payments - EY-Innovalue · 2016-12-27 · Groundfloor (), a “real estate crowdfunding” website is among the increasing number of start-ups trying to revolutionize the real estate

Attendees

Alongside 10,000 other people I made the way to Las

Vegas at the end of October to this year’s Money

20/20 conference. The current size of this annual

event underlines the current level of interest by the

general public, the media, investors and industry

insiders in fintech, payments and general innovation

in financial services. By now, every major bank has set

up internal teams with the goal to manage the trans-

formation to the digital age – either through in-house

developments, partnerships or acquisitions and be

able to meet the needs of the much quoted millennial.

And members of these teams were represented plen-

tifully in addition to investors, start-ups and represen-

tatives from the large payment incumbents.

Announcements

Corporate announcements form a big part of Money

20/20’s agenda and a summary of selected key notes

is provided in the following chapter:

The most notable announcement was probably the

launch of ChasePay. With 94 million preloaded cards,

Chase hopes to have a critical mass of consumers to

compete with the likes of Apple Pay, Android Pay,

Samsung Pay and all of the other digital wallets.

ChasePay will run on ChaseNet, Chase’s “closed-loop

network”, which is effectively Visa’s network as this

was agreed as part of a 10-year deal in 2013. The

agreement allows Chase to offer ChasePay at a fixed

price: “there will be zero network fees for merchants,

there will be zero merchant processing fees for the

merchants and there will be zero merchant fraud lia-

bility”. In addition, Chase is cooperating with MCX’s

CurrentC to grant relevant merchants acceptance

from day one. The partnership combines consumer

(Chase) and merchant reach (MCX) and could be a

game changer for CurrentC that has been written off

already by many in the industry.

MCX’s CEO Brian Mooney also held a separate key

note, demonstrating the progress made with Cur-

rentC during the initial trial period in Salt Lake City.

CurrentC supports multiple payment technologies,

ranging from QR codes to BLE and NFC, depending

on the use case of the merchant (in-store, at the

pump or drive-through etc.) and achieved a seam-

less integration of the multiple loyalty programmes

of MCX’s merchant members which represent

annual revenue of over USD 1 trillion. The combina-

tion of payments and loyalty in one transaction, with

loyalty programes that already matter to the user

today, could be a real differentiator for CurrentC.

Google (Android Pay) and Samsung didn’t want

to be left out and also presented their solutions.

Samsung Pay is based on the technology of Loop, a

company Samsung recently acquired. Loop’s pat-

ented Magnetic Secure Transmission technology

“turns in-store payment terminals where you nor-

mally swipe a credit card into contactless readers”

allowing “universal merchant acceptance”. From my

understanding, Samsung Pay is also working with

NFC, which would be helpful as the world is migrat-

ing towards the EMV standard and away from mag-

netic stripes.

With key notes from Poynt, Ingenico, Verifone and

First Data with its Clover product suite, POS system

providers were well represented. After a year of

development, Poynt is now ready to ship its cloud

based POS and already has commitments for about

500k terminals. The firm came with a massive

booth, USD 28 million in fresh funding and huge

ambitions to Las Vegas. The terminals are beauti-

fully designed and come with a sophisticated termi-

nal management system, app store and SDK.

Compared with that, Verifone’s next generation POS

“Engage” looked quite traditional, but Verifone

already has the scale that Poynt hopes to reach one

day. Like Poynt, Verifone and Ingenico presented

their own versions of cloud-based marketplaces for

business applications. First Data might currently be

at the forefront, with 128 apps available (in the US)

and more than 350 in development.

A report from LAs VegAs – reView of money 20/20

AndreAs HAbersetzer

Partner

paymentsInsight. Opinion.

VoL 11

COntent

1 A report from LAs VegAs –

reView of money 20/20

Andreas Habersetzer reviews this year's Money

20/20 conference.

3 extended pAyment fActories –

tHe potentiAL conVergence of digitAL

pAyments And trAnsAction bAnking

The article considers some of the key transaction banking

infrastructures and the implications and opportunities of

the growing relevance of digital payments from a corporate

treasury perspective.

5 mercHAnt AcceptAnce: tHe dis-

coUnter effect for credit cArds

And mobiLe pAyments

INNOVALUE investigates to what extent the recent moves

from large discounter merchants might impact the pay-

ment habits of German consumers.

7 pUbLic mArket VALUAtions And

tHe mArket enVironment

Markets have seen considerable movements over the past

three months with significant share price corrections in

August. Markus Massem takes a look at valuation drivers

and benchmarks the different groups within the payments

universe.

9 m&A ActiVity

What are the key drivers of M&A and IPO activity? Which

transactions made headlines in the 3nd Quarter of 2015?

What are recent takeover rationales? Robert Kayser

answers these questions.

11 VentUre cApitAL

Once again, the INNOVALUE team reviews the latest pay-

ment startup funding activity (Q3 2015). What are current

product or service innovations for investors, and what are

the global investment trends within the payment

ecosystem?

13 deAL ActiVity m&A

Transaction overview

15 Vc ActiVity

Transaction overview

payments Insight. Opinion.

Through its announced partnership with Affirm,

First Data will also bring consumer financing solu-

tions to the POS.

The most notable element of PayPal CEO Dan

Schulman’s key note was his continued emphasis on

PayPal’s commitment to provide SMEs with working

capital financing. So far, PayPal has provided over

USD 1 billion to SME’s in the US, UK and Australia.

Key topics – the Money 20/20 Hype Cycle

Trends change quickly in the current fintech envi-

ronment, where one exciting idea is quickly followed

by the next. At Money 20/20, topics are excitedly

discussed in one year, followed by disillusion and

reduced interest the year after. One of the mostly

debated topics this year was probably the block-

chain and its potential to provide existing services

more securely and efficiently as well as to build new

applications for business and consumers on top of

it. While the launch of Apple Pay absolutely domi-

nated conversations last year, the lack of traction led

to less enthusiastic assessment this year. The per-

ceived hype around certain topics followed by a

drought inspired the development of a “Money

20/20 Hype Cycle” (figure 1), based on Gartner’s

Hype Cycle for Emerging Technologie.

Start-ups to watch

Innovation and start-ups played a big role at Money

20/20 this year, with events like Launchpad 360, a

pitch competition and plenty of high profile VC’s

present.

Monk (www.getmonkapp.com), “a mobile platform

aiming to provide financial security by enabling

social circles to save, borrow and lend together”,

won the jury prize of the start-up pitch. Fluent

(www.fluentfunds.com) was most convincing to the

audience. “Built on the blockchain, Fluent’s platform

enables businesses to reduce friction, improve

transparency, and boost efficiency in financial and

commercial flows along the global supply chain”.

Groundfloor (www.groundfloor.us), a “real estate

crowdfunding” website is among the increasing

number of start-ups trying to revolutionize the real

estate sector, from origination to financing. David

Weiden, Partner at Khosla Ventures, described real

estate as one of the “most under-hyped” sectors in

FinTech. Another area where investors would like to

see more new initiatives includes insurance.

Finally a word about unicorns, (FinTech) start-ups

with a valuation of USD 1 billion or more, which are

increasingly entering difficult terrain or “no-man’s

land”, as one investor put it, as they are facing diffi-

culties in raising money at previous valuations or to

meet their inflated expectations regarding

valuations.

“the current size of this annual event underlines the current

level of interest by the general public, the media, investors and industry insiders in fintech, payments and general innovation in financial services”

figure 1: the payment market continues to be highly innovative, featuring solutions both for merchants and consumers

cloud-based pos / app marketplaces

faster payments

iot commerce

Artificial intelligence

blockchain

smb solutions

Alternative lending

mobile payments

social commerce

frictionless payments

b2b

tokenisation

p2p

On the rise At the peak Sliding into the through

Climbing the slope Plateau of productivity

2

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Sungard indicates that “40% of companies are oper-

ating with 11 or more payment initiation systems1

and 25% have over 21 payment initiation systems”.

