Financial Technology, Data, and Analytics

Dear Clients and Friends,

As we write this, worldwide reported deaths from COVID-19 (caused by the coronavirus) passed 3,000 (six in the US). Global equity markets have been whipsawed. And, as you will see in this report, m&a values and trends have remained strong in the ten segments of the FinTech, Data and Analytics world that we follow – so far.

Recent news reports on coronavirus alternate between near hysteria and sober perspective. They trumpet each new reported infection in 47+ countries (about 90,000, including 9,000 outside of China). They note disruptions in global supply chains, travel and tourism that could cause recessions in China, Singapore, Japan and Germany. (NYC expects 285,000 fewer Chinese tourists this year.) They show pictures of stranded cruise ships and quarantined tourists – and quote leaders in Europe, the Middle East and the Americas that have cancelled conferences and restricted travel to and from affected regions. 

Then the media note that containment efforts do seem to be working and say that, with eight billion people on the planet, even if the total number of infected people outside China were to increase tenfold, the odds of contracting COVID-19 outside China would be  about one in 100,000 vs. the one in 3,000 chance of being struck by lightning. The fatality rate outside of China is around 2% of those infected – a lot higher than the 0.2% for seasonal flu, but still well below the 10% for SARS, 13% for TB, and 34% for MERS. Further, unlike seasonal flu, children seem to weather the coronavirus easily. Dozens of laboratories are working on preventions and treatments. Central banks are injecting $100+ billion each month into the system. Interest rates are at historic lows.      

We don’t have the answers. The World Health Organization estimates that every year 10 million people contract Tuberculosis – and 1.3 million die from it.  We see considerably less panic. The NY times says that we should limit travel to affected areas, wash our hands often and don’t hug strangers. We had planned to attend the International Futures Industry Conference in Boca Raton next week before it was cancelled. We still plan to attend the Innovate Finance Global Summit in London in April – if it takes place. We won’t hug strangers. But we will keep advising buyers and sellers of strong FinTech, Data and Analytics companies worldwide where, as you will see in the report here, values remain strong. A few of the more interesting recent transactions include: 

• Revolut raised $500 million in a Series D funding round led by TCV (Digital banking)
• Intuit agreed to acquire Credit Karma for $7.1 billion (Credit scoring/reporting services)
• Worldline agreed to acquire Ingenico Group for $8.6 billion (Electronic payment solutions)
• Behavox raised $100 million in growth equity from Softbank (Reg Tech)
• CBOE acquired M&A client Hanweck Associates (Real-time risk analytics)
• CRISIL (an S&P company) completed its acquisition of M&A client Greenwich Associates (Market intelligence and advisory services)

Sincerely,

Ken