MDEC Fintech Conference - Keynote: Overview of Fintech in 2016
-
Upload
itrain -
Category
Small Business & Entrepreneurship
-
view
775 -
download
1
Transcript of MDEC Fintech Conference - Keynote: Overview of Fintech in 2016
OVERVIEW OF FINTECH IN 1H’2016:
key numbers and main trends
Vladislav SolodkiyLife.SREDA, Managing Partner
most influentialfintech personsin the world @SlavaSolodkiy
/VladislavSolodkiy35
Life.SREDA I Life.SREDA II AsiaBanking on Blockchain Fund
Moscow Singapore London
2012 2015 20162014
13A new venture fund dedicated to
investing in the blockchain ecosystem
6 6 investments(South East Asia)
Research & Vision
www.
.com
investments successfulexits
Accelerator in Singapore Strategy
Indonesia
Taiwan
SME-lending
& FactoringPOS-managment
system &
tablet based
cash-registers
Online-
acquiring
Online-tra
ding
Online-
lending
P2B-lending
Crowndfunding
& Crowndinvesting
Online-
remittances
PFM&PFP
Insurtech
Middleware
mPOS-acquiring
Online-lending
for students
First BaaS-platform for Asiais very necessary for the future
fintech development
Life.SREDA VC Executive Summary
FundingTotal fintech funding includ-ing activity by angels, corpo-rates, PE firms, mutual funds
and hedge funds hit 1288 with 41% raised by e-com-
merce startups deals vs 1053 with 48% raised in e-com-
merce during the same period last year.
Corporates get more active in local fintech deals.
Corporate participation in European fintech deals rose to almost a quarter in H1’16
from just 8% in Q4’15.
Corporates pursue fewer deals in Asian fintech in
Q1’16. Corporate participa-tion in Asian VC-backed
fintech deals fell to 31% in Q1’16, a 5-quarter low.
Asian share of companies in top financing is growing
steadily
April had the record single funding of $4.5B (Ant Finan-
cial) - $125M was debt
Insurance Tech takes 3 of 10 largest US fintech financings
in the H1’2016.Lending takes 5 of 7 largest
Asian fintech financings in the H1’2016
The global investment in blockchain has exceeded
USD 1 billion in over a thou-sand startups and is expected to increase four-fold by 2019, growing at a CAGR of 250 per
cent
Financial technology market analysis, H1 2016
Investment in Financial technologies,Quarterly ($B)
2.6 2.95 2.74.05 4.1
6.17
3.1
6.78.3
2014 2015 2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Investments in fintechAnnually ($B)
Amount of financing deals& M&A deals (#)
Note/source: Source: Capital IQ, FT Partners, Pitchbook, The Pulse of Fintech, Q1 2016, Global Analysisof Fintech Venture Funding, KPMG InternaIonal and CB Insights (data provided by CB Insights) May 25th, 2016.
Other fintechinvestment ($B)
VC Backed fintechinvestments ($B)
2.2 2.5 2.9
0.3
2011 2012 2013 2014 2015 2016 1H
0.4 1.1
5.5
2.6
5.8
6.8 14.5 12.4
100 99
7182
117
76
121
74
128
93
139
95
109
83
162
111
150
80
114
69
108
59
151
106
128
89
122
82
114
69
103
55
134
93
109
102
Investment tractionin Financial technologies,
Quarterly ($B)
Major banks investmentsGoldman Sachs, CITI, Barclayslead pack of banks in fintech investingin H1 2016
Number of investments to VC-backed Fintech Companies
– in H1 2016
– in H1 2015
Goldman Sachs
Citi groupBarclays
Morgan Stanley
Banco Santander
HSBCCredit Suisse
Mitsubishi UFJ
JP MorganCapital One
BBVAChina Development Bank
Wells FargoSumitomo
PNCBNP Paribas
UBSSberbankDBS Bank
Credit Agricole
StandardChartered
Insurtech takes 3 of 10 largest US fintech financings
Lending takes 4 of 5 largest Asian fintech financings
Blockchain & bitcoinfor the first time presents2 companies in top financing
Asian share of companiesin top financing is growing steadily
Key observationsH1 2016
North America
$1.91Bcompanies
17
$718M
companies
4
Europe
$182M
companies
2
South America
Note/source: Source: Capital IQ, FT Partners, Pitchbook, The Pulse of Fintech, Q1 2016, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) May 25th, 2016.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Ant Financial
Lu.com
JD Finance
Oscar Health Insurance
Ion Investment
CommonBond
Fenqile
Clover Health
Weidai
Lendup
EDM _Group
XP Inves
Kreditech
Belerment
Fractal Analytics
$4.500M
$1.216M
$1.010M
$400M
$400M
$275M
$235M
$160M
$153M
$150M
$145.1M
$130M
$103M
$100M
$100M
Series B
Series B
n/a
Series C
PE
Late
Series D
Series C
Series C
Series B
n/a
PE
C
Series E
n/a
Payments [4]
Lending [8]
Insurance [3]
Financial BPO[1]
Wealth management/ Capital Markets
[4]
Banking[3]
Big Data[1]
Financialmanagement
[2]
Real Estate[1]
Blockchain[3]
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Affirm
Anaplan
Opendoor
Bright Health
Tradeshift
Personal Capital
Starling
Digital Asset Holding
Circle
Duanrong
Blockstream
Nubank
Licaifan
Mobikwik
Lendup
$100M
$90M
$80M
$80M
$75M
$75M
$70M
$60M
$60M
$59M
$55M
$52M
$51M
$50M
$50M
Series D
Series E
Series C
Series A
Series D
Series D
Venture
Series A
Series D
Series B
Series A
Series C
Series C
Series C
Series B
30 largest fintech deals of H1 2016 received a financing of $13.31B
$7.22B
companies
7
Asia
The market doubles every year. It is neither good or bad - it is normal
At the moment, I would single out three much more important fintech issues, rather than record volume of deals:
Scalingas little as 30 companies worldwide show that they are able to quickly export their products and services to other countries
medium-sized companies facethe future funding problem.Such companies are already successful in one market and “burn” a lot of money, but in most cases, they are still loss making, and further need either geographical expansion or extension of their product range.