While this number can vary based on the type of

company, it is a fact that companies, including SMEs,

operate complex payment operations with multiple

bank relationships, multiple accounts, and multiple

points of payments initiation, authorisation and con-

trol. This challenge is addressed through the cen-

tralisation of bank account management and

payment processing, that are otherwise managed at

business unit or subsidiary level, with the aim to

address cost duplication, lack of scale and the need

of visibility that is otherwise required for effective

cash and liquidity management.

The “payment factory”2 concept has now been

implemented in a variety of business models of

which the shared service organisation (SSO) and the

in-house bank (IHB) are the two most widely

adopted. In the SSO model a centralised

unit manages all outgo-

ing payments through

the centralisation of

account management,

payment expertise and

through the standardi-

sation of processes that

ultimately offer better

transparency, lower

transaction cost and

aggregated liquidity

positions. The IHB

model is focused on the

management of funding

and liquidity simplifying

cash utilisation,

improved visibility and liquidity by acting as a corpo-

rate’s “in-house” bank for the various business units.

While both models have their advantages, it can be

argued that a hybrid model leveraging the synergies

of both models would

offer the most benefits to

corporate treasuries,

albeit in a more complex

treasury structure. This

would combine efficient

funding management,

liquidity optimisation

with payment

management.

The statement from Sun-

gard at the beginning of

the article would be eas-

ily translated into a simi-

lar statistics for digital

payment acceptance.

While payment factories provide a consolidated

approach to outgoing payments, account receiv-

ables are very much polarised between a bank

model – that is aimed to invoice related

frAncesco bUreLLi

Partner

extended pAyment fActories – tHe potentiAL conVergence of digitAL pAyments And trAnsAction bAnking

Given the centrality of payments for cash and liquidity

management and the growing complexity of treasury management … there is the potential to extend the reach of a corporate treasury’s payment factory operations beyond payments to digital payments.

1 http://www.sungard.com/Regions/Africa/solutions/corporate-liquidity/payments-factory I 2 “A payment factory is an accounts payable function that has been centralized for an entire organization. This is an

improvement on a distributed payables system, which incurs more administrative costs to ensure that multiple payables systems are properly managed.” Source: AccountingTools

3

pAge 1


payments management – and a Payment Service

Provider (PSP) model – related to online receivable

payments where the role of a payment factory, in

terms of FX management and payment flow consoli-

dation across multiple payment instruments and

channel, is often fulfilled by a PSP on the back of an

online merchant acquiring proposition.

Given the centrality of outgoing and incoming pay-

ments for cash, and liquidity management and the

growing complexity of treasury management, on the

base of the increased flows of international trade and

e-commerce, there is the potential to extend the

reach of a corporate treasury’s payment factory

operations beyond payments to digital payments.

This would encompass incoming payments with an

optimised mix of FX handling, payment flow consoli-

dation that would ultimately result into an optimised

liquidity management.

As banks are often delegating and surrendering their

acquiring and digital payments business to monoline

acquirers and PSPs on a referral basis, and with the

ongoing blurring of the boundaries between steps of

the payment value chain, there is a potential for PSPs

branching out into transaction banking, to drive the

emergence of a consolidated payment factories

model. When this will happen, the PSPs opportunity

would include not only the provision of digital pay-

ment interfaces but the extension into the provision

of IHB platforms, driving further convergence and

blurring of business lines between digital payments

and transaction banking models.

Payment factories were a pre-eminent corporate

treasury topic two, three years ago that has faded

from mainstream debates likely on the basis of adop-

tion and business models that have reached a relative

stage of maturity, leaving the centre of public debate

to other arguments. It is highly likely that the topic will

regain pre-eminence rapidly as digital payment fin-

tech organisations realise the potential offered by the

ability to support corporate treasury solutions beyond

converging online and in-store payments.

sbU bank

sbU bank

sbU bank

in-house bank

shared service organization

payment factory

sbUdigital

payment interface

... trading partners

Internal netting

Cashflow forecasting

Cash and liquidity optimisation

FX management

Capital allocation

External netting

figure 1: payment factory

4

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mercHAnt AcceptAnce: tHe discoUnter effect for credit cArds And mobiLe pAyments

Large retailers accepting credit cards

In a series of announcements over the last few

months the largest German discounters have finally

introduced the acceptance of credit card payments

in all their stores in Germany. These announcements

included among them some of the largest food

retailers Aldi (Nord & Süd), Lidl and Netto as well as

Kaufland. Within the top five in the food retail sector

only the more upmarket players such as Rewe and

Edeka had previously accepted credit cards. Further-

more both MediaMarkt and Saturn, the large scale

electronics retailers of the Metro Group, have intro-

duced credit card acceptance in May of this year.

The most likely driver for this development is the

new regulation for interchange fees for card-based

payment transactions passed by the European

Parliament in March of 2015. This regulation will

come into effect by December 9th 2015 and

includes the capping of interchange fees for credit

card payments at 0.30% of the transaction value.

Currently the interchange fee depends on multiple

factors such as vertical and transaction technol-

ogy and could be up to 1.85%. Supermarkets in

Germany always had a preferred status. For exam-

ple for Visa transactions the interchange varies

between 0.68% - 1.00%. Cutting the payment

costs by such a degree clearly makes credit cards

attractive for these low margin high volume

businesses.

Market implication Germany

We think that the move by German food discounters

to credit card acceptance will lead to a significant

increase of the market share of credit card payments

in Germany. In the recent past the share of credit

cards in Germany was relatively low at 5.3% of the

retail transaction volume. Within the food sector this

was even lower at about 2.7%. The contribution

from food discounters was practically zero.

Within the top five food retailers three merchants

(Aldi, Lidl, Netto) joined their two peers (Rewe,

Edeka) in credit card acceptance. This adds over EUR

57 billion in potential credit card volume. With food

retail accounting for about one third of the German

retail market this definitely could lead to a so-called

discounter effect for the credit card market. (figure 2)

figure 1: Credit card regulation and new acceptance by merchants

may June July

§ €

march 2015 Interchange regulation passed

december 9th 2015 Interchange regulation in effect

We have already seen such a discounter effect back

in the mid-2000’s when discounters started to

accept EC debit cards. The annual growth rate in

consumer cards spending at retailers jumped for

about three years from 12% to 34% before settling

again at a base rate of about 10%. (figure 3)

97(21%)

57(59%)

40(41%)

68(15%)

295(64%) previous

cc Aceptance

Food (Top 5)

Food (others)

Other retail

figure 2: Volume implications of discounters (2014)

newcc Acceptance

figure 3: Discounter effect on eC cash retail volume

kALLe dUnkeL

Senior Associate

tHomAs groHnert

Principal

LenA meyer

Associate

460

EC retail transaction volume [EUR billion]

Growth p.a. [%]

10%

5

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Sources:

GfK, Statista, Visa, Company Websites, INNOVALUE

So far, there were about 60,000 active NFC termi-

nals in Germany which accounted for about 8% of

points of acceptance. This is relatively low compared

to other countries such as the UK with 260,000

active NFC terminals

in the market. The

number of contactless

transactions in the UK

was 81 million in June

2015. Looking at the

NFC acceptance at

large German retailers

in general there were

only two among the

30 surveyed players

(Top 5 merchants, 6 verticals) which accepted NFC

payments in the beginning of this year.

Among the swell of announcements regarding

credit card acceptance multiple merchants com-

municated that they would install NFC-activated

terminals. These included MediaMarkt, Saturn and

even Aldi Nord. Furthermore both Visa and Mas-

terCard have been pushing to get their new termi-

nals sold to be NFC-activated. It stands to reason

that the other newly credit card enabled players are

at least hardware-ready for NFC. Given this we

might see yet another discounter effect – for NFC

transactions.

Conclusion

Overall, we at INNOVALUE believe that these

actions by the large retail merchants will signifi-

cantly influence the payment habits of German

consumers. Their new payment strategy might just

pave the way for Germans to leave the “Dark Ages

of Payment”.

