefits

▪ Technology will drive rapid acceleration of financial inclusion by creating and catering to the unbanked and underbanked

E.g., tech-enabled PoS financing which offers transparent, fixed-payment alternatives to credit cards for consumers

and helps acquire customers and increase conversion rates for merchants

▪ Penetration of smartphones and enhanced access to internet (5G and cheaper) will drive mass adoption of digital

payments and provide access to financial services

Identity credentials will become further integrated into payment options

6


Sources: (1) First Data

▪ We will witness a continued transition to device-enabled commerce, which will drive enhanced acceptance of

marketplace models, making matching buyers and sellers more streamlined

▪ Scale, speed and engagement along with streamlining payments friction (driven by supply and demand side factors) will

push greater acceptance of contactless payment options

Contactless payments are gaining momentum and are expected to rise 66% over the next 10 years(1)

▪ Emphasis on mimicking the one-click checkout for online within the physical checkout experience

Fraud remains

omnipresent

Device-enabled

commerce

becomes

mainstream

Financial inclusion

broadens the

opportunity

7


▪ With less than 5% of all B2B payments made over credit cards, this segment continues to offer tremendous opportunity

for disruption from various constituents within the ecosystem

▪ Speed, transparency and security continue to grow as overwhelming requirements for innovation across B2B payments

Creation of new rails, advent of blockchain enabled technologies, need for efficiency and minimizing losses, are just a

few factors that will help fuel sustained adoption and growth

▪ Cross-border payment revenue is expected to exceed $2tn in 2020 and grow at 6% CAGR for the next 5 years

▪ From its first iteration in Bitcoin, cryptocurrencies and blockchain technology have been associated with digital payments

▪ This is the next logical step in payments technology, as blockchain technology establishes trust between untrusted

parties, similar to Visa, Mastercard and other such networks

▪ Adoption of blockchain across the B2B value chain will aid in the seismic shift towards digitizing B2B payments

▪ Many incumbents will pursue game-changing acquisitions to either capture a greater share of customer’s economic wallet

or to maintain their stronghold through changing consumer sentiments or to offset competition and threat of obsolescence

▪ Evidenced in 2019 as certain incumbents pursued industry defining acquisitions to either retain market share and

relevance within rapidly commoditizing business lines or to capture end-to-end commerce enablement and money

movement services

B2B and cross

border payments

get digitized

Crypto / Blockchain

gets broader

acceptance

Consolidation

continues to

ramp up

8

Innovation is Enabling Incumbents to Evolve Quickly, While also Fueling Disruptors

Continued Evolution Mimics the Broader Innovation, Driven by Changing Consumer Sentiments

▪ Monolithic card network

▪ Single-rail platform - focused on credit

▪ Consumer credit centric

▪ One-off value-added offerings around

fraud, managed services, card benefits

▪ Dependent on in-house development

▪ Technology platform enabling and

protecting movement of money

▪ Multi-rail network – expanding means to

move money beyond cards – ACH, cross-

border

▪ Holistic solutions capturing credit, debit,

prepaid, and B2B

▪ End-to-end services with full suite of cyber

solutions, data analytics, loyalty platforms,

processing assets

▪ Driving innovation through developer

ecosystem and acquisitions

▪ PayPal has evolved (organically and through

acquisitions / partnerships) to leverage

technological innovation and cater to ever-

changing consumer needs

Acceptance of V/MA on platform to move

beyond ACH

Powering mobile and domestic P2P

payments via BrainTree/Venmo and cross-

border P2P via Xoom

Diversifying into Bill Payments via TIO

Expansion into physical PoS with

acquisition of iZettle

Foray into online worker payout solutions

with Hyperwallet

Strengthening capabilities around fraud

detection toolkits via Simility

Broadening global reach via investment

into MercadoLibre (for LatAm) and

acquisition of GoPay (China)

Capturing end-to-end value chain from

commerce enablement to transacting

payment through acquisition of Honey

▪ Partnerships with leading incumbents such as

Citi, BofA, Discover, and others to provide

digital wallet and in-store solutions

▪ Birth of the iPhone and app ecosystem in

2007 inspired an entirely new class of

innovations – transforming world from an

analog to an app-based economy

▪ Stripe recognized the opportunity around

enabling internet commerce and successfully

leveraged access to cheaper, faster

computing infrastructure to create a

differentiated and much needed solution

▪ Merchant acquiring 3.0 – By providing easy-

to-integrate APIs, Stripe made payments

easier for e-commerce developers and

evolved into a multi-layer provider:

Core cloud-based foundation (security,

compliance, KYC, onboarding)

Payments

Applications

Lending

▪ Partnership with Lightspeed to advance in-

store and online payments for retailers and

restaurants

▪ As we transition from an app-based economy

to one where connected ecosystems

aggregate commerce experiences and enable

transactions across channels, devices and

environments, Stripe has spawned an entirely

new generation of payment platforms catering

to the internet economy

Then

Now

Card Network Digital Payments API Enabled Payments

Public Valuations Remain High, M&A Activity and Financings

Continue to be Robust

9

10

Payments Companies Trade At 2020E EV/EBITDA Multiples Ranging From 2.5x to

74.7x (1/3)

