A comprehensive, data-driven look at global financial services corporate venture capital activity

The Global Financial Services CVC Report

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T R U S T E D B Y T H E W O R L D ’ S L E A D I N G C O M P A N I E S

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Contents

7 Global Financial Services CVC Investment Trends

Annual and Quarterly Activity

Deal Share by Stage

Financial Services CVC Deal Histogram

1 3 Sector Activity ComparisonMost Active Financial Services CVCs

Sector Deal Share Activity

1 6 Financial Services Activity by GeographyContinental Trends

Countries with Most Activity

US Market Investments

2 2 Sector Investment Activity and TrendsBank CVC Trends

Insurance CVC Trends

Capital Markets CVC Trends

Payments CVC Trends

1 9 Unicorn InvestmentsFinancial Services CVCs Investments to Unicorns

Unicorn Co-Investment

Most Active Financial Service CVCs

4

Most fin services CVCs have backed ≤ 10 deals since 2014: 64% of fin services CVCs analyzed have completed 10 or fewer deals since 2014. Just 6 fin services CVC groups have completed >50 deals over the same period.

25 CVCs have funded 1 or more unicorns since 2014: Goldman Sachs Principal Strategic Investments has backed 5 unicorns, while 6 other financial services CVC groups have invested in 3 or more unicorns.

Fin services CVC deals to companies outside North America accelerate: North American share of financial services CVC deals fell from 57% in 2014 to 40% in 2019 YTD. Meanwhile, fin services CVCs are increasingly active in Europe, where deal share has grown from 7% to 25% over the same period.

Note: This report includes equity deals made by financial service CVCs to companies across sectors, not restricted to fintech. We exclude non-equity deals. This report does not include companies funded solely by angels or private equity firms. All data is sourced from CB Insights.

Summary of findingsFinancial services CVC hits new highs: Financial services CVC groups have invested in a record 329 deals worth $8B in 2019 YTD. Q3’19 saw the highest amount of deal activity by financial services CVC groups on record.

Banks are becoming more active investors: Banks are rapidly accelerating their CVC activity, with annual deal activity up over 8x between 2014 and 2018. 42% of fin services CVC deals in 2019 YTD have come from banks.

Insurance CVCs slow down in 2019 after rapid investment growth: Between 2014 and 2018, investments by insurance CVC groups grew by nearly 6x, though pace of deal activity slowed to 4% in 2019 YTD (11/26/19) compared to 32% in 2018.

Ping An leads as most active fin services CVC: Ping An Ventures leads CVC activity among financial services firms, followed by Citi Ventures and Mitsui Sumitomo Insurance Venture Capital. 5 of the top 10 most active CVCs were insurance organizations, and 3 were banks’ strategic arms.

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Global Financial Services CVC Investment Trends

88

$7BO F F U N D I N G A C R O S S

303 dealsI N 2 0 1 8

G L O B A L L Y , F I N A N C I A L S E R V I C E S C O R P O R A T E V E N T U R E C A P I T A L G R O U P S P A R T I C I P A T E D I N

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Financial services CVCs reach record deal activityAnnual deals and financing by financial services CVCs, Q1’14– 2019 YTD (11/26/19)

A N N U A L F I N S E R V I C E S C V C D E A L S R I S E 5 X + S I N C E 2 0 1 4

Deal activity in 2019 looks slow in comparison to the previous year as 2018 was bolstered by record activity from individual investors like Goldman Sachs Principal Strategic Investments, Portag3 Ventures, Monex Ventures, and Ping An Ventures.

