1

WHO WE ARE

The technology market

intelligence platform.
CB Insights software lets you predict, discuss,
and communicate emerging technology trends
using data in ways that are beyond human
cognition. We are a leader in the Expert Automation
& Augmentation Software (EAAS) space.

2
 TRUSTED BY THE WORLD’S LEADING COMPANIES

“We use CB Insights to find emerging trends

and interesting companies that might signal a shift in
technology or require us to reallocate resources.”
Beti Cung, Corporate Strategy, Microsoft

3
 June 12 - 13, 2019
New York, NY

events.cbinsights.com/future-of-fintech

@cbinsight @cbinsight
Save with early bird pricing until Dec 31, 2018 #FutureFintech
4
s s
5
WHAT THIS REPORT COVERS

Payments processing, card developers, Companies selling insurance digitally or providing

& subscription billing software tools data analytics and software for (re)insurers

Tools to manage bills and track Sales & trading, analysis, and infrastructure
personal and/or credit accounts tools for financial institutions
PAYMENTS/ INSURANCE
BILLING
PERSONAL CAPITAL
FINANCE MARKETS
Audit, risk, and regulatory Investment and wealth management
compliance software platforms and analytics tools
WEALTH
REGTECH MANAGEMENT

Companies leveraging blockchain MONEY International money transfer

technologies for financial services BLOCKCHAIN/ TRANSFER/ and tracking software
CRYPTO REMITTANCES

MORTGAGE/
LENDING REAL ESTATE
Marketplace lending & alternative Mortgage lending, digitization,
underwriting platforms and financing platforms
GLOBAL FINTECH
REPORT Q3 2018

5
 Summary of findings
VC-backed fintech deals saw a global pullback in Q3’18, but still on Asia surpasses the US in early-stage fintech deals: Asia saw 64 early-
track for annual deal record: In Q3’18, VC-backed fintech companies raised stage deals worth $270M in Q3’18, 5 more than the US. In the US, early-
$5.64B across 375 deals globally — a drop in both funding and deals from stage deals fell to a five-quarter low of 59 deals worth $434M.
Q2’18 record highs. Despite the dip, fintech funding has already surpassed
2017’s annual record and fintech deals are still on track to set an annual US sees biggest dip in fintech deals in five quarters: Q3’18 saw a second
high in 2018. consecutive dip in VC-backed US fintech deals to 130, down 17% from
Q2’18. Funding to US VC-backed fintech companies dipped slightly to
Early-stage fintech deals fell off in Q3’18: Global seed and Series A $2.8B led by seven mega-round investments, which minted two unicorns
fintech deals fell 16% on a quarterly basis in Q3’18. North America saw a (Toast and Root).
26% quarterly pullback in early-stage fintech deals, while early-stage
fintech deals in Asia fell 22%. The US reclaims the lead on Asia for fintech mega-rounds: The US
reclaimed the top spot with seven fintech mega-rounds, while Asia saw
Fintech mega-rounds continue in Q3’18, while IPO activity remains four. Through Q3’18, there have been 17 $100M+ fintech financings in the
lackluster: The first three quarters of 2018 have seen a whopping 39 US vs. 15 in Asia.
$100M financing deals to VC-backed fintech companies – including 12 in
Q3’18 from well-funded unicorns like Stripe, Oscar, Gusto, and UiPath. Early signs of fintech investment continue to spread to frontier markets:
Africa saw 9 VC-backed deals, a five-quarter high. To date Africa has
Aggregate fintech unicorn valuation tops $115.49B: Q3'18 saw two new seen 16 deals, surpassing 2017’s annual record of 14 deals.
unicorns births (Toast and Root) and one in the first month of Q4’18(Brex),
bringing the total VC-backed unicorn count to 33. The cohort’s total
Note: Report focuses on all equity rounds to VC-backed fintech companies. This report does not cover
valuation was boosted to $115.49B on the back of four mega-rounds to companies funded solely by angels, private equity firms, or any debt, secondary, or line of credit
existing unicorns in Q3’18 and three in Q4’18 (Brex, Nubank, and Coinbase). transactions. All data is sourced from CB Insights.