Source: Capital IQ as of market close on February 19th, 2020. (1) Nexi S.p.A’s IPO took place in May 2019

(2) Tyro Payments Limited’s IPO took place in December 2019

(3) Repay Holdings Corporation’s IPO took place in July 2019

(4) Adyen N.V.’s IPO took place in June 2018

(5) Afterpay Limited’s IPO took place in June 2017

(6) GreenSky, Inc.’s IPO took place in June 2018

(7) Sezzle, Inc.’s IPO took place in July 2019

(8) Boku, Inc.’s IPO took place in December 2017

▪ Category leaders and companies with a first mover advantage command higher multiples

▪ Larger companies may command higher multiples than smaller ones

▪ Factors such as expected future growth and future profitability have a material effect on multiples

(USD in Millions)

Company Equity ValueEnterprise

Value2020 YTD 1 Year 3 Year 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E 2019E 2020E

Networks

Visa, Inc. $ 459,057.1 $ 463,977.1 11.8% 44.9% 147.4% 19.7x 17.8x 28.9x 25.4x 33.6x 33.4x 10.8% 10.9% 68.1% 70.0% 16.1% 2.1

Mastercard, Inc. 349,734.1 351,273.1 13.7% 54.1% 217.5% 20.8x 18.0x 34.6x 30.1x 42.2x 38.3x 12.8% 15.5% 60.3% 59.9% 17.8% 2.1

Median 12.7% 49.5% 182.4% 20.3x 17.9x 31.7x 27.8x 37.9x 35.8x 11.8% 13.2% 64.2% 64.9% 17.0% 2.1

Merchant Acquiring

Global Payments, Inc. $ 62,383.5 $ 70,258.8 11.5% 59.0% 160.3% 12.9x 8.9x 34.9x 20.0x 51.8x 27.4x 61.5% 44.8% 37.1% 44.7% 19.4% 1.4

Square, Inc. 39,189.2 39,506.0 33.5% 4.9% 392.1% 17.7x 13.9x 95.1x 74.7x NM NM (32.4%) 27.5% 18.6% 18.6% 43.6% 2.2

Worldline S.A. 15,345.0 14,989.5 20.6% 57.1% 184.4% 5.6x 5.5x 22.7x 20.1x 63.0x 40.6x 35.1% 3.3% 24.8% 27.1% 27.6% 1.5

Nexi S.p.A. (1)11,105.2 14,085.5 30.0% NA NA 12.8x 11.6x 25.4x 20.6x NM 35.0x (40.6%) 10.2% 50.2% 56.1% 19.2% 1.8

PagSeguro Digital Ltd. 12,108.8 11,794.8 4.7% 31.1% 31.1% 2.1x 1.6x 5.5x 4.2x 41.4x 28.4x 115.9% 26.2% 37.3% 39.3% 27.5% 1.1

Cielo S.A. 4,622.9 6,648.7 (13.0%) (29.0%) (60.3%) 2.4x 2.6x 8.9x 11.1x 7.9x 15.8x (7.3%) (6.8%) 26.6% 22.9% (5.3%) NM

EVO Payments, Inc. 1,227.0 1,634.9 11.6% 11.3% 0.0% 2.8x 2.6x 10.3x 9.3x NM 41.7x 3.9% 7.7% 27.0% 27.9% 17.3% 2.6

Tyro Payments Limited (2)1,442.3 1,425.5 24.3% NA NA 11.2x 8.0x NM NM NM NM 28.3% 40.4% (6.3%) (1.9%) NM NM

Repay Holdings Corporation (3)764.9 918.4 28.6% NA NA 5.6x 4.2x 19.4x 14.3x NM 34.7x 25.6% 33.9% 28.9% 29.3% NM NM

Net 1 UEPS Technologies, Inc. 231.2 278.8 10.4% 5.6% (68.9%) 0.9x 1.0x NM NM 17.5x NM (37.4%) (7.1%) (1.8%) (3.3%) NM NM

Median 16.1% 11.3% 31.1% 5.6x 4.8x 21.1x 17.1x 41.4x 34.7x 14.7% 18.2% 26.8% 27.5% 19.4% 1.6

Digital Payments

PayPal Holdings, Inc. $ 145,387.9 $ 143,003.9 11.9% 26.3% 195.0% 8.1x 6.8x 29.6x 25.6x 54.9x NM 14.9% 18.0% 27.2% 26.6% 19.5% 1.8

Shopify, Inc. 63,303.8 62,653.9 33.2% 187.2% 817.4% 40.3x 28.6x NM NM NM NM 44.9% 40.7% 4.3% 1.9% 47.1% 39.4

Adyen N.V. (4)30,121.2 28,599.0 20.2% 35.4% NA 51.5x 38.8x NM NM NM NM (70.6%) 32.5% 57.3% 58.6% 43.3% 2.5

Wirecard AG 18,302.1 16,525.0 22.1% 14.0% 216.4% 5.4x 4.4x 18.6x 14.4x 42.2x 23.6x 30.2% 22.0% 28.9% 30.5% 36.0% 0.7

