Financial Technology, Data, and Analytics

Dear Clients and Friends,

The Fintech M&A Report that follows tracks deals and trends in the seven sectors of the fintech universe that we follow and sometimes lead.  Please find it on the following pages.

If you are an avid reader of fintech m&a investment news and analyses as we are, you may have noticed an interesting shift in tone over the past year. (And I’m not referring to national politics.)

For one, at a macro level, after seeing investments into fintech increase at dizzying rates between 2010 and 2015, the total amount invested into fintech in 2016 seems to have plateaued to around $20 billion – which is still an impressive figure. For 2017, if anything, we see a slight tapering off in total fintech investing, as industry participants and financial sponsors digest recent actions. There is still plenty of money going into the sector, but there is also a realization that the fintech world has changed markedly over the last six years; winners and losers in some sectors have already been determined; and in others there are already enough players that new ones have trouble establishing traction.

So where is the smart money going? Well, an increasing amount is going to b2b fintech. We like that. 

The same buzz that has been around b2c lending and money transfer services, mobile bill payment systems, crypto-currencies, wealth management platforms, robo-advisors, micro-lending, mobile wallets, social trading investment platforms and more has morphed into the b2b world as firms look for innovative ways to move money safely between corporations; comply with regulations; manage investments; prevent fraud; procure and pay for goods; clear and settle transactions; invoice and collect from clients; store, retrieve and transmit high value documents; and much more. We see it in capital markets, wealth management, commercial banking, payments, GRC, insurance, real-estate and virtually all other aspects of the b2b fintech world. That’s our turf. It’s an ever changing world.

The report that follows highlights some of the more interesting deals this month in the seven sectors of the fintech universe that we follow. Some of the more interesting deals include:

• PayPal (NASDAQ:PYPL) agreed to acquire TIO Networks for $233mm, valuing the company at an implied 3.0x LTM revenue and 26.6x LTM EBITDA,
• Funding Circle (London, United Kingdom) raised GBP82mm (~$100mm) in its sixth round of funding led by existing investor Accel Partners,
• Klarna (Stockholm, Sweden) agreed to acquire BillPay for a reported £60mm (~$75mm),
• Temenos (SWX:TEMN) made a binding offer to acquire Rubik for $55mm, valuing the company at an implied 1.7x LTM revenue,
• MYOB (ASX:MYO) agreed to acquire Paycorp for AUD48mm (~$37mm).

Please see the rest of our March Fintech Market Update, below.