6
Contents
8 Q3’18 Financing Trends 67 Appendix:
Annual Deals & Dollars Major markets financing trends
Regional Trends
Fintech Unicorns

23 Top Deals and Top Investors

Q3’ 2018 Top VC-Backed Fintech Deals
Most Active Fintech Investors Q3’17-Q3’18

32 Q3'18 Sector Trends

7
GLOBAL FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:

$5.64 BILLION
ACROSS

375 DEALS

8
Global fintech deals are on pace for a record year
Annual VC-backed global fintech deals and financing, 2013 – 2018 YTD (Q3’18), ($B)
1,460

1,350

1,159 1,164
1,071

838

608

$3.9 $8.2 $16 $19 $17.9 $32.6

2013 2014 2015 2016 2017 2018

Amount ($B) Deals

9
Q3’18 sees a pullback after Q2 but deals are still on
track to set record
402
387
352 375
333
317 336 329
310
291
277 279 272
245
234 239
224
198
182
167 171

$5,642
$3,338

$3,112
$2,877
$2,633

$2,434
$2,195
$1,826
$1,702

$1,296
$1,118

$20,596
$935

$8,364

$5,841
$4,895

$6,307

$5,336

$4,565

$4,405

$6,379
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

Amount ($M) Deals

10
 The pullback in deals was driven by the biggest
decrease in early-stage in 2 years -16%
-18%
224
211 216
207 212
199 199 200
186 188
172 174
165 162
156
148 149
131
116 119
109

Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

11
US maintains a narrow single digit deal lead on
Asia, despite biggest dip in 5-quarters
175

157 United States

-17% QOQ
132 136
129 130
Asia
105 123
-9.6% QOQ
94
87 85
77 72 75 Europe
85
+13% QOQ

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

12
Africa sees deals top a new quarterly high while
conflict in South America constrains deals
Global VC-backed fintech deals by continent, Q3’17 – Q3’18
15
14
South America
12 +33% QOQ

9 9 Africa
8 +50% QOQ
6
5 5
4 4 Australia
3 +25% QOQ
2
1

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

13
Funding dipped in nearly every region in Q3’18
Global VC-backed fintech funding by continent, Q3’17 – Q3’18, ($M) (*Ant Financial excluded)

$30 South America

$25 -49% QOQ
$60 $16 Australia
$853 $85
+236% QOQ
$30
$1,084 Africa
$764 -45% QOQ

$782 Europe
* $2,132
$989 -10% QOQ
$2,122 $1,807
$709 Asia
$1,661 -89%* QOQ

North America
$2,089 $2,593 $2,850 $3,496 $2,938 -16% QOQ
Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
*Ant Financials' $14B round in Q2’18 was excluded from the chart represented on this slide for illustrative purposes 14
Early-stage deals dropped to 5-quarter low
Quarterly deal share by stage to global VC-backed fintech companies, Q3’17 – Q3’18

12% 11%
16% 17% Other
8% 17%
8%
8% 7% 7%
Late-Stage

19% 21%
20% 20% Mid-Stage
27%
Early-Stage

60% 60% 56% 56% 50%

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

15
Early-stage deals dropped in every major region
Quarterly Seed and Series A deals to VC-backed fintech startups, Q3’17 – Q3’18

106

86
80
76
82 North America
64 -25.6% QOQ
61 59
57 64
50 Asia
45 43
48 39 -21.9% QOQ

Europe
-4.4% QOQ

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

16
Despite the dip in deals, Asia maintains the lead
on US in early-stage investments
96

82
73
70
77 64 United States
61 59
57 -23.4% QOQ
50 59
48
45 Asia
39 43
-21.9% QOQ

Europe
-4.4% QOQ

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

17
The US reclaims mega-round lead over Asia
Q3’18: 12 mega-rounds ($100M+), worth a total $2.08B

7 7 7*

6 6 6

4 4 4 4

1 1 1 1 1

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

North America Asia Europe South America

*Q3’18 North America mega-rounds were all to US-based companies 18

 GLOBALLY THERE ARE

33 FINTECH UNICORNS
VALUED, IN AGGREGATE, AT

$115.49 BILLION

19
 33 fintech unicorns valued at $115.49B
2018 fintech companies with a private market valuation of $1B+ (10/30/18)
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA

$20B Valuation $3B

$18.5B
$1.6B Valuation $1.7B $2.5B

$8B $5.3B $1.61B

$1.79B $4B
$1.43B

$3.2B $1.2B $1.06B

$1B $1.2-$1.6B

$1.46B
$2B $2B (as of Q2’15)