Afterpay Limited (5)7,931.2 7,803.5 32.2% 119.6% NA 30.1x 17.2x NM NM NM NM 132.8% 75.0% 9.3% 16.5% NM NM

Pushpay Holdings Limited 839.7 829.8 18.7% 42.0% 151.1% 7.5x 5.6x 41.8x 24.8x 31.8x 35.9x 20.7% 33.4% 18.0% 22.8% 20.1% 2.0

GreenSky, Inc. (6) 561.0 739.7 0.2% (21.7%) NA 1.4x 1.2x 4.4x 3.9x 40.0x 14.3x 28.4% 16.0% 31.4% 30.4% 13.0% 1.2

Sezzle, Inc. (7)249.6 254.2 8.5% NA NA 16.5x 9.0x NM NM NM NM 843.6% 83.1% (77.9%) (43.6%) NM NM

Boku, Inc. (8)251.0 224.8 (18.0%) (11.0%) NA 4.5x 4.2x 22.4x 20.4x NM 41.1x 41.7% 8.2% 20.0% 20.4% NM NM

Median 18.7% 30.9% 205.7% 8.1x 6.8x 22.4x 20.4x 41.1x 29.7x 30.2% 32.5% 20.0% 22.8% 28.1% 1.9

Revenue

GrowthEBITDA MarginCapitalization Trading Performance EV/ Revenue EV/ EBITDA P / E

Long

Term

EPS

Growth

PEG

Ratio

11


74.7x (2/3)

Source: Capital IQ as of market close on February 19th, 2020. (1) International Money Express, Inc.’s IPO took place in August 2018

(2) Bill.com Holdings, Inc.’s IPO took place in December 2019




(USD in Millions)



Prepaid / Debit

EML Payments Limited $ 1,065.1 $ 884.7 4.3% 200.0% 201.8% 10.6x 6.9x 33.7x 21.0x 65.6x 33.3x 48.1% 52.6% 31.4% 33.1% NM NM

Green Dot Corporation 1,814.8 875.5 50.6% (45.5%) 20.0% 0.8x 0.8x 3.8x 5.0x NM 20.8x 3.4% 0.3% 21.2% 16.3% NM NM

PaySign, Inc. 475.7 467.7 1.2% 35.7% 2,397.5% 12.8x 7.9x 40.6x 21.5x 63.2x 34.9x 55.8% 62.4% 31.6% 36.7% NM NM

Median 4.3% 35.7% 201.8% 10.6x 6.9x 33.7x 21.0x 64.4x 33.3x 48.1% 52.6% 31.4% 33.1% NM NM

Transaction Processing

The Western Union Company $ 11,016.2 $ 12,795.0 0.1% 52.2% 49.2% 2.4x 2.4x 9.7x 9.4x 9.9x 13.2x (5.0%) (1.1%) 24.9% 25.9% 8.2% 1.6

MoneyGram International, Inc. 196.2 923.5 33.0% 12.8% (78.5%) 0.7x 0.7x 4.5x 4.6x NM NM (10.7%) (1.0%) 16.0% 15.8% NM NM

PayPoint plc 833.6 805.9 (4.9%) 19.4% 26.8% 5.1x 5.1x 9.4x 9.3x 14.5x 14.3x (42.5%) 0.2% 53.9% 54.2% NM NM

International Money Express, Inc. (1)420.6 415.8 (10.7%) 6.4% NA 1.3x 1.1x 7.3x 6.3x NM 11.3x 37.2% 15.1% 17.8% 17.7% NM NM

Median (2.4%) 16.1% 26.8% 1.9x 1.8x 8.3x 7.8x 12.2x 13.2x (7.8%) (0.4%) 21.4% 21.8% 8.2% 1.6

B2B Payments

FleetCor Technologies, Inc. $ 28,750.2 $ 31,739.6 11.6% 37.7% 88.9% 12.0x 10.9x 20.9x 19.0x 28.4x 23.6x 9.1% 10.0% 57.2% 57.3% 15.6% 1.5

Edenred SA 13,216.9 15,044.3 8.4% 31.7% 154.5% 8.3x 7.8x 20.5x 19.0x 38.6x 32.5x 19.1% 6.6% 40.5% 41.0% 13.3% 2.6

WEX, Inc. 10,286.6 12,410.7 9.9% 31.9% 111.2% 7.1x 6.5x 18.4x 15.9x NM 22.5x 16.5% 10.0% 38.9% 40.9% 15.1% 1.5

Bill.com Holdings, Inc. (2)4,544.6 4,229.7 62.2% NA NA 32.6x 25.9x NM NM NM NM 99.6% 26.0% (4.6%) 0.0% NM NM

Median 10.8% 31.9% 111.2% 10.1x 9.3x 20.5x 19.0x 33.5x 23.6x 17.8% 10.0% 39.7% 40.9% 15.1% 1.5

POS Solutions

Ingenico Group $ 9,565.3 $ 10,677.4 44.8% 144.3% 77.3% 2.8x 2.8x 15.8x 15.1x 24.1x 25.9x 25.2% 0.5% 17.8% 18.6% 12.9% 2.0

PAX Global Technology Limited 575.4 246.7 8.8% 14.3% (20.4%) 0.4x 0.4x 2.8x 2.5x 7.2x 6.6x 7.2% 14.1% 14.4% 14.2% 10.3% 0.7

Median 26.8% 79.3% 28.5% 1.6x 1.6x 9.3x 8.8x 15.6x 16.2x 16.2% 7.3% 16.1% 16.4% 11.6% 1.4

Capitalization Trading Performance EV/ Revenue EV/ EBITDA P / ERevenue

GrowthEBITDA Margin

Long

Term

EPS

Growth

PEG

Ratio

12


74.7x (3/3)

Source: Capital IQ as of market close on February 19th, 2020.




