Financial Technology, Data, and Analytics

Dear Clients and Friends,

Our latest Fintech m&a report can be found below. It highlights m&a trends and transactions in the seven segments of the Fintech world that we follow and sometimes lead. Please see below for our latest Fintech Market M&A Update.

Compliance is a hot topic at many financial services companies. We’re not sure if it stems from the raft of new regulations or the well-publicized consequences of failure – including the US$500 million fine levied on Commonwealth Bank of Australia for failings that allowed drug gangs to launder money; the $900 million that ING Bank agreed to pay to Dutch authorities to end a money laundering case; the hundreds of millions that Wells Fargo has been fined in connection with risk management failures; Google’s $1.2 billion fine for violating Europe’s data privacy laws; or the $8 billion that Denmark’s Danske bank could be facing.

We advise firms that offer technology to help companies avoid these big fines, comply with laws, regulations, and business practices globally. It’s a broad field. Some compliance tech firms help financial services firms comply with US laws such as the Dodd-Frank Wall Street Reform and Consumer Protection Act; the Foreign Account Tax Compliance Act (FATCA); Sarbanes–Oxley; the Foreign Corrupt Practices Act (no bribes); and Graham Leach Bliley (personal data protection); or regulations in the 46 states that have their own data breach notification laws. Some help organizations comply with similar European rules including the General Data Protection Regulation (GDPR); MiFID II, Basel III; Solvency II; and the European Market Infrastructure Regulation (EMIR). They may focus on contract compliance; social media policing; regulatory reporting, records retention, dispute resolution, KYC, AML, or third-party due diligence. Or they may offer tools for cybersecurity protection against hackers, thieves, suspicious customers; suspicious employees; malware; viruses; phishing; and ransomware.

Compliance is complicated – but the consequences of compliance failure can be even more complicated – and expensive. We know many strong compliance tech companies around the world. We enjoy advising them as they seek to buy, sell or raise capital.  Some information on the trends, transactions and m&a values in the seven segments of the Fintech world that we follow and sometimes lead can be found in the following report. A few of the more interesting recent transactions include:

• CC Capital Cannea Holdings and Thomas H. Lee Partners agreed to acquire Dun & Bradstreet (NYSE:DNB) for $6.9bn at an implied 3.6x LTM revenue and 12.4x LTM EBITDA,
• Oscar Insurance (New York, NY) raised $375mm in a growth funding round from Alphabet,
• Moody’s Corporation (NYSE:MCO) agreed to acquire Reis in an all-cash transaction for approximately $278mm at an implied 5.5x LTM revenue and 37.8x LTM EBITDA,
• Q2 Holdings (NYSE:QTWO) agreed to acquire Cloud Lending Solutions for $105mm,
• Upgrade (San Francisco, CA) raised $62mm in a Series C funding round led by CreditEase Fintech,
• Marlin & Associates’ client RapidRatings receives $30mm growth equity investment. (See case study here.)

Please see our September Fintech M&A Update below.

Sincerely,

P.S. We’ll be attending The Futures and Options Expo in Chicago, October 16th-18th, and Money2020 in Las Vegas, October 21-24th. If you’d like to arrange a meeting at either of these events, please contact Scott Friedman at sfriedman@marlinllc.com.