$1B
$3B $1.24B

$1B $4.5B
INDIA

$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B

20
$4B (Q4’18)
 US sees new breed of fintech unicorns
2018 fintech companies with a private market valuation of $1B+ (10/30/18)
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA

$20B Valuation $3B

$18.5B
$1.6B Valuation $1.7B $2.5B

$8B $5.3B $1.61B

$1.79B $4B
$1.43B

$3.2B $1.2B $1.06B

$1B $1.2-$1.6B

$1.46B
$2B $2B (as of Q2’15)

$1B
$3B $1.24B

$1B $4.5B
INDIA

$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B

21
$4B (Q4’18)
 And mega-rounds to established startups to stay private
NORTH AMERICA EUROPE ASIA
UNITED STATES UNITED KINGDOM SWEDEN
CHINA

$20B Valuation $3B

$18.5B
$1.6B Valuation $1.7B $2.5B

$8B $5.3B $1.61B

$1.79B $4B
$1.43B

$3.2B $1.2B $1.06B

$1B $1.2-$1.6B

$1.46B
$2B $2B (as of Q2’15)

$1B
$3B $1.24B

$1B $4.5B
INDIA

$1B $1.4B
$1B
$1B $1.1B (Q4’18)
SOUTH AMERICA
BRAZIL $10B
$1.9B

22
$4B (Q4’18)
Top Fintech
Investors & Deals

#AhaCBI
The most active fintech VCs from Q3’17 – Q3’18
By unique fintech company investments (new or follow-on)
Rank Investor Select Fintech Investments

24
The most active fintech VCs from Q3’17 – Q3’18
By unique fintech company investments (new or follow-on)
Rank Investor Select Fintech Investments

25
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description

Aug’18 // $375M $1.27B Alphabet Tech-enabled health insurance carrier

($3.2B Valuation)

Aug’18 // $300M $3.07B Berkshire Hathaway Mobile payments and commerce platform
($10B Valuation)

Sept’18 // $245M $1B Andreessen Horowitz, DST Global, Online payment infrastructure provider and global
($20.25B Valuation) General Catalyst, Khosla Ventures, Kleiner e-commerce enabler
Perkins Caufield & Byers, Sequoia Capital,
Tiger Global Management

Sept’18 // $225M $408M Accel, capitalG, Sequoia Capital Robotic process automation software
($3B Valuation)

Sept’18 // $146.11M $271M Boyu Capital and Sequoia Capital China China-based mobile and micropayment service
provider

26
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description

July’18 // $140M $368M Oriental Patron Financial Group, Qiming China-based fintech that provides users wealth
Venture Partners, and Warburg Pincus management and credit solutions

July’18 // $140M $316M 137 Ventures, capitalG, Dragoneer Online platform that centralizes payroll systems,
($2B Valuation) Investment Group, Emergence Capital benefits information, and core HR
Partners, General Catalyst, Kleiner
Perkins Caufield & Byers, MSD Capital, T.
Rowe Price, Y Combinator

July’18 // $115M $253M Bessemer Venture Partners, Generation Restaurant management system
($1.4B Valuation) Investment Management, Lead Edge
Capital, T. Rowe Price, Tiger Global
Management

Sept’18 // $102.25M $102M HRVC and Sinowisdom China-based e-commerce payments platform

27
Top 12 global fintech deals in Q3’18
The top 12 deals to VC-backed fintech companies were all mega-rounds ($100M+) and 7 were in the US
Deal Date // Total Disclosed
Company Amount Funding (M) Select Investors Description

July’18 // $100M $143M Bain Capital Ventures, F-Prime Capital, Global payments platform
Temasek Holdings, QED Investors, Accel

Aug’18 // $100M $143M e.ventures, Kinnevik, Vitruvian Partners Open banking platform
($500M Valuation)

July’18 // $100M $159M Redpoint Ventures, Ribbit Capital, Scale Personalized auto insurance
($1B Valuation) Venture Partners, Tiger Global
Management

28
Q3’18 Exits:
IPOs &
Acquisitions

#AhaCBI
Q3’18 top exits: IPO by valuation
There were 2 fintech IPOs in Q3’18, both listed on international exchanges

Total Disclosed Funding (M)