(USD in Millions)



Payments Infrastructure

Euronet Worldwide, Inc. $ 8,026.5 $ 7,677.7 (9.0%) 7.5% 74.5% 2.8x 2.6x 12.7x 11.3x 32.9x 18.3x 9.2% 8.3% 21.9% 22.7% NM NM

NCR Corporation 4,105.1 7,155.1 (9.5%) 14.6% (33.2%) 1.1x 1.0x 6.7x 6.6x 36.8x 11.5x 5.9% 1.5% 15.8% 15.8% 3.0% 3.8

Cardtronics plc 1,910.5 2,636.9 (2.7%) 44.7% (3.2%) 2.0x 1.9x 8.6x 8.1x NM 16.1x 0.0% 4.2% 22.8% 23.3% 5.0% 3.3

Diebold Nixdorf, Inc. 662.0 2,522.3 (26.6%) (6.2%) (70.8%) 0.6x 0.6x 6.2x 5.7x NM 7.2x (3.6%) (3.5%) 9.2% 10.4% NM NM

Qiwi plc 1,320.7 788.9 9.2% 55.8% 61.9% 2.1x 1.8x 5.4x 3.8x 18.1x 8.0x (14.6%) 17.3% 39.0% 47.4% 30.0% 0.3

CPI Card Group, Inc. 9.5 302.5 (9.8%) (76.8%) (96.1%) 1.1x 1.1x 8.0x 7.4x NM NM 7.4% 3.8% 13.7% 14.4% NM NM

Median (9.3%) 11.1% (18.2%) 1.5x 1.4x 7.3x 7.0x 32.9x 11.5x 3.0% 4.0% 18.8% 19.3% 5.0% 3.3

Core Bank Solutions

Fidelity National Information Services, Inc. $ 98,087.3 $ 116,987.3 12.4% 47.1% 98.3% 11.3x 8.6x 27.8x 19.6x 50.4x 24.9x 22.6% 32.0% 40.8% 43.7% 11.2% 2.2

Fiserv, Inc. 85,294.7 106,300.7 7.0% 45.9% 114.1% 6.8x 6.6x 20.2x 17.5x 38.8x 24.9x 167.9% 3.7% 33.7% 37.5% 16.0% 1.5

Jack Henry & Associates, Inc. 13,338.2 13,265.7 19.1% 32.1% 91.2% 8.2x 7.6x 25.1x 23.5x 36.9x 44.8x 5.9% 8.1% 32.6% 32.2% 12.2% 3.7

ACI Worldwide, Inc. 4,005.3 5,267.3 (10.9%) 6.8% 73.9% 4.2x 3.5x 17.3x 12.2x NM 16.6x 24.9% 18.4% 24.2% 29.0% 15.0% 1.4

Bottomline Technologies, Inc. 2,168.3 2,188.6 (8.8%) (1.2%) 97.4% 5.1x 4.6x 22.4x 20.2x NM 34.0x 4.1% 9.6% 22.6% 22.9% 20.0% 1.7

Median 7.0% 32.1% 97.4% 6.8x 6.6x 22.4x 19.6x 38.8x 24.9x 22.6% 9.6% 32.6% 32.2% 15.0% 1.7

Capitalization Trading Performance EV/ Revenue EV/ EBITDA P / ERevenue

GrowthEBITDA Margin

Long

Term

EPS

Growth

PEG

Ratio

13

Valuation Multiples Are Driven by a Combination of Scale, Topline Growth, and

Margins


Enterprise Value / 2019E Revenue Enterprise Value / 2020E Revenue

Enterprise Value / 2020E EBITDAEnterprise Value / 2019E EBITDA

20.3x

10.6x 10.1x

8.1x

6.8x

5.6x

1.9x 1.6x 1.5x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

Networks Prepaid / Debit B2B Payments DigitalPayments

Core BankSolutions

MerchantAcquiring

TransactionProcessing

POS Solutions PaymentsInfrastructure

17.9x

9.3x

6.9x 6.8x 6.6x

4.8x

1.8x 1.6x 1.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

20.0x

Networks B2B Payments Prepaid / Debit DigitalPayments

Core BankSolutions

MerchantAcquiring



33.7x

31.7x

22.4x 22.4x 21.1x 20.5x

9.3x 8.3x

7.3x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

Prepaid / Debit Networks DigitalPayments

Core BankSolutions

MerchantAcquiring

B2B Payments POS Solutions TransactionProcessing

PaymentsInfrastructure

27.8x

21.0x 20.4x

19.6x 19.0x

17.1x

8.8x 7.8x

7.0x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

Networks Prepaid / Debit DigitalPayments

Core BankSolutions

B2B Payments MerchantAcquiring

POS Solutions TransactionProcessing


14

Payments Eco-System Continues to Experience Strong Topline Growth and

Expanding Margins


2019E Revenue Growth 2020E Revenue Growth

2020E EBITDA Margin2019E EBITDA Margin

52.6%

32.5%

18.2%

13.2%

10.0% 9.6%7.3%

4.0%

(0.4%)(5.0%)