Impact on NFC and mobile payments

Over the last years the development in mobile pay-

ments has steadily been going towards NFC

scheme based solutions. All major device/operat-

ing system manufactur-

ers (Apple, Samsung &

Google) as well as most

MNOs have based their

mobile payments solu-

tion on NFC. However, in

Germany neither NFC

nor its prerequisite

credit card acceptance

had been widely

available.

actions by large retail merchants will significantly influence

payment habits … Germany to leave the “Dark age of payment”

6

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The last 3 months up to October 13th have been a

volatile time for international equity markets. A

worldwide sell-off in mid-August led to a strong

decline in share prices and

resulted in August being the

worst month for the Dow

Jones in 5 years and the worst

month for the S&P500 since

May 2012. In Europe, the

FTSE 100 fell below the 6,000

mark for the first time since

2013 and also the German

DAX dropped below the psy-

chologically important mark

of 10,000 points. The drivers

for the recent stock market

movements are numerous and include a weaker

than expected recovery in advanced economies as

well as a further slowdown in emerging econo-

mies, especially in Latin America. In addition, the

impact of a slowing economy in China and the

pUbLic mArket VALUAtions And tHe mArket enVironment

mArkUs mAssem

Senior Associate

the majority of public companies in our payments

universe have ended up higher at the end of the three month period even though the slowdown in august has been clearly reflected in the share price movements.

uncertain timing of an interest rate rise in the U.S.

have made investors cautious. The risk of a slow-

down in Chinese growth is possibly the single

most important issue

driving investment

decisions at the

moment, keeping mar-

kets somewhat alert.

The majority of public

companies in our pay-

ments universe (see

end of article for com-

position) have ended

up higher at the end of

the three month period

(with 10 out of 18

stocks posting gains) even though the slowdown

in August has been clearly reflected in the share

price movements. A partial rebound from the

steep declines was followed by more consistent

gains in early October, in line with the wider mar-

ket. Since the beginning of the year, 13 out of the

18 stocks are still in positive territory. The overall

payment index is up by 4% over the past three

months and 16% since the beginning of the year.

The acceptance bucket gained about 6% over the

last three months, with both Vantiv and Global

Payments outperforming their comparable peers

with gains of 21% and 22% respectively. PayPoint

and Ingenico closed at the same level at the end

of the period while Verifone’s stock declined by

11% over the past three months, given gradual

The payments universe (alphabetical order):

Acceptance: Global Payments, Ingenico,

PayPoint, Vantiv, Verifone

Processing: Cielo, Euronet Worldwide, FIS, Fiserv,

Heartland Payment Systems, Total System Services

PSP/Online payments: Wirecard

Issuing/Prepaid solutions: FleetCor, Green Dot, WEX

Schemes: American Express, MasterCard, Visa

Sources: INNOVALUE research and company filings;

Google Finance for share price data

losses over the course of September. Verifone

announced a USD 200 million share repurchase

authorisation on September 28th, the first in Veri-

fone’s history, representing about 6.5% of the

company’s outstanding shares. Global Payments

continues to be the strongest performer with YTD

gains in excess of 60%. The shares jumped 11%

on October 8th on the back of strong earnings

and an increase in the outlook for the year 2016.

The month of August saw two strongly antici-

pated IPOs as both WorldPay and First Data

made their stock market debut. WorldPay was

able to pull off the largest UK IPO of the year and

was priced at 240p, in line with the most recent

price range of 235-250p. Advent International

and Bain Capital, who bought the company from

RBS five years ago received gross proceeds of

GBP 1.2 billion and will retain a 49% share in the

company post the IPO. The listing values World-

Pay at more than 16 times underlying 2014

EBITDA of GBP 375 million.

First Data ended up issuing its shares at a dis-

count to the published price range of USD 18 to

USD 20, floating the company at only USD 16 per

share. The company sold 160 million shares to

raise close to USD 2.6 billion. KKR, the company’s

private-equity owner, was not selling any stock in

the offering, and the proceeds will be used solely

to pay down some of the company’s USD 21 bil-

lion in total debt, as was stated in the IPO filing.

KKR had acquired First Data in April 2007 for

about USD 29 billion.

figure 1: Indexed stock price performance year-to-date October 13th 2015

Acceptance Processing PSP/Online payments Issuing/Prepaid Schemes S&P 500

Last 3 months135

130

125

120

115

110

105

100

95

90

85

Jan-15 Mar-15 April-15 Jun-15 Aug-15 Sep-15 Jul-15Feb-15 May-15 Jul-15

7

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The comparables within the processing bucket

gained about 11% over the last three months.

Cielo was the only underperformer over the

period, with the share price declining consistently

throughout July until early October, losing about

13%. Heartland Payment Systems and Euronet

Worldwide performed strongly, gaining more

than 20% over the period following stable

increases post the August decline.

Within the PSP and online payments category,

Wirecard AG gained 12% over the last three

months and is up by 17% since the beginning of

the year.

The comparables of the issuing / prepaid solu-

tions bucket lost about 6% over the last three

months, with all of WEX, Fleetcor and Green Dot

posting share price losses. WEX lead the losses

with 18% while Fleetcor and Green Dot lost 7%

each over the three months period.

Lastly, the trading comparables within the

schemes bucket gained a total of 2% over the last

3 months. American Express shed another 2% of

market value over the period while MasterCard

finished unchanged and Visa gained about 8%.

American Express is still down by about 18% year

to date. The company reported better than

expected second-quarter profit as it was able to

benefit from cost-savings due to job cuts. Compe-

tition for "co-brand" deals in which card issuers

team up with prominent corporate partners to sell

cards remains strong, and American Express lost

a number of lucrative co-brand contracts this year

due to the higher prices it charges compared to

rivals.

figure 3: payments universe trading multiples as of October 13th 2015

0.0x

5.04.9 3.6

7.4

13.5

21.6

10.0x

20.0x

25.0x

30.0x

35.0x

9.26.3

12.8

4.3

35.2

17.3

21.3

11.3

5.6

16.815.3

25.6

19.3

12.3

EV/REV CY 13 EV/REV CY 14 EV/EBITDA CY 13 EV/EBITDA CY 14

Acceptance Processing PSP/Online payments Issuing/Prepaid Schemes

70%

60%

50%

40%

30%

20%

10%

0%

10%12%

25%

14%

24%

29%26%

47%

61%

24%

31%29%

45%

61%

figure 2: payments universe operational metrics as of October 13th 2015

Revenue growth CY 13-14 EBITDA margin CY 13 EBITDA margin CY 14

8%

15.0x

5.0x

8

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In the third quarter of 2015, deal activity in the

international fintech industry has surged signifi-

cantly compared to the first two quarters. A total

of 46 transactions have been reported with a

total disclosed volume of USD 14.1 billion. Fur-

ther consolidations among mobile payment pro-

viders as well as (crypto-) currency markets

have been among the drivers. In addition, World-

pay went public while First Data launched its ini-

tial public offering.

M&A activity and deal characteristics

A total of 46 M&A transactions were announced

in the third quarter of 2015. One less compared to

the same period of 2014. However, it has been by

far the strongest quarter in 2015 in terms of deals

and volume. Despite the sell-off in global markets

due to concerns about China’s economy, M&A

activity has not really been affected. While the

summer months tend to be generally slower for

M&A activity, particularly August and September

have been busy months. The financial terms of 14

transactions, with a total volume of USD 14.1 bil-

lion, were disclosed. This quarter’s highlight in

terms of deal size is FIS’s acquisition of Sunguard

for USD 9.1 billion including the assumption of

USD 4.6 billion in long term debt. In June the com-

pany filed to go public. But as speculated in our

last issue the group of private-equity firms that

owned Sungard, including Bain Capital, Black-

stone and KKR & Co., preferred a clean exit before

the full IPO process would have started. SunGard

makes software for financial institutions from

which FIS expects to expand its enterprise bank-

ing and capital markets solutions portfolio. The

combined company will have more than USD 9.2

billion in annual revenue, 55,000 employees and

operate in more than 100 countries.