Company Exit Type Deal Date // Valuation Valuation Pre-Exit Select Investors

IPO Q3’18 // $1.96B $373M Accel, Index Ventures, Ribbit Capital, Union Square
(LSE: FCIF) ($2.05B Valuation) Ventures, BlackRock, CreditEase Fintech
Investment Fund, DST Global, Temasek Holdings

IPO Q3’18 // $1.3B $340M Susquehanna International Group, GGV Capital,

(HKG: 2051) ($1B Valuation) JD.com

30
Q3’18 top exits: acquisitions by valuation
Total Disclosed
Company Deal Date // Valuation Funding (M) Acquirer Description

Q3’18 // $390M $103M Online and mobile food-ordering company

Q3’18 // $332.31M $57M Digital marketplace with a focus on real estate and
automobiles

Q3’18 // $150M $36M Online and mobile food-ordering company

Q3’18 // $80M - Financial services provider in global growth markets

Q3’18 // $70M - Online accounting system designed for SMBs

31
 GLOBAL VC-BACKED
FINTECH Q3’2018

INSURTECH
REAL ESTATE DIGITAL
BANKING

CAPITAL
ALT LENDING MARKETS

PAYMENTS REGTECH

MACROS SECTOR
TRENDS

32
 GLOBAL VC-BACKED
FINTECH Q3’2018

PAYMENTS

MACROS SECTOR
TRENDS

33
Payments sees deals rebound after a slow H1’18
Global VC-backed payments fintech financing trends, Q3’17 – Q3’18, ($M)

66
62

55 55
52

$1,025 $1,315 $480 $1,596 $1,545

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

*Ant Financial removed for illustrative purposes 34

 DEMOCRATIZING GLOBAL PAYMENTS AND ENABLING THE DIGITAL ECONOMY

ENABLING DEVELOPERS
Last Funding Stripe’s integrated technology stack for global money movement
$245M Series E // Sep’18

Valuation $20.3B
Stripe, the global payments provider, has been
aggressively expanding their tech stack. The company
plans to use the latest funding to expand into Southeast
Asia and India.
According to Bloomberg, Stripe sales are roughly $1.5B
annually. Stripe supports businesses in 120 countries,
payments in 130 currencies, and provides services
ranging from fraud prevention to accounting. Stripe
reports that 65% of UK internet users and 80% of US
GLOBAL PAYMENTS &
users have bought something from a Stripe-powered TREASSURY NETWORK
business.
RECENT PARTNERSHIPS
LAUNCHED

35
 SQUARE 2.0

POS expands from hardware to all-in-one sales & CRM

Headquarters: US Headquarters: Africa Headquarters: Indonesia

Focus: Restaurants Focus: SMBs & Retail Focus: SMBs, coffee shops, barbers
Q3’18 Funding: $115M Series D Q3’18 Funding: $16M Series B Q3’18 Funding: $24M Series B
Valuation: $1.4B Select Investors: FMO, Orange Digital Select Investors: Convergence Ventures,
Ventures, Partech Ventures, Quona Capital, East Ventures, EDBI, Fenox Venture
Select Investors: T. Rowe Price, Bessemer
Velocity Capital Private Equity Capital, Mandiri Capital, Sequoia Capital
Venture Partners, Generation Investment
India, and SoftBank Ventures Korea
Management, Tiger Global Management

36
 N+1 OF PAYMENTS IN EARLY PHASES

While next gen payments want to “go” cashier-less

Tech: AI-powered computer vision software Tech: Hardware price tag & mobile Tech: Mobile scanner, non-RFID reader, and
powering autonomous checkout payments app payments app
Q3’18 Funding: $5.5M Seed-II Q3’18 Funding: $.04M Convertible Note Q3’18 Funding: Undisclosed
Total Funding: $10M Total Funding: $10M Total Funding: $2.2M
Select Investors: CRV, Y Combinator, Select Investors: 500 Startups, Dream Select Investors: Plug and Play Accelerator,
Initialized Capital Assembly Tech Nation Fintech

37
 GLOBAL VC-BACKED
FINTECH Q3’2018

ALT LENDING

MACROS SECTOR
TRENDS

38
Alternative lending sees boost from a fresh crop of
startups focused on POS and emerging markets
Global alternative lending VC-backed financing trends, Q3’17 – Q3’18, ($M)
55

49
45 41
45

$1,552 $1,079 $1,380 $880 $777

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
39
 Alternative lenders launch point-of-sale services to
attract millennials and boost merchant sales