5.0%

15.0%

25.0%

35.0%

45.0%

55.0%

65.0%

Prepaid / Debit DigitalPayments

MerchantAcquiring

Networks B2B Payments Core BankSolutions



64.2%

39.7%

32.6%31.4%

26.8%

21.4%20.0%

18.8%

16.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Networks B2B Payments Core BankSolutions

Prepaid / Debit MerchantAcquiring


DigitalPayments


POS Solutions

64.9%

40.9%

33.1% 32.2%

27.5%

22.8% 21.8%

19.3%

16.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Networks B2B Payments Prepaid / Debit Core BankSolutions

MerchantAcquiring

DigitalPayments



POS Solutions

48.1%

30.2%

22.6%

17.8%16.2%

14.7%

11.8%

3.0%

-7.8%

-15.0%

-5.0%

5.0%

15.0%

25.0%

35.0%

45.0%

55.0%

Prepaid / Debit DigitalPayments

Core BankSolutions

B2B Payments POS Solutions MerchantAcquiring

Networks PaymentsInfrastructure


15

M&A Activity Continues to be Robust (1/2)

Sources: S&P Capital IQ, Company Filings, Marlin & Associates

Date Target Acquirer(s) Description Enterprise Value ($mm)

02/04/20Provides cross-border payment services and foreign

currency exchange-related products n/a

02/03/20Provides payment solutions through in-store, mobile, and

online channels worldwide $10,498

01/27/20Provides value-added network services for credit card

and banking transaction processing $171

01/24/20

eNett provides B2B payment solutions to the travel

industry and Optal specializes in optimizing B2B

transactions$1,720

01/13/20Provides solutions for users to connect their bank

accounts to an app $4,900

01/13/20

Operates a singular commerce platform that enables

retail enterprises to deliver omni-channel shopping

experiences to customersn/a

01/09/20Offers software development, cloud services, and

payment solutions n/a

12/13/19Provides cloud-based accounts receivable automation

software and integrated payment solutions $104

11/20/19Offers online retail coupon services through a browser

extension or mobile app$4,000

11/18/19Allows payment processing for both online and offline

merchants$299

11/11/19Offers a prepaid card program to businesses and

individuals$359

16

M&A Activity Continues to be Robust (2/2)


Date Target Acquirer(s) Description Enterprise Value ($mm)

11/04/19Provides corporate international payments and foreign

exchange risk management services$908

10/20/19Provides a cloud-based POS system for the restaurant

and hospitality industries$43

08/06/19Platform for recurring billing and credit transfer

transactions for companies$3,190

08/04/19Offers acquiring and processing of payment solutions to

merchants$672

07/17/19White label payment gateway and mPoS solutions to

PSPs and merchantsn/a

07/17/19Provides mPoS for restaurants, food trucks, and grocery

stores n/a

05/28/19Provides issuer, merchant, and consumer payment

solutions and products$26,708

05/22/19Provides omnichannel payment and risk management

solutions in Europe$889

03/18/19Provides technology, merchant, and issuer electronic

payment processing services$43,000

02/28/19Provides electronic and cash automatic payment

services for consumers and businesses$750

02/18/19Develops vertically integrated point of sale operating

systems for fine-dining restaurantsConfidential

17

Financings Maintain Strong Momentum (1/2)

Date Target Acquirer(s) Description Transaction Size ($mm)

02/04/20Develops a B2B payments platform for banks, acquirers,

and enterprises to enable push payments over debit card $35

02/03/20 Develops cash allocation software solutions $15

01/27/20 Operates a cross-border B2B payments platform $80

01/17/20Provides accounts payable and payment automation

solutions for midsize companies $260

01/15/20Offers a financial software that enables peer-to-peer

(P2P) and peer-to-business (P2B) payments online $45

12/20/19Operates a global payments network using blockchain

technology $200

12/19/19Offers a cloud-based construction payment platform that

optimizes the exchange of preliminary notices $30

12/06/19 IPOProvides payment solutions and business banking

products to Australian enterprises$196

11/13/19

Offers a cloud-based technology that stores cardholder

data into a Spreedly vault and then uses tokenized

payment details for future transactions$75

09/19/19Develops APIs and tools that enable businesses to

accept and manage online payments $250

08/25/19Develops a QR code-based payment application that

serves offline retailers and businesses $50


18

Financings Maintain Strong Momentum (2/2)

Date Target Acquirer(s) Description Transaction Size ($mm)