The median EBITDA-multiple decreased from

14.7x to 13.1x between 2014 and 2015. The median

revenue multiple increased by 36 per cent, from

2.8x to 3.8x between 2014 and 2015. TIO’s acqui-

sition of Softgate System, valued at USD 30.3

robert kAyser

Senior Associate

m&A ActiVity

28%

60%

22%

67%

9%9%2%

4%

34%

49%

22%

61%

11%2%

15%7%

Target and buyers by region

RoW Asia/Pacific Europe North America

Q3/14 Q3/15 Q3/14 Q3/15

Targets Buyers

figure 3: 2014-2015 funding comparsion

Median enterprise value multiples

Revenue Multiple EBITDA multiple

figure 2: median value, revenue, ebItDa

16x

14x

2x

2012 2013 2015Q3

9.5

14.5 14.7

3.72.8

13.112x

10x

8x

6x

4x

2014

3.8

figure 1: Value and volume comparsion

M&A Market development

Transaction volume Value USD billion

Val

ue U

SD b

illio

n

Num

bers of transactions

5

10

15

0

10

20

30

40

50

02014Q3

2014Q4

2015Q1

2015Q2

2015Q3

47

36 38 3946

1.6

14.1

2.43.6

8.1

million, equates to a multiple of 6.1x EBITDA and

0.8x revenue. The acquisition of Sungard by FIS

equates to a multiple of 13.1x EBITDA or 3.5x rev-

enue. PayPal’s acquisition of Xoom for USD 982.4

million equates to a multiple of 48.9x EBITDA or

6.2x revenue. Envestnet paid 104.3 Yodlee’s

EBITDA or 6.4x revenue in an acquisition valued

at USD 573.9 million. The enterprise/revenue

multiple for CVC Capital Partner’s acquisition of

Linxens is 6.6x. The acquisition of AppRedeem by

Perk.com for USD 2.5 million equates to a multiple

of 3.6x invested capital.

Geographically, 61 per cent of the targets were

based in North America (Q3/2014: 49%), fol-

lowed by 22 per cent in Europe (Q3/2014: 34%)

and 11 per cent in Asia/Pacific. After a strong H1 in

Europe deal activity has been more quiet in the

last three months. As a result the pendulum has

swung again in favour of the Anglo-Saxon inves-

tors (+24% YoY) and targets (+12% YoY). There

has been only one Non-European investor to the

10 European targets in this quarter, a situation

observed for the first time. Nevertheless my

hypothesis is that with the euro lower in value and

growth slowly picking up, Europe could become

again a vital target area for Asian and U.S. inves-

tors and boost cross-border activities. Looking

forward, M&A is still seen as the quickest way to

expand in what remains a low or slow-growth

environment. Furthermore, cash will likely remain

readily available and debt, while likely to get more

expensive, remains reasonably priced. Thus, in

terms of deals, 2015 has still the potential to be a

record-breaking year.

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Key drivers of and rationale for M&A activity

Deal activity in Q3 has been coined by transac-

tions in the mobile payments sphere which made

up 26% of all transactions. Especially PayPal

stands out with its two acquisitions of Xoom and

Modest in the U.S. Through the acquisition of

Xoom PayPal expands its international money

transfer business portfolio whereas the purchase

of Modest strengthens the commerce experi-

ences. After the acquisition of Paydiant in March

this year PayPal puts major efforts in mobile. This

is in dire need as for example ApplePay not only

launched successfully in the U.S. but also in the

UK and SamsungPay started with a sweeping

launch in South Korea. Alibaba continued its

astonishing growth by grabbing a 40% stake in

India’s Paytm for USD 680 million. The two com-

panies intend to build a mobile payment ecosys-

tem in the country. In addition, mobile payments

can also be of interest for established industries.

Volkswagen Financial Services, the financial sub-

sidiary of German car producer Volkswagen,

bought German sunhill technologies. The deal

gives Volkswagen access to a mobile payment

system and 2 million customers across Europe.

Consolidation among pure mobile payment apps

such as PayPal or Yapital might reach its turning

point this year. However, in countries such as Ger-

many there are already more in-app payment

solutions (e.g. myTaxi or Handyticket), then pure

payment apps. Therefore, I expect mobile pay-

ments also in the near future to be a major deal

driver.

After initial transactions last quarter, consolida-

tion among (crypto-) currency marketplaces has

gained further speed.

Dutch Coinfy which pro-

vides a mobile application

that enables buying, sell-

ing, and accepting bitcoin

payment in stores, bought

Coinzone to further

expand its European mar-

ket share. Canadian Winston Resources acquired

UK-based Crypto Next for USD 6.8 million. Finally,

Currencies Direct, a provider of foreign exchange

and international payment solutions, was pur-

chased by alternative investment managers Pal-

amon Capital and Corsair Capital.

Regarding initial public offerings (IPO) the general

market atmosphere has become increasingly

more benign. Payment processor Worldpay went

public which has been the largest floatation in the

UK in 2015 and is set to be the biggest IPO of a

private equity company in the UK ever. The listing

values Worldpay at GBP 4.8 billion (excluding net

debt of GBP 1.2 billion) or more than 16 times last

year’s underlying EBITDA. Private equity firms

Advent International and Bain Capital which

bought Worldpay for GBP 2 billion from Royal

Bank of Scotland five years ago as part of bail out

terms ordered by the European Union Bain, hit its

targeted valuation of GBP 6 billion. With the IPO

Worldpay declined a GBP 6.6 billion takeover bid

of French Ingenico which has been in official

negotiations. In

addition, German

Wirecard reportedly

has been among bid-

ders but has not

revealed this in pub-

lic. Worldpay pro-

cesses around USD

564 billion in payments each year, from about

400,000 merchants. It also handles about 40

percent of European Web transactions. Further-

more, First Data launched its IPO after filing pub-

licly in July. Former owning private-equity firm

KKR & Co. planned to seek at least USD 2.5 billion

– on a valuation of USD 20 to 25 billion. This will

likely be exceeded as the intended purchase of

160 million shares would bring more than USD

3.5 billion in one of the largest IPOs in U.S. mar-

kets this year. The proceeds raised from the issu-

ance would be used to redeem roughly USD 2.5

billion of senior unsecured notes.

Altogether 2015 might become a year of private

equity. Nearly 10% of all buyers in the third quar-

ter have been strategic investors. Most recently

Iconiq, a secretive investment company that acts

for many of the most influential executives in Sili-

con Valley, such as Facebooks’ Mark Zuckerberg

or Twitter’s Jack Dorsey, has made an investment

in Dutch payment processor Adyen. Less than a

year after raising USD 250 million at a USD 1.5

billion valuation from institutional investors

including private equity group General Atlantic

and Singapore’s Temasek, Adyen has raised funds

now at a USD 2.3 billion valuation. This makes the

company one of the most highly valued technol-

ogy start-ups in Europe. In addition CVC Capital

and Astorg Partners acquired French smart card

producer Linxens for USD 1.67 billion. The key

reason for the investments is, in particular, the

search for returns to optimize the monetisation of

portfolios which can be apparently achieved by

the high scalability of some fintech businesses.

In terms of deals, 2015 has still the potential to be

a record-breaking year

Sources: Bloomberg, Financial Times, Mergerstat,

Mergermarket, Nilson, Reuters, company publications

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stefAn tHomALLA

Associate

Funding Activity

VC funding activity kept its momentum in the third

quarter of 2015. While the nominal number of

funding rounds decreased to 117, compared to 153

in Q2 (and 113 in Q1), the overall funding volume

increased. The total (disclosed) volume amounted

to USD 3.5 billion in equity and USD 335.9 million in

debt financing in the third quarter. It is striking that

the average value per funding round increased by

about 44% to USD 32.8 million compared to the

previous quarter.