Focus: Omni-channel software for retailers to offer POS Focus: Omni-channel platform that allows merchants to offer
lending, boost sales, and increase checkout conversions. Bread their customers the ability to spread the cost of products or
integrates with sales software (Shopify, Magento). services into interest-free installments.
Differentiator: White-label & installments Differentiator: Installments
Q3’18 Funding: $60M Series C Q3’18 Funding: $15M Series A
Select Investors: RRE, Menlo, Bessemer, Kinnevik Select Investors: American Express Ventures, Mastercard
40
 India sees next wave of lending startups focused
on point-of-sale to boost booming e-commerce
Select Q3’18 alternative lending deals

Focus: Omni-channel EMI payment Focus: Digital lending platform that Focus: Digital credit platform for
and digital lending platform focused enables people to pay using digital EMI, college students providing monthly
on financing electronics and without the need for a credit card or a payment plans for e-commerce
appliances. Partners include Amazon, credit score. purchases (Amazon, Flipkart)
Flipkart, Uber, and others. without collateral.
Differentiator: Card-less digital EMI
Differentiator: Multi-option EMI Differentiator: Micro-loans
Q3’18 Funding: $13.4M Series A-II
Q3’18 Funding: $30M Series C Q3’18 Funding: Undisclosed Series A
Select Investors: Omidyar Network, PayU
Select Investors: Endiya Partners, India, Ribbit Capital, Xiaomi Ventures Select Investors: FinUp Finance
Fosun RZ Capital, Sistema Asia Fund, Technology Group, Simile Ventures,
Vertex Ventures SE Asia, VenturEast Blume Ventures

41
 GLOBAL VC-BACKED
FINTECH Q3’2018

REAL ESTATE

MACROS SECTOR
TRENDS

42
VC-backed fintech companies focused on real
estate are still promising despite deal dip
26
24

19

15

13

$306 $153 $433 $413 $121

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
*Real estate tech is a broader category inclusive of companies outside of fintech 43
 Real-estate tech sees next wave of startups using AI
and data to tap into CRE investing opportunities

Last Funding Last Funding Total Funding

Last Funding
Undisclosed Series B // US $18M Series A // US & Israel $.1M Seed // India $3M
AI platform that leverages proprietary algorithms Suite of online services that enables CRE
Collaboration, centralization, and workflow
to ingest and analyze 100+ data sets to professionals to analyze, interpret, and
platform for commercial property investors.
recommend CRE investment opportunities. gain insight on commercial property
In May, Dealpath opened its third party API to values, market conditions, and current
In June, Skyline invested $26M for two multifamily availabilities.
integrate with iLevel, Compstak, Okta, and other.
properties in Philadelphia sourced from its AI.
Select Investors Select Investors Select Investors
JLL Spark JLL Spark, Sequoia, Arbor Ventures Proptech Accelerator, DMG Information,
Real Capital Analytics
44
 Startups open door to portfolio diversification with real
estate-backed assets by borrowing existing biz models
PEER-TO-PEER CROWDFUNDING ROBO-INVESTING

Last Funding Last Funding Last Funding

Undisclosed Series C // London $8M Series B (Jul’18) & $.05M Unattributed (Oct’18) $1M Convertible Note// US
Lendinvest is a marketplace property lender Crowdstreet is a US-based marketplace that connects Alphaflow automates real estate investing
that uses a P2P model to connect borrowers accredited investors, family offices, and institutions by leveraging a robo-advising model to
with bridge and rent-to-let financing. Retail and with sponsored commercial real estate projects. generate passive income-producing
institutional investors are then able to invest in Crowdstreet leverages a crowdfunding model to portfolios.
LSE listed bonds securitized from the loans. connect investors to co-invest with developers.
The company launched in January 2016
Lendinvest has lent $2B and helped borrowers Crowdstreet’s investors have deployed $350M across and has $17.32M of assets under
buy, build, and renovate 5,000+ properties. 250+ properties. management
45
GLOBAL VC-BACKED
FINTECH Q3’2018

INSURTECH

MACROS SECTOR
TRENDS

46
Insurance tech funding boosted by mega-rounds
to unicorns to fuel further product expansion
Global VC-backed insurance tech financing trends, Q3’17 – Q3’18, ($M)
46
44
40