4,545

$50,213

$0.7 $4.6 $5 $2.7 $7 $8

58

109

172191

303329

0

50

100

150

200

250

300

350

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Fund

ing

($B)

8

Fin services CVC deals up over 500% in Q3’19 vs. Q3’14Quarterly financial services CVC-backed deals and financing, Q1’14– 2019 YTD (11/26/19)

Q U A R T E R L Y F I N S E R V I C E S C V C D E A L A C T I V I T Y H I T S R E C O R D H I G H I N Q 3 ’ 1 9

$0.1$0.2 $0.1 $0.3

$0.2$0.3 $3.6 $0.4 $2.4 $1.5 $0.4 $0.7 $0.4 $0.8 $0.9 $0.7 $1.6 $1.5 $1.6 $2.3 $1.2 $2.6 $3.2

9 1117

2117 19

38 3541

53

28

5043

5649

43

74 7381

75 76

95

105

0

20

40

60

80

100

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0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0Q1

'14

Q2'1

4

Q3'1

4

Q4'1

4

Q1'1

5

Q2'1

5

Q3'1

5

Q4'1

5

Q1'1

6

Q2'1

6

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Q4'1

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Q2'1

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Q3'1

7

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8

Q2'1

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8

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Q1'1

9

Q2'1

9

Q3'1

9

2014 2015 2016 2017 2018 2019

Deal

s

Fund

ing

($B)

In Q3’15 DiDi Chuxing raised a $3B Series F; in Q1’16 Lu.com raised a $1.2B Series B; Q3’19 saw two $500M+ mega-rounds

9

Deal share by stage between Q1’14– 2019 YTD (11/26/19)

Late-stage deal share grows 8% up from 18% in 2018C V C A C T I V I T Y H I S T O R I C A L L Y C O N C E N T R A T E S T O S E R I E S B R O U N D S A N D E A R L I E R

19% 22% 22% 22% 19% 17%

33% 25% 28% 32%28% 31%

17% 28% 24%21%

25% 23%

16%10% 10%

15%10% 14%

12%

1%5%

4%

5%7%8% 4%

3%

3%5%

3% 6% 6% 3%9%

4%

0%

25%

50%

75%

100%

2014 2015 2016 2017 2018 2019 YTD

Seed/Angel Series A Series B Series C Series D Series E+ Other

Late-Stage

10

64% of fin services CVCs invested in 10 or fewer deals Financial services CVC-backed deals, Q1’14– 2019 YTD (11/26/19)

M O S T F I N S E R V I C E S C V C S A R E N O T I N V E S T I N G H E A V I L Y

16

9 9

1 2

15

13 12

33

3

31

1

1

1

2

1

0

5

10

15

20

25

30

35

40

0-5 6-10 11-30 31-50 >50

Bank Insurance Payments Capital Markets

11

Ping An is the most active among fin services CVCsI N S U R E R S L E A D A S M O S T A C T I V E F I N S E R V I C E S C V C S

Financial services CVC-backed deals Q1’14– 2019 YTD (11/26/19)

BankInsurance Payments Capital Markets33

35

35

36

55

56

64

66

66

68

0 10 20 30 40 50 60 70 80

American Family Ventures

Reinventure

Monex Ventures

Portag3 Ventures

American Express Ventures

AXA Venture Partners

Goldman Sachs Principal Strategic Investments

Mitsui Sumitomo Insurance Venture Capital

Citi Ventures

Ping An Ventures

12

Insurance CVC activity slows as deals by banks jumpFinancial services CVC-backed deals Q1’14– 2019 YTD (11/26/19)

F I N S E R V I C E S C V C I N V E S T M E N T A C T I V I T Y O V E R T I M E

146152

111

146

0

20

40

60

80

100

120

140

160

2014 2015 2016 2017 2018 2019 YTD

Deal

s

BankInsurance Payments Capital Markets

13

Bank deal share increases to 42% in 2019 YTDFinancial services CVC-backed deal share, Q1’14 – 2019 YTD (11/26/19)

B A N K C V C A C T I V I T Y A C C E L E R A T E S I N 2 0 1 9

29% 28% 29% 29%36%

42%

43% 48%

55% 57% 47%44%

16%16%

10% 6% 8%8%

12% 8%6% 8% 9% 6%

0%

25%

50%

75%

100%

2014 2015 2016 2017 2018 2019

Bank Insurance Payments Capital Markets

14

Over 50% of fin services CVC deals are now in Asia & Europe

“Other” includes Australia, Brazil, Israel, Kenya, Mexico, New Zealand, South Africa, and Uganda.