08/06/19Provides payment solutions and consumer credit

products for merchants and consumers $460

07/25/19Provides payment processing solutions and banking

products such as credit cards, loans, and rewards $400

06/11/19Offers corporate credit cards and rewards programs on

rideshare, travel, and restaurants using a SaaS model$100

05/21/19Maintains an open API payment card issuing and

payment processing platform$260

05/21/19Provides international money transfer and payments

services$292

05/02/19Provides online payment solutions for American and

international businesses via an e-commerce payment

solution platform for mobile and online businesses$230

04/26/19Operates loyalty programs allowing users to use

Multiplus points for rewards with partner businesses$305

04/24/19Provides outsourcing and white label solutions for

electronic payments$1,000

04/11/19Offers payment acceptance technology and money

transfer solutions to banks and merchants in Italy$2,275

04/08/19Provides payment solutions and consumer credit

products$93

03/29/19Develops an Android point of sale and restaurant

management software for online ordering$250


The Premier FinTech Focused Investment Bank

19

FOCUS

TEAM

EXPERTISE

GLOBAL

PARTNERS

TRACK

RECORD

20

We Have an “Unfair” Competitive Advantage

▪ Unrelenting focus on the financial technology sector (20+ professionals exclusively focused on FinTech)

▪ Deep understanding of industry structure and drivers of value

▪ Extensive contacts at multiple levels among industry participants and financial investor firms

▪ Diverse team based across New York, Washington DC, Chicago, and Toronto

▪ Execution experience from some of the most highly regarded firms in the industry

▪ Real world and relevant operating experience

▪ 18 years of transaction success

▪ Our partners have worked at leading firms in FinTech

▪ The industry we serve is not defined geographically, nor are we

▪ Half of our transactions are cross-border

▪ 1/3rd of our clients are international

▪ We are long-term thinkers and believe in partnering with our clients through their entire evolution

▪ We are domain experts and offer independent and unbiased strategic counsel and advisory services to our clients

▪ We stay with you until the end

▪ 200+ closed transactions

▪ Numerous awards and accolades

▪ Recognized as an industry leader and expert by our peers and clients

“Bringing on the Marlin & Associates team

remains one of our great decisions. The

dedication of the team was on full display as we

approached this latest chapter for ClearStructure.

The guidance, creativity and true value-add that

they brought to the table helped ClearStructure

achieve goals we didn’t think were possible.“

-Scott Turley, CEO of ClearStructure

21

We Deliver Exceptional Results

Advisory Firm of the Year (US)

Gamechanger of the Year (US), Ken Marlin

Middle-Market Investment Bank of the Year (US)

Capital Raising Advisory Firm of the Year

Boutique Investment Banking Firm of the Year

Gamechanger of the Year (US), Ken Marlin

Middle-Market Investment Bank of the Year

TMT Advisory Firm of the Year (US)

Deal of the Year (Parthenon / BillingTree)


Small Tech Fund Raising of the Year for CRM

Professional Services (B2B) Deal of the Year

(2017)


Cross-Border Deal of the Year (2016)

“The team at Marlin & Associates helped us get

the best value for our company. They know the

players and values of this industry at a level few

can match. They guided us and brought multiple

highly qualified buyers into the process -

including FNZ, with whom we look forward to

joining. We thank the Marlin & Associates team

and look forward to working with them again in

the future.”

-Rob DeDominicis, CEO of GBST

“We have been delighted with the service

provided to us by Ken Marlin and his team. They

have been diligent and thorough, and also a

pleasure to work with. The Marlin team’s deep

knowledge of our industry makes them the

number one go-to firm when you want to sell your

business. They have seen and managed more or

less every possible situation and know the play

book on how to deal with them. The process was

meticulously planned and executed.”

-Justin Wheatley, CEO of StatPro

Led By an Industry Recognized Advisor to Technology Companies

22

▪ In 2011, Institutional Investor, the international publisher focused primarily on international finance, has named M&A’s

Founding Partner, Ken Marlin, as one of Institutional Investor’s Tech 50, which honored the 50 most “disruptive” figures in the

financial technology sector

▪ Institutional Investor calls these 50 people disrupters because they're changing the way Wall Street does business

▪ Ken was the only investment banker included on the list

▪ In 2014, Institutional Investor again named Ken as one of the 50 most influential people in financial technology

Candidates were evaluated by four primary sets of attributes: achievements and contributions over the course of a career; scope and complexity of

responsibilities; influence and leadership inside and outside the organization; and pure technological innovation

▪ Each year for the past five years, Institutional Investor named Ken as a member of the “The Fintech Finance 35: The

Financiers Who Place the Bets”

▪ Institutional Investor calls these 35 people the influential financiers that accelerate financial start-up’s paths to

commercialization

▪ “Deal making is as integral to the evolution of the financial technology industry as the technologies themselves and Ken Marlin has been in the thick of

it...” – Institutional Investor 2014

23

M&A’s Team Brings Relevant Transaction and Operating Experience

Woolley Capital Partners

Ken Marlin

Managing Member

Anup Agarwal

Senior Managing Director

Aalap Merchant


Billy Adams

Jordan Wittbrot

Sam Wilcox

Al SiscaNeil Chadda

Michael Maxworthy


Tom Selby


Dan Zircher


Chris Fieschko

Peter Manuselis

New York City | Chicago |

Washington, DC | Toronto,

Canada

24

Clients Choose us For Their Most Important Strategic Decisions (1/2)

Toronto, Canada

Marlin & Associates acted as exclusive strategic and financial

advisor to Tier1CRM

has received an equity investment from

Boston, MA & San Francisco, CA

Marlin & Associates acted as exclusive strategic and financial advisor to TradingScreen Inc.

