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. We think we see some light at the end of this tunnel.

It’s been a wild ride these past few months, and it isn’t over. It started with the global healthcare pandemic that – with no vaccine or effective treatment yet identified, and way too many people incapable of social distancing – has not gone away (500,000+ deaths worldwide and counting – including 130,000 in the US, growing by 600 daily). This led quickly to overwhelmed hospitals, travel bans, shutdowns, millions suddenly unemployed, and a global recession that began in February – ending the longest period of growth in US history – 128 months. Stock markets dropped, rebounded, dropped again – and rebounded – again. And to all this we add social unrest that has spread globally and probably won’t go away soon either – until a few things change.

As you will see from the attached REPORT, m&a in our industry has had similar downs and ups as buyers and investors “paused” deal discussions to focus on challenges within their own firms; understand impact on target firms; and confront the challenge of negotiating and conducting due diligence without face-to-face meetings.

The good news is that social distancing in much of the developed world seems to be working. That has led to more available hospital beds, and a slow re-opening of some economies, which leads to increased employment, more retail sales and new-home sales, and manufacturing indices heading up.

As you will see in our latest REPORT, some deals are happening. June was one of the busiest months for U.S. IPOs since September 2014. And we are seeing an uptick in deal related discussions. Until we have wide distribution of an effective vaccine that has yet to be developed, the path to recovery still requires social distancing – a fact that some people have still not accepted. But if current trends continue, and if more people are smart, we will see continued improvement across the board. When this crisis does end, history has shown that pent up demand will spur more economic activity; most (not all) businesses will recover, and m&a activity will rise. Our aim is to help our clients be ready.

As you will see in our latest REPORT, FinTech, Data and Analytics m&a is still alive. A few of the more interesting transactions over the past month include:

• Dun & Bradstreet’s $1.7bn IPO (Data & Analytics – Financial Services)
• Societe Generale agreed to acquire Shine for $113mn (Bank Tech)
• Checkout.com raised $150mn in a Series B funding round led by Coatue Management (Payments Tech)
• MasterCard agreed to acquire Finicity for $825mn (Payments Tech)
• CoStar Group agreed to acquire Ten-X for $190mn (Real Estate Tech)
• OJO Lab raised $63mn in a Series D funding round led by Wafra (Real Estate Tech)

– Ken