N O R T H A M E R I C A F I N S E R V I C E S C V C D E A L S H A R E D R O P S

Deal share by continent between Q1’14 – 2019 YTD (11/26/19)

57%52% 56%

52%46%

40%

7% 17%

20% 27%

25%

25%

29%24%

15% 14%22%

29%

7% 7% 8% 7% 6% 7%

0%

25%

50%

75%

100%

2014 2015 2016 2017 2018 2019 YTD

Other

Asia

Europe

North America

15

US companies dominate investment activity, but Japan is on the rise

Countries represent a company’s place of domicile.

T O P 5 C O U N T R I E S F O R F I N S E R V I C E S C V C I N V E S T M E N T

China

United States

Germany

United KingdomJapan

130122

43

66

0

20

40

60

80

100

120

140

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Financial services CVC-backed deal activity, Q1’14 – 2019 YTD (11/26/19)

16

Nearly half of US fin services CVC deals are in CaliforniaF I N S E R V I C E S C V C A C T I V I T Y I N T H E U S

Map depicts companies that have raised fin services CVC equity funding since Q1’14 through 2019 YTD (11/26/19).

78%82% 82%

87%

78%83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014 2015 2016 2017 2018 2019 YTD

Deal

sha

re

CVC deal activity concentrates to companies in 5 states Q1’14 – 2019 YTD (11/26/19)

MassachusettsCalifornia IllinoisTexasNew York

Top 5 States Running Total

17

9% of financial services CVCs have backed more than 1 unicornFin services CVCs backing unicorns, Q1’14–2019 YTD (11/26/19)

26% of investors back 1 or more unicorns. Investors backing 1 unicorn are not shown above.

C V C I N V E S T M E N T S I N U N I C O R N S

Visa Ventures

XL Innovate

Munich Re Ventures

Allianz X

Ping An Ventures

Citi Ventures

Capital One Growth Ventures

American Express Ventures

Goldman Sachs Principal Strategic Investments

0 1 2 3 4 5 6

Number of Unicorns

18

8 unicorns are backed by 2+ fin services CVC groupsU N I C O R N S W I T H M U L T I P L E F I N S E R V I C E S C V C B A C K E R S

Company Description Location Sector Fin Services CVC Investors

Tradeshift is a supply chain payments enabler and marketplace. San Francisco, CA Fintech

American Express Ventures, Goldman Sachs Principal Strategic Investments, HSBC Venture Capital

Symphony is a collaboration and productivity tool for financial institutions. Palo Alto, CA Fintech Goldman Sachs Principal Strategic Investments,

Barclays Ventures, MUFG Innovation Partners

Plaid offers APIs that enable applications to connect to consumer bank accounts. San Francisco, CA Fintech American Express Ventures, Citi Ventures, Visa

Ventures

Next Insurance offers coverage targeting small businesses. Palo Alto, CA Insurtech American Express Ventures, Munich Re Ventures, Nationwide Ventures

C2FO is a working capital marketplace. Leawood, KS Fintech Intact Ventures, Liberty Mutual Strategic Ventures

Turo is a car sharing marketplace. San Francisco, CA E-commerce & direct-to-consumer Allianz X, Citi Ventures

Fair offers short-term car leases. Santa Monica, CA Auto & transportation Exponential Ventures, Munich Re Ventures

Lemonade is a home and renters insurance startup. New York, NY Insurtech Allianz X, XL Innovate

19

Rank CVC Investor Unicorn Investments

1 Carta, Circle, GitLab, Symphony, Tradeshift

2 Next Insurance, Plaid, Stripe, Tradeshift

3 Riskified, Snowflake Computing, ThoughtSpot

3 C2FO, Plaid, Udaan

3 Didi Chuxing, JOLLY, Oscar Health

3 C2FO, Lemonade, N26

3 Babylon Health, Fair, Next Insurance

Goldman Sachs has invested in 5 unicorns since 2014

Goldman Sachs refers to Goldman Sachs Principal Strategic Investments.