Although North America continues to lead the field

and accounts for more than half of the disclosed

funding rounds, FinTechs based in Asia were able to

gain ground. Out of the 117 funding activities 20

were in Asia, making it (by the number of funding

rounds) the biggest winner of this quarter. Europe

continues to secure the second place with a total of

27 funding rounds. Australia is ranked fourth with a

total of 4 funding rounds and is closely followed by

South America, with 3 funding activities. Not seen

on the list of the last quarter, however now present

again is Africa, where one funding activity took

place.

Investment Trends

Similar to the trend seen throughout the year, finan-

cial marketplaces was the biggest winner of ven-

ture capital funding (26 funding activities).

Financial marketplaces concerns the process of

enabling the transfer of cash flows between two

parties, with the aim to provide equity and debt

capital. In recent years, the traditional institutional

lenders have been joined by new and agile market

players. Such players connect market participants

in a peer-to-peer (P2P), business-to-customer

(B2C), customer-to-business (C2B) and business-

to-business (B2B) relationship. During the third

quarter, KrediTech closed one of the largest rounds

of the segment. The German company uses big-

data in combination

with algorithms to

evaluate credit risks

and offer competi-

tive loans. Kredi-

Tech succeeded in

two funding rounds

this quarter – first in

July, where it raised

USD 110 million and

in late September,

where another USD

92 million were raised. Another success of this

quarter was Avant, the American consumer lend-

ing company, which raised USD 325 million in Sep-

tember. With this, it continues to become one of

the largest online providers of B2C loans in the US.

Investors included JP Morgen as well as the private

equity firm General Atlantic. With this investment

JP Morgan extends its interest in Avant, following

the USD 200 million “warehouse” credit facility the

firm and Credit Suisse provided in August.

Based on the number of deals (15), Financial Ser-

vices was the 3rd largest funding segment of the

quarter. However, as 27 deals were closed in Q2,

this represents a significant decrease of 44 percent

in the segment. Even more remarkable is the reduc-

tion in terms of funding volume. In Q2 a volume of

around USD 591 million was raised (USD 345 mil-

lion Q1), in Q3 funding’s with a total volume of only

USD 219 million (minus 63 percent) were closed.

This trend was caused in particular by low North

American funding activity, with only 6 Financial

Services venture rounds during this quarter (17 in

Q2). Contrary to this is the Asian market, where

twice as many deals were conducted in Q3 (4)

compared with 2 in Q2. This pattern is in line with

the overall market trend for Asia. Therefore it is not

surprising that the largest deal in the segment was

also raised in Asia. India based BankBazaar, which

provides instant customized rate quotes on loans

and insurance products, received the segment’s

largest venture round of USD 60 million from Ama-

zon, Fidelity Growth Partners India, Mousse Part-

ners, Sequoia Capital and Walden International.

Other Financial Services deals focused on compa-

nies offering integrated financial management plat-

forms (e.g. payable), cloud based services and

solutions that enable customers to manage both

expenses and savings (e.g. Cloudability). It remains

to be seen if the shift in funding activities will con-

tinue in the next

quarter(s) for the

Financial Services

segment.

A segment attracting

interest of venture cap-

italists as well as large

investment banks are

Virtual / Crypto Cur-

rencies and the under-

lying blockchain

technology. While the

blockchain is the backbone of crypto currencies like

Bitcoin, its potential applications range from smart

contracts to P2P data storage. The use of a distrib-

uted ledger, a protocol adding a new “block” with

each transaction, makes the blockchain identifiable

and verifiable to the entire network. In the third

quarter, a total of 11 fundings with a total volume of

USD 72.8 million occurred. Of these transactions,

several were targeting ventures researching the

blockchain technology in applications aside from

crypto currencies. Targets included among others

PeerNova, a Californian based company, offering a

blockchain based data storing solution. The com-

pany raised USD 6 million from an undisclosed

investor. The segment’s largest venture capital was

raised by Chain (USD 30 million) from well-known

companies including Visa, NASDAQ, Citi, Capital-

One, Fiserv and Orange.

VentUre cApitAL

a segment attracting interest of venture capitalists as well as

large investment banks are Virtual / Crypto Currencies and the underlying blockchain technology.

pHiLipp steinbrück

Associate

funding Activity by region

north america 61

europe 27

asia 20

Oceania 1

africa 1

australia 4

south america 3

total 117

funding Activity by segment

Financial marketplace 26

Financial services 15

Online payments 8

mobile payments / mCommerce 16

Virtual / Crypto Currency 11

Others 41

total 117

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Chain develops network solutions based on the

blockchain technology, aiming to change the acces-

sibility of information and the transfer of assets.

Though the third quarter showed a decrease in

funding activity within this segment, we believe

that the increasing interest by institutional inves-

tors and initiatives by large banks will fuel invest-

ments in blockchain related ventures in the

upcoming quarters.

Conclusion

This quarter is another indicator of the growing

interest in FinTech ventures. While the nominal

number of funding rounds showed a decrease com-

pared to the previous quarter, the overall average

capital raised increased substantially. We believe

that this trend will continue in the upcoming quar-

ters as ventures seem to grow and are aiming for

higher capital fundings.

It will be interesting to see whether a shift in the

funding concentration by segment will take place.

The Financial Marketplaces segment, typically the

segment with the highest number of funding

rounds in 2015, showed a big dive compared to the

previous quarter. Competition within this segment

seems to accelerate, potentially causing smaller

players to be pushed out of the market

or be unsuccessful in raising funds from venture

capitalists. We expect this to continue and poten-

tially intensify further.

In our view, ventures related to the blockchain tech-

nology are going to be of increasing interest during

the upcoming quarters. We believe that funding will

further shift from Bitcoin to the underlying block-

chain technology.

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deAL ActiVity m&AQ3 2015

Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

1 01/07/15 Linxens France Manufactures smart card connectors CVC Capital Partners UK 1,665

2 02/07/15 Xoom USA Provides online money transfer services internationally PayPal USA 982.4

3 02/07/15 iSend USA Provides international electronic payment Ding Ireland N/D

4 06/07/15 Columbus Data Services USA Processes automated teller machines Cardtronics USA 80

5 06/07/15 XE.com Canada Provides Internet foreign exchange tools and services for corporate clients

Euronet USA 40

6 14/07/15 Talio Labs USA Develops mobile messaging application Remitly USA N/D

7 14/07/15 Softgate Systems USA Provides independent neighborhood-based payment center operation services

TIO USA 30.3

8 15/07/15 TransGlobal Payment Solutions UK Provides collaborative payment and collection solutions Equiniti UK N/D

9 15/07/15 Transaction Wireless USA Provides wireless payment solutions First Data USA N/D

10 21/07/15 NettCash Zimbabwe Provides financial investments services Mozido USA N/D

11 23/07/15 American Credit Card Processing USA Provides electronic payment processing services Priority Payment Systems USA N/D

12 27/07/15 Premier Payments USA Provides credit and debit card payment processing services Newtek Business Services USA 16.5

13 05/08/15 YTS Solutions India Provides mobile payment solutions to individuals, operators and financial institutions

Bharti Airtel India N/D

14 06/08/15 Financial Tech USA Provides API banking services Silicon Valley Bank USA N/D

15 11/08/15 Yodlee USA Provides digital banking, financial data and account aggregation services

Envestnet USA 573.8

16 11/08/15 Currencies Direct UK Provides foreign exchange and international payment solutions to private and corporate clients.