London, UK

has sold a minority equity interest in its subsidiary

Singapore

London, UK

to

San Francisco, CA

has received a $30 million equity investment from

New York, NY


advisor to RapidRatings

New York, NY

has acquired

New York, NY

Marlin & Associates acted as exclusive strategic and financial advisor to Aquiline Holdings LLC

Charlotte, NC


advisor to Zenmonics


Jacksonville, FL

New York, NY

Secures Minority Investment in


advisor to Goldman Sachs.

New York, NY

has agreed to be acquired by

London, UK

Marlin & Associates acted as strategic and financial advisor to

StatPro Group plc

Pittsburgh, PA

A portfolio company of


Brisbane, Australia

Marlin & Associates acted as financial advisor to

GBST Holdings Limited

Edinburgh, UK

Orlando, FL

has received growth capital from

Marlin & Associates acted as exclusive strategic and financial advisor to

Kore.ai

Vancouver, BC

has been acquired by

Danbury, CT


advisor to ClearStructure Financial Technology, LLC.

Lake Success, NY

Wilton, CT

has received a majority equity investment from


advisor to Private Client Resources, LLC.

New York, NY


Denver, CO


advisor to NinjaTrader

New York, NY


New York, NY


advisor to SALIDO, Inc.

Troy, MI

Reston, VA


Marlin & Associates acted as exclusive strategic and financial advisor to

Zoomdata, Inc.

Mclean, VA


Phoenix, AZ

Boston, MA and San Francisco, CA


advisor to BillingTree

has completed a majority recapitalization with

Salt Lake City, UT

Chicago, IL

Marlin & Associates acted as exclusive strategic and financial advisor to iTransact Group, LLC


Vienna, Austria

received a majority investment from

New York, NY


advisor to AIM Software.

San Francisco, CA

has led a $60 million investment in

New York, NY

Marlin & Associates acted as exclusive financial advisor

Francisco Partners.

25

Clients Choose us For Their Most Important Strategic Decisions (2/2)


Darien, CT

Marlin & Associates acted as exclusive strategic and financial advisor to Investment Metrics

Atlanta, GA

Boston, MA


Chicago, IL

Marlin & Associates acted as exclusive strategic and financial advisor to OptionsCity Software

New York, NY


advisor to MSCI Inc.

New York, NY

has sold Financial Engineering Associates, Inc. to


Dallas, TX

Chicago, IL



advisor to InRule Technology, Inc.

Los Angeles, CA

London, United Kingdom

received an investment from


advisor to OpenGamma

New York City, NY

Lake Success, NY

Marlin & Associates acted as exclusive strategic and financial advisor to M&O Systems, Inc.


San Mateo, CA


advisor to Xignite.

received a strategicinvestment from

Tokyo, Japan


Port Talbot, United Kingdom



advisor to Vizolution

New York, NY

Palo Alto, CA


advisor to Alacra.


a portfolio company of

Campbell, CA


advisor to Trunomi.


Boston, MA

Windsor, CT

Marlin & Associates acted as exclusive strategic and financial advisor to Varden Technologies.


New York, NY

Dublin, Ireland

Marlin & Associates acted as financial advisor to Aquiline

Capital Partners.

has invested in

has sold the assets of

to

Marlin & Associates acted as exclusive strategic and financial advisor to CNO Financial Group.

Dublin, Ireland


Marlin & Associates acted as exclusive strategic and financial advisor to Information Mosaic.


New York, NY

has entered into a strategic alliance with

New York, NY


advisor to Alacra Inc.

Pleasanton, CA

Marlin & Associates acted as strategic and financial advisor to

Greenwich Associates

Livonia, MI


a division of Greenwich Associates, was acquired by


Stamford, CT

Marlin & Associates acted as exclusive strategic and financial advisor to Greenwich Associates