34

25

$240 $599 $660 $486 $1,066

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
47
 With $1B+ in funding, Oscar eyes Medicare
Advantage with potential help from Alphabet
Select healthcare investments from Google open
potential avenues for further growth
Oscar’s customer experience is now
integral to its brand
Mar’18 // $375M Corporate Minority (Alphabet)
$3.2B Valuation
Select Investors:
Alphabet, Verily, Google Capital, Google Ventures,
Founders Fund, General Catalyst, Khosla Ventures,
Thrive Capital, 8VC

Growth strategy:
• Entering the Medicaid Advantage space by 2020
• Using in-house machine learning applications to
identify new markets to enter and at-risk patients
• Forecasted to grow to 260K members in 2018
• Expanding to Ohio in 2019 through a partnership
with Mount Carmel Health System

48
 Auto carriers raise large investments in 2018 to
fuel expansion Licensed & Planned

Jul’18 // $90M Series E Aug’18 // $100M Series D

Select Investors: Valuation $1B
Tokio Marine Holdings, Intact Mar’18 // $51M Series C
Financial, Index, NEA Select Investors:
Redpoint Ventures, Ribbit Capital,
States (8): CA, IL, NJ, OR, PA, VA, Scale Ventures, Tiger Global
WA, OR Management

Description: States (20): AZ, IL, IN, KY, LA, MS,

Metromile provides pay-per-mile MO, NM, OH, OK, PA, TX, UT, OR
insurance based on factors
including age, vehicle, and driver Description:
history. The startup doesn’t charge Root Insurance’s mobile app tests
for miles driven above 250/day driving habits for 2-3 weeks
(150/day in NJ). Metromile has also including mileage, hard braking,
built out its own mobile claims
dangerous routes, driving
service.
regularity, and time of day before
49
insuring “good drivers.”
GLOBAL VC-BACKED
FINTECH Q3’2018

DIGITAL
BANKING

MACROS SECTOR
TRENDS

50
Digital banking startups are cropping up
globally to challenge traditional institutions
Global VC-backed digital banking financing trends, Q3’17 – Q3’18, ($M)

20

18

13 13

10

$132 $165 $752 $459 $226

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
51
52
Q3’18 saw 18 deals
Startups Disrupting Retail & Commercial Banking
in digital banking
worth $226M
Variations on the digital
challenger bank model
championed in Europe are
spreading globally with new
entrants targeting niche
customer pain points.
Collectively this year,
startups in our market map
have raised over $1.7B in
venture capital across 55
deals, both annual records.

53
WHY BANKS SHOULD CARE

Fintech challengers have 15M+ reported users

Combined, startups disrupting banking have attracted millions of customers, accounts, and downloads
5,000,000

3,000,000

1,500,000 1,600,000

1,046,000
796,000
600,000 600,000
450,000
200,000 210,000 250,000
100,000 120,000

Loot Lunar Greenlight Starling Tandem Varo Neon Monese Gimi Monzo N26 Chime Revolut NuBank
Financial
Source: Company’s respective press releases 54
 Startups targeting the next generation of bank
customers to teach money fundamentals early
Select Q3’18 digital banking deals

Focus: Pre-paid cards

Focus: Automated allowance Focus: Reloadable debit cards Milestone: In August 2018, Spriggy
Milestone: In September 2018, Current Milestone: In March 2018, Greenlight reported 125,000 parents and kids
crossed 200,000 customers. crossed 100,000 customers. (about 45,000 families) had signed up.
Q3’18 Funding: $2.81 Series A-III Q3’18 Funding: $40M Undisclosed Q3’18 Funding:
Select Investors: QED Investors, Expa, Undisclosed Series A
Select Investors: Amazon Alexa Fund,
Fifth Third Bank NEA, SunTrust, Social Capital, Ally Financial Select Investors: Alium Capital, Grok
Ventures 55
DIGITAL BANKS TARGETING NICHE PAIN POINTS SEE SUDDEN INVESTOR IN TEREST

Last Funding Valuation

$125M Series C // Oct’18 $1.1B
Brex is a San Francisco-based B2B financial services
company that extends credit to startups. Startups
typically do not meet financial qualifications for business
credit. Leveraging an in-house KYC and underwriting
process, Brex issues credit based on the amount of
B
money in the startup’s corporate bank account.
Brex’s core products include a credit card issued in
partnership with Visa and Sutton Bank that links to a
mobile app that automatically captures, manages, and
digitizes expenses. Brex launched out of beta in June
SELECT STARTUP
2018 and reports having onboarded 1,000 customers.
CUSTOMERS

