Financial Technology, Data, and Analytics

Dear Clients and Friends,

Our latest report on values and M&A trends in the eleven segments of the FinTech, Data and Analytics world that we follow is here. It’s been a heck of a month.

We are up to around one million cases of COVID-19 worldwide – including 200,000 in the US. More than 50,000 people have died globally – including 13,000 in Italy, 9,000 in Spain, and 4,000 in the US. In some places, COVID-19 is doubling every three to seven days. It is already overwhelming some medical systems and the forecast is for US deaths to reach 200,000 or more. That may be less than the 650,000 in the US who die each year from heart disease, but it is a lot more than the 23,000 expected to die in the US from seasonal flu this year.

As you will see in the report here, valuations for companies in our world are not immune from this crisis. As businesses are shuttered and workers furloughed, some buyers and investors have reassessed risk. Values are now about 20% below January – not as much as much as you might expect – possibly for good reason.

The experts tell us that this crisis is likely to be over in months. With that in mind, many financial sponsors and corporations, flush with cash, remain on the hunt for opportunities. While compromised companies should hold off going to market, several of our stronger clients remain in discussions with potential partners. This week our client, Barcelona-based Strands Labs, SA, agreed to be acquired CRIF S.p.A, one of Italy’s largest credit bureaus and a leading open banking company.

We don’t have the answers. We know that fear has pushed many governments to shut down much of their economies – hoping that the damage caused by shuttered businesses, soaring unemployment and increased national debt – and personal debt – will not be worse than the disease we seek to cure.

When this crisis does end, history has shown that pent up demand will spur economic activity; most (not all) businesses will recover, and employment will rise. There is light at the end of this tunnel. Our aim is to help our clients be ready, when it shines. Our latest M&A report can be found here. A few of the more interesting transactions over the past month include:

• CRIF p.A. acquired M&A client Strands Labs (Digital banking)
• Alignment Healthcare raised $135 million in a Series C funding round from Fidelity Investments, T. Rowe Price, and Durable Capital Partners (Insur Tech)
• Dentsu Aegis Network agreed to acquire Merkle for $98 million (Data Analytics)
• Bakkt Holding raised $300 million in a Series B funding round from Intercontinental Exchange and other investors (Bitcoin futures trading platform
• Ada Support raised $44 million in a Series B funding round led by Accel (Chatbot Solution)
• Nets agreed to acquire PeP for €405 million (Payments Tech)

Sincerely,

Ken Marln