Palamon Capital + Corsair Capital UK 310.9

17 11/08/15 CoinRepublic Singapore Operates an digital currency brokerage platform meXBT Mexico N/D

18 12/08/15 SunGuard USA Provides software and technology services Fidelity National Information Services

USA 9,749

19 12/08/15 CT-Payment Canada Provides comprehensive point-of-sale services to financial institutions and merchants for debit and credit card authorization and settlements

Smart Card Marketing Systems USA N/D

20 13/08/15 Coinzone Nether- lands

Provides online payment services Coinify Netherlands N/D

21 14/08/15 Mobileview Italia Italy Provides mobile payment solutions BOKU USA N/D

22 19/08/15 Modest USA Operates as mobile commerce platform PayPal USA N/D

23 21/08/15 Tastebud Technologies USA Develops mobile loyalty applications Raise Marketplace USA N/D

24 27/08/15 FutureAdvisor USA Provides investment advice BlackRock USA N/D

25 01/09/15 Banco Nacional De Mexico SA (Merchant Acquiring Business)

Mexico Engages in merchant acquiring business EVO Payments International USA N/D

26 01/09/15 FX Mart India Provides electronic payments services Flipkart India 6.8

27 02/09/15 Boku (Pay By Call Business) USA Provides call payment services DaoPay Austria N/D

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Date Announced

Target Company Country TC Industry Buyer(s) (Country) Country Transaction value (USDm)

28 03/09/15 Wipit USA Provides financial services solutions for the unbanked and under banked consumer

Urban FT USA N/D

29 04/09/15 Cash Bases Group UK Designs and manufactures cash management equipment APG Cash Drawer USA N/D

30 04/09/15 iPay88 Malaysia Provides online payment gateway services and solutions NTT DATA Japan N/D

31 07/09/15 Qustomer Belgium Provides digital loyalty solutions ING Nether lands N/D

32 09/09/15 Aurora Financial Systems USA Operates as payment processor and program manager Finicity USA N/D

33 11/09/15 Crypto Next UK Offers white label crypto currency exchange services Winston Resources Canada 6.8

34 14/09/15 Terrapin Financial Services USA Provides merchant processing services BluePay USA N/D

35 15/09/15 Toyota (Co-brand US Credit Card Portfolio)

USA Provides payment services Alliance Data Systems Corporation USA N/D

36 15/09/15 Catalyst Business Development USA Provides payment gateway services, sales and software solutions

Spindle USA N/D

37 16/09/15 sunhill technologies Germany Provides mobile payment systems Volkswagen Financial Services Germany N/D

38 16/09/15 Beanstream Internet Commerce Canada Provides payment, risk management and authentication services

Bambora Sweden N/D

39 18/09/15 Spree Commerce USA Provides an open-source ecommerce platform for stores First Data USA N/D

40 21/09/15 Ambur POS USA Provides iPad and iPhone point of sale system for more than 1,500 restaurants

ShopKeep.com USA N/D

41 21/09/15 AppRedeem USA Provides an advertising platform for mobile application discovery, branding, and monetization

Perk.com USA 2.5

42 22/09/15 Cover USA Provides mobile dining application for payment of bills Velocity USA N/D

43 23/09/15 GRG International (Australian ATM Business)

Australia Operates automated teller machines DC Payments Australasia Canada 1.5

44 23/09/15 B+S Card Service Germany Provides electronic payment solutions Deutscher Sparkassen Verlag Germany N/D

45 24/09/15 Sightline Payments (ATM and Cash Business)

USA Provides payment solutions for gaming companies NRT Technologies USA N/D

46 29/09/15 Paytm (20% stake) Asia Provides mobile payment solutions Alibaba China 680

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Target (Country) Round Volume (USDm)

Investor(s) Funding (USDm)

Description

1 GFG Group (NZ) Venture 167.00 N/D 180.00 GFG Group provides consumer electronic payment software solutions to banks, mobile network operators, and third party processors.

2 LoanSolutions (PH) Seed N/D John Dang, Kickstart Ventures, KK Fund N/D Loan Solutions is the largest platform in the Philippines that connects borrowers and lending partners online.

3 BankBazaar (IN) C 60.00 Amazon, Fidelity Growth Partners India, Mousse Partners, Sequoia Capital, Walden International

79.00 Chennai based BankBazaar is a neutral online marketplace that gives instant customized rate quotes on loans and insurance products comparing products of India's leading financial institutions.

4 Pret d’Union (FR) D 34.00 Eurazeo, Pierre Kosciusko-Morizet 52.40 Pret d’Union provides an online platform to facilitate financial transactions between individual lenders and borrowers.

5 Payever (DE) Seed 0.55 High-Tech Gruenderfonds 0.81 Combnies different payment and shop application in one register card on a mobile device.

6 Ant Financial (CN) A N/D National Social Security Fund (NSSF) N/D Ant Financial is an online payment services provider that enables individuals and businesses to execute payments online in a secure manner.

7 InvoiNet (AR) N/D 4.00 IFC N/D InvoiNet makes electronic invoices available for financing within an online marketplace.

8 FAMOCO (FR) Venture 4.40 Aurinvest, Bpifrance, Hi Inov 5.40 FAMOCO is creating android-based NFC reading devices.

9 LSQ Funding Group (US) Private Equity

40.00 Ares Capital Corporation 140.00 LSQ Funding provides specialized accounts receivable financing to growing companies.

10 SlimPay (FR) B 16.60 Prime Ventures (Lead) 16.60 Payment gateway for SEPA Direct Debit and more.

11 Nearex (SG) B N/D Beenos Partners, Tata Capital, Xinvesco N/D Nearex offers a proximity transactions system (devices for merchants and contactless cards for customers).

12 IndiaLends (IN) Venture N/D DSG Consumer Partners (Lead), Siddharth Parekh N/D IndiaLends is a digital lending and borrowing marketplace.

13 Lendingkart (IN) A 10.00 Ashvin Chadha, Mayfield Fund, Saama Capital, Shailesh Mehta

10.00 Lendingkart is an online financing company dedicated to help entrepreneurs and small businesses with Working Capital Loans.

14 Karmic Labs (US) A 5.00 Greycroft Partners (Lead), Marketplace Fund I, LP 7.70 Karmic Labs offers a budget and cash flow planning tool for managers that allows their employees to request specific amounts of cash for specific events.

15 Toast (SG) Seed 0.75 Startupbootcamp N/D Toast is an online and iOS money transfer app that allows users to send money instantly without using the current legacy banking network SWIFT.

16 Fundible (UK) N/D 0.11 Wales Technology Seed Fund N/D Fundible offers a platform on which customers can club together to collectively buy a product or service.

17 BitFury Group (US) C 20.00 DRW Trading Group, Georgian Co-Investment Fund, iTech Capital

60.00 BitFury is the leading, fully integrated Bitcoin Blockchain security and infrastructure provider.

18 KrediTech (DE) C 110.00 Peter Thiel, N/D 158.00 Kreditech loans money to customers with little or no credit rating.

19 Self Lender (US) Seed 1.50 Silverton Partners 2.00 Self Lender offers a consumer finance service to help underserved people to build up credit history.

20 Airbitz (US) Seed 0.45 Damian Cutillo, Paul Puey, Rick Henri Chan, Tim Horton, William Swanson

0.45 Airbitz offers a Mobile Bitcoin wallet.

21 ClassWallet (US) Seed 1.90 Accelerated Growth Partners, Kaplan Ventures, MaverixLab, NewSchools Venture Fund, William Guttman

3.10 ClassWallet is a virtual wallet for schools that replaces cash, checks and interoffice envelopes. Through ClassWallet, administration, parents and vendors connect with teachers for peer-to-peer funding.

22 Fenergo (UK) Private Equity

75.00 Insight Venture Partners 75.00 Fenergo offer Client LifeCycle management software to private banks, spanning the front and back office functions. Covers KYC, CDD, AML, UDSI, MiFID II, FATCA, Dodd-Frank.

23 Fastacash (SG) B 15.00 Rsing Dragon Singapore, Life.SREDA, UVM 2 Venture Investments

23.50 Fastacash allows users to send "value" in the form of money, airtime etc as well as digital content such as pictures and videos through social networks and messaging platforms.

24 GiftStarter (US) Seed 0.13 500 Startups 0.16 GiftStarter is an application offering Gift partial payments.

25 Fastacash (SG) B 15.00 Rising Dragon Singapore, Life.SREDA, UVM 2 Venture Investment

23.50 Fastacash allows users to send "value" in the form of money, airtime etc as well as digital content such as pictures and videos through social networks and messaging platforms.