Select Investors
DST, Green Oaks Capital, Ribbit Capital,
Y Combinator, Max Levchin, Peter Thiel

56
MORE TO COME?

Regulators are lowering barriers for tech entrants

Brazil cuts interest rates to new record low

of 6.5%
March 21, 2018 |

57
GLOBAL VC-BACKED
FINTECH Q3’2018

CAPITAL
MARKETS

MACROS SECTOR
TRENDS

58
Capital markets tech funding deals drop to five-
quarter low
Global capital markets tech VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)

65

49
47
41

35

$684 $603 $1,117 $1,613 $929

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

59
 Emerging banking-as-a-service startups look to give
“legacy infrastructure” a fintech facelift

Last Funding Last Funding Last Funding

$17.4M Corp. Minority // Ireland $8.75M Series A // Amsterdam $17M Series A // United States
Leveris is an end-to-end white-label Cobase is a platform offering multi-bank SynapseFI’s API allows fintech
platform that provides banking connectivity that makes direct connections with developers to connect with banks to
infrastructure. The “bank-in-a-box” service banks or uses existing networks like SWIFT. Key build fin services and for banks to
helps both financial institutions and features include a central payment hub, cash automate & extend back-end operations.
fintechs to run core services. management, and treasury management modules. SynapseFI has processed $10B
transactions for 1.5M customers.
Select Investors Select Investors
Link Market Services ING Ventures Select Investors
Core Innovation Capital, Trinity Ventures
60
INVESTORS LOOK TO RPA FOR WHITE COLLAR AUTOMATION

EXAMPLE WORKFLOW AUTOMATION

Last Funding

$235M Series C // Q3’18

Valuation $3B
UiPath specializes in robotic process
automation, leveraging computer
vision to operate the user interface
layer of software more efficiently &
accurately than human users.
Select Investors
Sequoia, Accel, capitalG, Credo Ventures,
Kleiner Perkins Caufield & Byers

SELECT CUSTOMERS

61
OVER A DECADE IN THE MAKING, “RPA” IS THE NEW “BIG DATA”

RPA companies move upmarket to automate

white collar jobs in financial services

Established: 2003 Established: 2005

Focus: Automation Anywhere is a cognitive Focus: Softomotive offers automation
RPA platform that uses AI and machine solutions designed to improve
learning to learn from human behavior to operational efficiency, reduce costs, limit
automate business processes both on-premise exposure to risk, and drive compliance.
and in the cloud. The company works across The company deploys its RPA software to
industries including financial services. organizations in banking, insurance,
accounting, and others.
Q3’18 Funding: $250M Series C*
Valuation: $1.8B Q3’18 Funding: $25M Series A*
Select Investors: General Atlantic, Goldman Select Investors: Grafton Capital
Sachs, NEA

*Industry coverage is broader than financial services and funding round not included in fintech financing 62
GLOBAL VC-BACKED
FINTECH Q3’2018

REGTECH

MACROS SECTOR
TRENDS

63
Regtech sees pullback in early-stage deals and
funding flows to established business
Global regtech VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)

30

22
21
17

13

$117 $253 $333 $218 $406

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18
64
Data breaches prevail as the number of
compromised data records continues to climb

65
 Incumbents jump in on data-as-a-service startups
to upgrade fraud prevention on heels of breaches
Acquired
Headquarters: UK Headquarters: US
Focus: Ongoing surveillance and AML Focus: Knowledge graphs and data mapping
compliance
Description: Enigma aggregates data into
Description: Quantexa uses big data representations of real-world relationships,
analytics to tackle complex financial providing a source of intelligence on people,
crime and data challenges within the places, and companies.
financial services, corporate, and public Headquarters: US
Q3’18 Funding: $95M Series C
sectors. Acquired Q3’18
Select Investors: BB&T, Capital One Growth
Q3’18 Funding: $20M Series B Focus: Real-time credit reporting, data
Ventures, Comcast Ventures, Crosslink Capital,
Select Investors: Albion Capital, Dawn MetLife, NEA, Partnership Fund for New York certification, and authentication services
Capital, HSBC Venture Capital City, Third Point, Two Sigma Ventures

