Trends in FinTech

An OurCrowd Briefing
Zack Miller & Mick Weinstein

Your Hosts
Mick Weinstein
VP Marketing
BillGuard

Zack Miller
Head of Investor
Community @ OurCrowd

Focus tonight

The History of FinTech Post-Internet

Broker on the phone >> Charles Schwab
Low cost passive investing via online ETFs >> fully
automated, low or no cost robo-management
Expensive, slow, inconvenient bank transfers >> fast,
cheap payments
Bank lending >> P2P debt financing
Private placements >> equity crowdfunding
Illiquid holdings & networks of friends >> new secondary
markets

Asset Management / Robo-visers

Bessemer, Citi
Ventures, NW Mutual

Institutional Venture
Partners, Venrock,
BlackRock

$75M valuation

Canvas Ventures

JP Morgan, Goldman,
Foundation Capital,
Norwest VP

$300M valuation

Index, Ribbit, Greylock,

Benchmark

Union Square, Spark

Asset Management / Robo-visers

Well-funded, maturing space
Competing on price
Are these creating new
services or simply replicating
existing services online?
Another big challenge: is
passive management going
to zero cost?

Lower costs >> bigger scale >> more

data
Big data world means that data will
be a core corporate asset

Content: 4 Different Approaches

Union Square, Bain

Capital Ventures

Accel, Northwest
Mutual

Steelpoint Partners

Accel, Benchmark

Content: 4 Different Approaches

Differentiating and competing on product quality
Companies like SigFig (automated professional service)
and LearnVest (subscribing to advisers) are creating new
business models to deliver financial services.
Can these sites be stand-alone traffic destinations?
UPDATE: Seeking Alpha broke up with Yahoo Finance
yesterday

Payments

Blumberg, Lool,
Rhodium

Khosla, Sequoia, KPCB, Citi,

Starbucks, Goldman, Morgan
Stganley, Barclays, JP Morgan

Khosla, Founders Fund,

Sequoia, General Catalyst,
Andreessen Horowitz

Ebay - $1.5B acquisition

Greylock, Accel

Accel

Payments
January 2008 June 2013: VC Dollar Amount Share
2013

29
23

2012
2011

9
33

2009

10

28
46

11

32
10

19

10
4

28

2010

2008

10

50

4 6

Banking / CorpFin

12

49

14

53

70
Capital Markets

Data Analy@cs

5
Payments

PFM

Payments

Big entrants are expected

to arrive soon

Starbucks processing 6M
transactions/week (7/14)

70% + penetration in home

market, rapidly growing across
Africa & Eastern Europe

~$2B market cap on

NASDAQ

Approaching $1B market

cap on NASDAQ

Retail Banking: slow adaptation to the Internet

Todays retail banking space
Bain & Co: more than half of
top 80 institutions are not
meeting benchmarks
consumers already expect from
banks
Offline, inconvenient,
expensive, low value-add

Retail Banking & Personal Finance Tech

Simples Features:
Goals ability to set daily
savings towards a goal
Safe to spend birds-eye
view of spendable money given
budgets, goals, cash flow,
recurring charges, etc
Acquired by Intuit ~$170M

Retail Banking & Personal Finance Tech

Benchmark, Shasta, First Round, Founders

Fund acquired, Intuit $170M

Innovation Endeavors, Founders

Fund, Khosla, Bessemer, OurCrowd

Acquired, Intuit $360M

Sanford Weill, former CEO of Citibank

Trend: Personal Finance Management Challenges

Challenges of moving up
the value chain
A very funded space, but
relative to total possibilities
maybe not

PFM is dead

But: A lot of opportunities

still exist with

SOURCE: http://bit.ly/ocfintech1

P2P Debt Financing

Personal and SMB loans
today:
Classic case of
middleman in an
automatable process
Credit crunch despite
increasing bank profits has
material effect on job
growth

P2P Debt Financing

T. Rowe Price, Wellington,

Blackrock, Sands Capital,
Norwest, Canaan, Union Square

Index Ventures, Accel, Union

Square, Ribbit Capital

Sequoia, Blackrock, DFJ, Accel,

Institutional Venture Partners

Greylock, Accel, Meritech

Bessemer, Rothschild Family,

Arrowgrass

Equity Crowdfunding

First Round, Y Combinator,

Felicis, Spark, Intel Capital,
Andreessen Horowitz, General
Catalyst, SV Angel

Google Ventures, Atlas, DFJ,

KPCB, SV Angel, Floodgate

Angels

Canaan Partners, Google Ventures,

Union Square, Maveron

Equity Crowdfunding

Virgin America Partnership

February 2014
Sharing hot consumer brands with Virgin
Airlines ameni7es procurement team

ZionTech IBM Incubator Deal

April 2014
IBMs rst accelerator in Israel opened in
conjunc7on with ZionTechs parent company, a
bou7que investment rm ZionTechBlue Ini7a7ves

GE Ventures OurCrowd Partnership

November 2013
Exclusive dealow sharing agreement allowing GE
Ventures alloca7on in crowdfunding rounds

Unique products

The Internet has changed (almost) everything in finance

Asset-ification of everything:
Unsecured personal loans
Bets & predictions in some niche futures/options markets
U-Haul investing club example

Internet finance 1.0 is now being disrupted by fintech 2.0

Personal broker >> Charles Schwab >> Robo-Visors >> zero fee passive platforms

Who is disrupting who, though?

Robo-visors claim to go after all passive investment firms, but are they going after
anyone outside the low-cost, passive management firms like Vanguard?

Fintech is slower & more expensive to build

Trend: Challenges in disrupting the bank

Simple and the like are skins on top of the UI of existing bank tech
A disruptive bank would be one that owns the full technology stack

Trend: Investor Types

Trends: Who is investing?

Corporates are getting
particularly active:
In 2013, corporate venture
funds invested more than
traditional VCs in the
fintech space

Fintech's star investor:

Google Ventures (?!)
Angel List
CircleUp
Lending Club
LendUp

Trend: VC Money Into FinTech

January 2008 June 2013 VC Deal Share
2013
2012

21
18

2011
2010

12

14

14

24

12
13

22

14

18

16

2008

17

13

Banking / CorpFin

10

47

9
10

2009

44

Capital Markets

45

43

11

50

53
Data Analy@cs

9
Payments

PFM

Q&A
Mick: mick@billguard.com | @mickwe
Zack: zack@ourcrowd.com | @newrulesinvest