26 Credit Benchmark (UK) B 20.00 Balderton Capital, Index Ventures 27.00 Operate a unique model for credit risk data, aggregating anonymized credit risk estimates from leading banks and financial institutions.

27 Malauzai Software (US) Venture 11.00 N/D 24.10 Created mobile banking SmartApps to serve community banks and credit unions.

VentUre cApitAL ActiVity & compAny profiLes Q3 2015

15

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Description

28 Estimize (US) B 3.60 WorldQuant, Bob Greene, Briam Finn, Euromoney Institutional Investor, Frank V. Sica, Jarrod Yuster, Peter Nesvold, Ross Garon

6.20 Financial platform which facilitates the estimation of fundamentals for independent analysts.

29 Ethoca (CA) Private Equity

45.00 Spectrum Equity 45.00 Ethoca offers a solution to Fraud by providing a platform to bring together Card Issuers and Merchants. If Card Issuer notices committed fraud then the Merchant is made aware through the Fenergo platform.

30 Upstart (US) C 35.00 Third Party Ventures, Collaborative Fund, First Round, Khosla Ventures

53.20 Upstart is a lending platform, lending money to people based on their Education and Experience as opposed to their credit score. Upstart offers 3 year fixed rate loans.

31 FlyPay (UK) A 10.70 Time Out 12.40 Allows restaurant customers to check, split and pay the bill on their mobile devices.

32 Linqpays Limited (MT) Seed N/D N/D N/D Linqpays offers ist clients Finance management support.

33 ShoCard (US) Seed 1.50 AME Cloud Ventures, Digitsl Currency Group, Enspire Capital, Morado Venture Partners

1.50 Digital identity enabled by the blockchain.

34 Privitar (UK) Seed 1.20 David Cleevely, David Gammon, Gerard Buggy, Sir Peter, Tom Glocer

1.20 Enables organisations to extract value from sensitive data sets while complying with regulation and protecting client privacy.

35 Revolut (UK) Seed 1.50 Balderton Capital, Seedcamp 2.00 Revolut is a card and App which allows customers to pay for items all around the world with zero fees. It transfers the currency automatically into the local currency of the country the customer is in. The card is part of the MasterCard scheme.

36 Innovati (IN) Venture 5.00 Catamaran Ventures 6.60 Solutions for improving operational efficiency and enhancing customer experience in every payment transaction.

37 CircleBack Lending (US) A 17.50 N/D 22.20 Internet-based consumer lending platform with two aims: provide prime and super-prime consumers in the Unite States a fast and efficient way to borrow money at attractive rates and institutional investors a robust platform to invest in these loans.

38 Bitx (NG) A 4.00 "Digital Currency Group PayU"

4.80 Allows acceptance of Bitcoin by merchants and provides Fis with institutional storage and liquidity tool and access to advance crypto-fiat transfer protocols and customised solutions.

39 Mint Payments (AU) N/D 2.94 Vix Investments N/D Omni-channel payments processing solution provider. Focus areas are: Customer Present (CP) payments via mobile devices such as smartphone or tablets, leveraging innovative Bluetooth NFC card readers. Customer Not Present (CNP) payments via the internet such as e-commerce, MOTO, recurring or bill payments.

40 Factom (US) A 1.00 N/D 1.10 Factom has developed the Blockchain software to simplify records management, record business processes and address security and compliance issues.

41 Money Mover (UK) N/D 1.00 N/D 2.00 International payment enabler and currency exchange platform for SMEs.

42 Mswipe Technologies (IN) C 25.00 Axis Bank, DSG Comnsumer Partners, Falcon Edge Capital, Matrix Partners India, Meru Capital, Olacabs

25.00 mPos solution that links to an bank account and runs on any mobile device.

43 DealStruck (US) Debt 10.00 Community Investment Management (CIM) 9.50 Lending marketplace connecting profitable, small- and medium-sized businesses with individual and institutional accredited investors.

44 Bankers Toolbox (US) N/D N/D Accel-KKR N/D Banker's Toolbox helps community banks with software based solutions to prevent money laundering as well as fraud and kite prevention.

45 China Rapid Finance (CN) C 35.00 Broadline Capital 56.00 Consumer credit access to Chinese consumers. Omni-channel borrower acquisition system and proprietary Big Data Analytics.

46 Buyatab (CA) Seed N/D N/D N/D eGift Card Solutions offered to merchants with mobile integration. Customers can purchase, send and redeem eGift Cards from their mobile device through text, email or social media.

47 Cognia (UK) Venture N/D Oxford Capital Partners, Swisscom, Vodaphone 4.60 Cognia has a cloud-based PCI compliance payment processing solutions and reduce PCI compliance requirements by 90%.

48 Shopkeep (US) D 60.00 Activant Capital 97.20 Cloud-based Point of Sale for restaurants and retail stores which also allows for reporting, analytics and customer marketing. Also allows inventory management.

49 OneVest (US) A 2.00 N/D 5.30 OneVest aims to connect early stage tech companies with accredited investors. OneVest has over 80,000 entrepreneurs and 15,000 investors registered.

50 Stripe (US) D N/D American Express, Visa, Sequoia Capital, Kleiner Perkins Caufield & Byers

190.00 Stripe offers online merchants the ability to accept and manage payments.

51 iwoca (UK) B 20.00 Acton Capital Investors, CommerzVentures Global, Redline Capital Management

31.50 Lending facility for SME's to access funding similar to larger companies helping them to place large stock orders and bridging cash flow gaps.

52 Seedrs (UK) Equity Crowd-funding

2.50 N/D 22.80 Seedrs offers investors to invest as little as USD 10 per transaction into startups looking to raise capital. The company completes the most deals in Europe.

53 Crowdcube (UK) C 6.00 Balderton Capital, Draper Esprit, Numis, Tim Draper 15.90 Crowdcube enables investors to invest or loan to small companies in return for equity or an annual return. Platform for startups and investors to meet on the platform.

54 Cryptocurrency Research Group (US)

Grant 3.00 National Science Foundation 3.00 The firm is a cross-discipline research firm which focuses on studying cryptocurrencies and other decentralised consensus tech.

55 BankFacil (BR) A 3.00 Accion Frontier, Redpoint eventures 4.40 BankFacil uses Financial Education as a tool to understand what type of loans are required by consumers and uses Real Estate and Autos as collateral.

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Description

56 Beat the Q (AU) A 5.00 Reinventure 5.00 Beat the Q allows customers to order on route to the merchant, thereby skipping the Queue as your order will be ready. Merchants take payments online.

57 GREX (IN) A 0.63 Chandru Badrinarayan, Kunal Bajaj 0.63 Grex offers a platform on which high-growth start ups with good upside opportunities are posted for other investment professionals to potentially invest in.

58 SavingsGlobal (DE) B 21.80 Index Ventures, Ribbit Capital, Tom Stafford, Yuri Milner

32.00 SavingsGlobal and its German brand WeltSparen provide on online infrastructure for savers to find best Deposit rates from International Banks.

59 CashStar (US) D 15.00 FTV Capital, Intel Capital, Mosaik Partners, North Hill Ventures, Passport Capital

43.00 CashStar offers personalised gift cards which can be sent instantly, with omni-channel capabilities. Allows merchants to combine gift cards with marketing and reward programmes.

60 Ezetap (IN) C 23.50 Bergruen Holdings, Capricorn Investment Group, Helion Venture Partners, Horizons Ventures, The Social+Capital Partnership

35.00 Ezetap make a device which can be connected to your smart phone to enable card payments. Business is developed in India.

61 Payable (US) Seed 2.10 Freestyle Capital, Haystack, Lerer Hippeau Ventures, Moment Ventures, Redpoint Ventures, Rick Marini, Rothenberg Ventures, Y Combinator

2.10 Payable offers contractors the ability to manage and analyse payments as well as having Onboarding, Work-Tracking analytics.