66
APPENDIX Q3’18:

VC-backed fintech
regional trends

67
ASIA FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:

$1.81 BILLION
ACROSS

123 DEALS

68
Asia sees deals and funding level out after
record in Q2’18
Asia VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
136

123

105
94
85

$709
$1,661 $2,122 $16,132 $1,807

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

69
US FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:

$2.8 BILLION
ACROSS

130 DEALS

70
US deals dip near
US fintech funding deals and funding dipped in Q3’18
5-quarter low
US VC-backed fintech financing trends, Q3’17 – Q3’18, ($B)
Early-stage deals slipped
after a record Q2’18 causing 175
157
deals to drop for the second
consecutive quarter in
130
Q3’18. 132 129

Funding dipped slightly from

Q2’18 highs and saw a boost
from 7 mega-rounds worth
$1.3B.
Unicorns Stripe, Oscar,
Gusto, and UiPath all raised
mega-rounds in Q3’18.
$2.0 $2.4 $2.7 $3.4 $2.8

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

Amount ($B) Deals 71

EUROPE FINTECH VC-BACKED EQUITY FUNDING IN Q3'18:

$764 MILLION
ACROSS

85 DEALS

72
Despite the dip in funding, deals in Europe jumped
driven by a fresh crop of early-stage fintechs
Europe VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)

87 85
77 75
72

$782 $989 $1,084 $853 $764

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

73
UK fintech
UK-based fintech rebounded to a 5-quarter high
recovered after
UK VC-backed fintech financing trends, Q3’17 – Q3’18, ($M)
Brexit fears stalled
quarterly deals 45

UK fintech saw deals hit a 5- 39

quarter high of 45, up 15%
from Q3’17. 31
30

The UK represented 53% of 25

total deals in Europe.

$353 $531 $533 $490 $428

Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

Amount ($M) Deals 74

 Methodology
CB Insights encourages you to review the methodology and definitions employed to better understand the numbers presented in this
report. If you have any questions about the definitions or methodological principles used, we encourage you to reach out to CB Insights
directly. Additionally, if you feel your firm has been under-represented, please send an email to [email protected] and we can work
together to ensure your firm’s investment data is up to date.

What is included: What is excluded:

― Equity financings into emerging fintech companies. Fundings must be put into VC-backed — No contingent funding. If a company receives a commitment for $20M subject to hitting
companies, which are defined as companies who have received funding at any point from certain milestones but first gets $8M, only the $8M is included in our data.
venture capital firms, corporate venture groups, or super angel investors.
— No business development / R&D arrangements, whether transferable into equity now, later, or
― Fundings of only private companies. Funding rounds raised by public companies of any never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity
kind on any exchange (including Pink Sheets) are excluded from our numbers, even if they financing, nor is it from a venture capital firm. As a result, it is not included.
received investment by a venture firm(s). Note: For the purposes of this analysis,
— No buyouts, consolidations, and/or recapitalizations. All three of these transaction types are
JD.com’s finance arm JD Finance and its $1B financing were included in the data per its
commonly employed by private equity firms and are tracked by CB Insights. However, they are
investment from Sequoia Capital China in Q1’16.
excluded for the purposes of this report.
― Only includes the investment made in the quarter for tranched investments. If a company
— No private placements. These investments, also known as PIPEs (Private Investment in Public
does a second closing of its Series B round for $5M and previously had closed $2M in a
Equities), are excluded even if made by a venture capital firm(s).
prior quarter, only the $5M is reflected in our results.
— No debt / loans of any kind (except convertible notes). Venture debt or any kind of debt / loan
― Round numbers reflect what has closed — not what is intended. If a company indicates
issued to emerging startup companies, even if included as an additional part of an equity
the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount
financing, is not included. If a company receives $3M with $2M from venture investors and
which has closed.
$1M in debt, only the $2M is included.
― Only verifiable fundings are included. Fundings are verified via various federal and state
— No government funding. Grants, loans, or equity financings by the federal government, state
regulatory filings, direct confirmation with firm or investor, or press release.
agencies, or public-private partnerships to emerging startup companies are not included.
― Previous quarterly VC reports issued by CBI have exclusively included VC-backed rounds.
In this report, any rounds raised by VC-backed companies are included, with the
exceptions listed.

75
WHERE IS ALL THIS DATA FROM?

The CB Insights platform has the details

on all the data included in this report

CLICK HERE TO SIGN UP FOR FREE

76