Mumbai, India

New York, NY



advisor to Hanweck Associates, LLC

Chicago, IL

26

Preferred Advisor to Founder-Owned Companies

Client Commentary

▪ Marlin leveraged its deep domain expertise in workflow automation &

related technologies space to conduct a methodical and disciplined

competitive process involving multiple potential investors

simultaneously

▪ Marlin managed the process and led the negotiations

▪ Marlin was the exclusive strategic and financial advisor to M&O

Systems

▪ Marlin managed the process, assisted in the negotiations and acted as

the exclusive strategic and financial advisor to Varden Technologies

▪ Marlin represented BillingTree and advised on the majority

recapitalization by Parthenon Capital Partners

▪ Marlin assisted the AIM Software management team in the process and

assisted in the negotiations

▪ Marlin helped the company close a transaction with Cint that included

senior positions within the newly combined entity for P2Sample’s

leadership

Buyer

▪ Marlin leveraged its deep domain expertise in the capital markets &

related technologies space to conduct a methodical and disciplined

competitive process involving multiple potential investors

simultaneously

▪ Marlin managed an extremely competitive process that resulted in

indications of interest and meetings with several high-profile buyers

27

Long and Successful History of Working with VC and PE Backed Companies

Lead PE / VC Backer Client Commentary

Sale

of

Ven

ture

an

d P

rivate

Eq

uit

y B

acked

Co

mp

an

ies –

Sele

ct

Tra

nsacti

on

s

▪ Marlin served the client with sophisticated performance

analytics and assisted in the negotiations

▪ Marlin managed the process, identified the buyer, assisted

in the negotiations

▪ Marlin worked diligently on the deal to craft materials,

initiate conversations, negotiate alternative offers with

multiple parties and final legal documents swiftly

▪ Marlin advised Bain Capital Ventures and undertook a

comprehensive search for identifying suitable buyers for

IVANS and positioned ABILITY + Applied Systems as the

most logical buyers

▪ Marlin managed the process, assisted in the negotiations

▪ Marlin crafted materials, initiated conversations and

negotiated alternative offers with multiple parties

▪ Marlin represented Information Mosaic in a very

competitive process that resulted in its acquisition by IHS

Markit

Buyer

▪ Marlin helped the company tell its “story” to the

marketplace and brought an investor who not only

understood the market well, but had relevant experience

operating in the sector.

▪ Marlin crafted customized marketing materials, identified

aa targeted list of highly qualified potential partners, and

managed the extremely competitive process

28

Leading Buyside Advisor to Both Strategic And Financial Investors

Commentary

Fin

an

cia

l S

po

nso

rs

▪ Marlin completed a broad sector-wide review and analysis of potential acquisition targets for

RevSpring and identified Talksoft

▪ Marlin managed the process from preliminary discussions to transaction close

▪ Marlin completed an in-depth review of multiple technology verticals relevant to NYSE and provided

guidance with regard to potential synergies and fit with NYSE's existing businesses

▪ Marlin identified both acquisition targets and lead the negotiation and structuring of the transaction

▪ Marlin advised Aquiline on their investment in Fenergo

▪ Marlin provided market and process intelligence, Fenergo financial review and aided with due

diligence, investment committee materials and exit opportunity analysis

▪ Marlin advised Francisco Partners on its investment in Betterment

▪ Marlin provided detailed insight into the space, competitors and potential follow-on acquisition

opportunities

▪ ABRY leveraged Marlin's proprietary knowledge of the target and industry in its analysis of the

investment opportunity

▪ Marlin provided ABRY with aid in due diligence and valuation in the evaluation of SoftBrands

▪ Marlin provided a thorough understanding of the marketplace, competitors and potential follow-on

acquisition opportunities

▪ Marlin conducted financial analysis, reviewed Ipreo management’s business plan and financial

forecasts, and completed competitive benchmarking and market share analyses

▪ Marlin undertook a comprehensive search for identifying suitable buyers for IVANS and positioned

ABILITY + Applied Systems as the most logical buyers for IVANS

▪ Marlin worked diligently to craft materials, initiate conversations and negotiate the terms

▪ Marlin aided in due diligence, negotiation, and structuring the transaction

▪ Marlin is currently serving as exclusive financial and strategic advisor to the Company

Target

Str

ate

gic

s

Client

▪ Marlin provided Vista and Ventyx with aid in due diligence, structuring and valuation of the business

▪ Global Energy Decisions was an important add-on to Ventyx, which was a serial acquirer under

Vista's ownership prior to the sale of the Company to ABB for more than $1bn

▪ Marlin aided JMI and Welsh Carson in a detailed review of Triple Point from a financial and strategic

perspective as well as provided valuation and industry-related guidance during due diligence

29

Marlin & Associates

For more than 18 years, Marlin & Associates has been the domain expert - providing

independent and unbiased professional investment banking and strategic counsel to

worldwide buyers and sellers of middle-market FinTech, data and analytics technology

firms.

Headquartered in New York City, with offices in Chicago, Washington, D.C., and Toronto,

the Marlin & Associates team of professionals has advised on more than 200 information-

technology transactions in 27 countries. More than 20 transactions on which Marlin &

Associates has advised have been recognized as “Deal-of-the-Year”. The firm has won

numerous awards including the “Middle-Market Investment Bank of the Year,” “Middle-

Market Financing Agent of the Year – Equity,” and “TMT Advisory Bank of the Year.”

Marlin & Associates Securities LLC, a wholly-owned subsidiary of Marlin & Associates

Holding LLC, is a broker-dealer registered with the Securities and Exchange Commission

and is a FINRA/SIPC member firm (www.finra.org). Investment banking and/or securities

are offered through Marlin & Associates Securities LLC.

New York City | Chicago | Washington, DC | Toronto, Canada

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