F I N S E R V I C E S C V C I N V E S T O R S B A C K I N G T H E M O S T U N I C O R N S

Goldman Sachs takes the top spot with investments in 5 unicorns including: 1. Carta, an equity management

solution 2. Circle, a P2P blockchain

payments network3. GitLab, a DevOps application4. Symphony, a communication

and content sharing platform5. Tradeshift, a B2B supply

chain purchasing platform.

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Sector Activity and Trends

21

Bank CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R

22

Annual bank CVC deal activity hits new highs in 2019Bank CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)

B A N K C V C T R E N D S

$0.3 $0.6 $1.2 $0.8 $2.9 $3.5

17

31

52 57

111

146

0

20

40

60

80

100

120

140

160

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Fund

ing

($B)

23

Citi and Goldman are the most active bank CVCsBank CVC-backed deals Q1’14– 2019 YTD (11/26/19)

B A N K C V C T R E N D S

66 64 35 25 20 18 17 15 13 130

10

20

30

40

50

60

70

Citi Ventures Goldman SachsPrincipalStrategic

Investments

Reinventure Capital OneGrowth

Ventures

BarclaysVentures

CollectorVentures

Wells FargoStrategicCapital

NAB Ventures BerlinerVolksbankVentures

Nanto CVCFund

24

Insurance CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R

25

Annual insurance CVC deal growth slows down in 2019Insurance CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)

I N S U R A N C E C V C T R E N D S

$0.2 $3.5 $3.5 $1.6 $3.3 $4.3

25

54

98

111

146152

0

20

40

60

80

100

120

140

160

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Fund

ing

($B)

4%

32%

26

Ping An Ventures and Mitsui Sumitomo lead investment activityInsurance CVC-backed deals Q1’14– 2019 YTD (11/26/19)

I N S U R A N C E C V C T R E N D S

68 66 56 33 31 27 22 18 18 15 150

10

20

30

40

50

60

70

Ping AnVentures

MitsuiSumitomoInsuranceVentureCapital

AXA VenturePartners

AmericanFamily

Ventures

Allianz X Munich ReVentures

TransamericaVentures

XL Innovate AvivaVentures

AssurantGrowth

Investing

NationwideVentures

27

Capital Markets CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R

28

Capital markets CVC activity dips in 2019Global capital markets CVC-backed deals & funding Q1’14 – 2019 YTD (11/26/19)

C A P I T A L M A R K E T S C V C T R E N D S

$51.6 $87.5 $204.5 $229 $260.4 $98.9

79

10

16

28

20

0

5

10

15

20

25

30

0

50

100

150

200

250

300

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Fund

ing

($M

)

29

Monex Ventures and CME Ventures lead capital markets CVCsCapital markets CVC-backed deals Q1’14 – 2019 YTD (11/26/19)

In March 2018, CME Group absorbed Euclid Opportunities in an acquisition of parent company NEX Group.

C A P I T A L M A R K E T S C V C T R E N D S

35 21 10 7 7 4 4 30

5

10

15

20

25

30

35

40

Monex Ventures CME Ventures EuclidOpportunities

DB1 Ventures Nasdaq Ventures SIX FinTechVentures

Fitch Ventures XTX Ventures

30

Payments CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R

31

Payments CVC activity reaches peak levelsPayments CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)

P A Y M E N T S C V C T R E N D S

$121.9 $383.9 $202.4 $167.3 $773.5 $875.4

9

1817

11

24

28

0

5

10

15

20

25

30

0

200

400

600

800

1,000

2014 2015 2016 2017 2018 2019 YTD

Deal

s

Fund

ing

($M

)

32

American Express Ventures leads payments CVC groupsPayments CVC-backed deals Q1’14 – 2019 YTD (11/26/19)

Data only includes investment by delineated CVC groups

P A Y M E N T S C V C T R E N D S

55 23 18 6 50

10

20

30

40

50

60

American Express Ventures Saison Ventures Edenred Capital Partners Visa Ventures First Data Ventures

33

This report only includes investments by financial services CVC funds, which are defined as separately demarcated corporate investment vehicles that fall into the following 4 categories of corporates: banking, insurance, payments, and capital markets. This report analyzes equity activity by 96 CVCs since 2014.

For questions regarding methodology, please reach out to info@cbinsights.com.

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