At this stage, neither “cash exit” for founders of acquired services nor acquisition of a readymade business is applicable
Round B problem The growth through M&A
This and the next year the major focus will be on mergers of fintech startups:
They started integrating by themselves on the partnership terms;
So far we have seen quite a few M&A deals but I have no doubt that soon there will be more and more of them;
Cheap&fast customeracquisition,but low margin
High margin, but expensive CP
Cheap&fast customeracquisition
High margin
Better tailoring customer to
More data = low credit risks
Online-trading Online-remittances
Online-bank mPOS
mPOS e-wallets
Online-lending Online bank
Online-lendingOnline bank
Mobile bank Online-remittances
BanksLicensed and regulatedbanking back-ends (belongs to banks in each country in Asia-Pacific region)
based on 40+ universal APIs
100+ fintech-startups
Middlewareprovide for them universal APIs
Fintech-startups do notneed to spend time,money and humanresources to be integratedin each Asian country
Banks do not need tospend their time andmoney to create newAPIs and to communicatewith all startups all over the world
Bank-as-a-service
Ecosystem
Now we see a heavily growing demand from fintech startups for advanced
banking infrastructure to launch and scale faster and more effectively
(Bank-as-a-service)
There are a few BaaS-platforms
(in most countries of the world
none at all), and only a small
number of companies in the
market have open APIs - but it
is already clear that the market
has matured, that without solving
these infrastructure problems
further fintech growth
will be very limited
India
Sri Lanka
Bangladesh
Myanmar
Malaysia
Philippines
Indonesia
Australia
New Zealand
South
Korea
North
Korea
Thailand
Hong Kong
Laos
Cambodia
Singapore
Taiwan
Japan
Bhutan
SME-lending
& FactoringPOS-management
systems &
tablet based
cash-registers
Online-
acquiring
Online-tra
ding
Online-
lending
P2B-lending
Crowdlending&
Crowdinvesting
Online-
remittances
PFM&PFP
Insurtech
Middleware
mPOS-acquiring
Online-lending
for students
First BaaS-platformis very necessary for the
future fintech development
Most importantly, the market starts talking about fintech-bank –
a company, providing not one but dozens
of fitnech product and services
Based on BaaS-platformit would be possible
to create a Fintech-bankwitn Tesla like-UX
Tesla - is not about electric car.It’s about ecosystem ofservices which createsnew user experince.
No dealers(and middle-men),only own showrooms
Worldwide network of chargers
Battery and engine manufacture
Centralised contact-center and technicalsupport
Software&interface manage
your car through tablet
New car insurance forelectric cars based
on big data
Booming fintech trends:
Online-remittancesAlmost all major players successfully raised new funding rounds in the past six months
keep growing at a faster rate
As for social-based remittances, none of the messengers (except WeChat) shows any outstanding performance in terms of turnover and number of clients.
have got second wind and a new growth phase with the support of the British regulator.
e-Wallets Neo- and challenger banks
Booming fintech trends:Explosive growth of
Online- and P2P-loansStudent loans are still popular only in the USA – no other countries have attained such scope and growth rates.
The borderlines between P2B, SME loans and crowdinvesting become gradually erased
and provide a huge and fast-growing field
of alternative SME financing.
Big data and online scoring are growing
fastest in the unbanked markets
The maximum number of new players are thinking in terms of small and medium business loans
Booming fintech trends:
mPOS-acquiring shows that while this business is mostly lossmaking (being low-margin), but it successfully (and at low cost) wins SME customers and generates extensive data on them
Online acquiring is the same low-margin sphere as mPOS, although with a higher profit form lower investments
Online-trading and wealth-managementare often brought down to robo-advisory services, although this is not the case as the industry is much more versatile and interesting
New prospective spheres:
«Fintech for unbanked» solutions
IoT, O2O, big data, chat-bots
Availability of Open APIs to banks and BaaS-platforms is critical for fintech startups, both for the start and further international expansion.
Implementation of the Blockchain technology as real business is curbed by the very blockchain benefit: the technology is developed for mass use and has no use without it.
Insurtech is a relatively new development, it has brought together more than 150 startups
Niche developments:
It is still unclear why mPOS companies fail to develop successful solutions in POS management systems and tablet-based cash-registers, these sectors are so close that they are bound to merge eventually
Crowdfunding will grow into a huge industry, unless it stays only a new version of charity
Personal Financial Management (PFM) has developed as an independent sector only by a small number of companies
Price-comparison and broker-model sites is a gradually dying-out model, despite that some companies keep successfully developing and attracting new rounds
Fintech for SMEs is quite an undervalued sector
All you need to know about Fintechyou can find in a new Life.SREDA’sfintech research “Money of the Future 1H 2016”
www.fintech-research.com