62 Mogl (US) Venture 7.90 Aequitas Capital, Avalon Ventures, Correlation Ventures, Monroe Capital, Moore Venture Partners, Sigma Partners

45.20 Reward App which gives user 10% cash back if they pay by Credit Card or Debit Card. The user will receive a link which offers them the chance to donatethat cashback to the homeless.

63 Prodigy Finance (UK) Venture 12.50 Balderton Capital, Ed Wray 12.50 Loans offered to students who wish to join Business School. Company has a 99% repayment rate after having loaned out USD 75 million to students.

64 Cloudability (US) B 6.00 N/D 15.80 Financial Management tool which enables businesses to track all cloud based expenses and analyse them to gain data to mentor spending.

65 bitFlyer (JP) Venture 4.00 Mitsubishi UFJ Capital Mitsui Sumitomo Insurance Company Venture Labo

6.90 bitFlyer is a trading platform for the virtual currency Bitcoin with either a private or corporate account.

66 ToneTag (IN) N/D 1.00 Reliance Capital N/D ToneTag develops a Software, that enables the interaction between a merchant's and customer's device via sound waves and NFC technology without the need of a specific hardware.

67 Vendorin (US) N/D 0.89 N/D 4.90 Vendorin runs a platform for business owners, through which B2B transactions can be made electronically instead of being handled via checks.

68 Digital Retail Apps (US) Seed 0.76 Texas Ventures 0.76 Digital Retailer Apps offers an mobile application, which allows the client to scan and pay for items without the assistance of a sales person. Simultaneously, staff can accept payments via the mobile applications when serving a client but not using a traditional POS device.

69 Xfers (SG) N/D 0.12 N/D N/D Xfers offers merchants a platform to connect their online bank account with that of their clients and collect and track payments.

70 GuiaBolso (BR) B 7.00 Ribbit Capital (Lead); e.Bricks Ventures; Ed Baker; Kaszek Ventures; Mark Goines; Omidyar Network; Peter Kellner; QED Investors; Valor Capital Group

7.00 GuiaBolso offers its clients a platform to better manage their money by helping in financial-decision making and automates the process of improving and categorizing transactions from users' bank accounts and credit cards.

71 nVoicePay (US) Debt 1.80 N/D 10.30 nVoircePay manages the invoices for the client and coordinates the best payment method, time of money transfer and thereby reduces the transaction costs while increasing efficiency.

72 Tesorio (US) N/D 0.12 Y Combinator 0.12 Tesorio operates a platform through which it is matching vendors and buyers and uses an algorithm to calculate the financial rates, that appeal to both. Hereby it is optimizing the working capital demand of its clients.

73 iZettle (SE) D 67.00 Intel Capital (Lead); Zouk Capital LLP (Lead); 83North; Creandum; Dawn Capital; Index Ventures Northzone; Santander Innoventures

175.80 iZettle provides POS solutions such as card readers for iPhones or tablet.

74 PaidEasy (US) Seed 2.00 Ivor Ichikowitz 2.00 PaidEasy is a mobile application through which its users connects with a merchants and can add purchases to her shopping cart which than can be clear through the application.

75 Payoneer (US) E 50.00 Carmel Ventures, Greylock Partners, Nyca Partners, Ping An, Susquehanna Growth Equity, Wellington Management

90.00 Payment Solutions which allows firms to receive, withdraw and send payments globally. Customers include Google and Airbnb.

76 Tyfone (US) C 6.60 CIA, David Petraeus, In-Q-Tel 11.90 Patented, neutral and comprehensive memory card-based payments solution for mobile contactless payments. Services include Mobile Banking, Mobile Identity Management, Mobile Remote Payments, Mobile Retail Services and Mobile Contactless Payments.

77 Avalon Solutions (US) N/D 2.00 Privat Investor 5.00 Avalon Solutions is engaged in the development of Software as a Service (SAAS) applications, to provide its clients (small-to-medium businesses) with payment process solutions such as mPOS.

78 MarketInvoice (UK) Venture 10.00 Paul Forster, VC Northzone 20.40 MarketInvoice pre-finances invoices for family businesses, high net worth individuals and corporates.

79 CaptialMatch (SG) A 0.70 CE Tech Invest Crystal Horse Investments Innosight Ventures"

0.70 CapitalMatch offers short term loans to SMEs and investment opportunities to private people.

80 Drip Capiral (US) N/D 0.12 Y Combinator 0.12 Drip Capital is offering SMEs short term credits.

81 SericaPay (US) N/D 0.12 Y Combinator 0.12 An platform through which merchants can accept and customers make payments.

82 Revel Systems (US) C 13.50 ROTH Capital Partners 128.50 Revel Systems provides an iPad point of sale solution that is mobile, cloud-based, and secure. This state of the art system offers an open API with third party integration, detailed and extensive real-time reporting, and is the only POS solution to offer True Offline Mode. Revel Systems exceeds standards set for PCI compliance, and offers the security of the cloud to allow an owner to conduct his or her business from anywhere.

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83 Grouplend (CA) A 10.20 Lance Tracey (Lead) Markus Frind"

10.20 Grouplend offers its clients loans that can be set up via their website. A credit rating and payment schedule is setup via the website and offers consumers a convenient way to get a loan.

84 SoFi (US) N/D 1,000.00 N/D 1,750.00 SoFi is a P2P lending platform for private loans (focusing on educational loans) that combines reduced rate student loans and career advice.

85 Avant (US) Debt 325.00 Jefferies & Company JP Morgan // KKR & Victoria Parc Capital

1,730.00 AvantCredit operates a web based consumer-lending business for short term loans of up to USD 20k.

86 Dianrong (CH) C 207.00 China Fintech Fund Standard Chartered Bank

219.00 Shanghai based Dianrong offers a P2P lending platform.

87 XENDIT (US) N/D 0.12 Y Combinator 0.12 XENDIT is a mobile wallet through which customers can transfer money to merchants and friends.

88 Moneytis (FR) Seed N/D N/D N/D The firm enables its clients to transfer money to an receiver in an other currency.

89 Able Lending (US) B 6.00 Blumberg Capital (Lead); RPM Ventures (Lead) Expansion Venture Capital; Peterson Partners; SierraMaya360

12.50 Able is a lender for SMEs, offering loans for a period over the term of 1-5 years and additionally supports the new ventures with advice on marketing and growth strategy. A normal Able loan consists out of 25% raised through F&F and 75% added through Able.

90 Nok Nok Labs (US) C 16.30 DaouKiwoom Group; DOCOMO Capital; Thundersoft; DCM Ventures; Lenovo Group; ONSET Ventures; Raven Ventures

47.80 Nok Nok Labs offers a user verification solution that allows for an identification to any application by using the existing security capacities of their respective device.

91 Magiccube (US) Seed 2.20 Azure Capital Partners; EPIC Ventures; Bialla Venture Partners; Visa

2.20 The firm has developed a software-only technology that aims to stops digital-transaction fraud at the endpoint of a transaction.

92 XENDIT (US) N/D 0.29 Y Combinator 0.41 XENDIT is a mobile wallet through which customers can transfer money to merchants and friends.

93 Remitly (US) C 12.00 N/D 34.50 Remitly offers expatriates a money transfer services from a mobile phone in the US to a mobile phone in a country abroad.

94 InVenture (US) A 10.00 Collaborative Fund (Lead); Google Ventures Lowercase Capital; Mesa Ventures

11.20 Allows clients to get a loan via its mobile phone instead of going to a broker or bank.

95 Electronic Payments (US) 1 Round 5.00 Super G Funding 5.00 The company has a Station-, Mini- (tablet) and Mobile- device, through which payments can be accepted. In addition, the product supports the merchant with additional business information such as inventory levels etc.

96 Paymium (FRA) N/D 1.10 Galitt; Kima Ventures; Newfund 1.10 Paymium is a marketplace for Bitcoin which is tries to secure compliance standards by working with an approved payment institution.

97 Prospa (AU) B 60.00 AirTree Ventures; Carlyle Group; Entree Capital; Ironbridge Capital

60.00 Prospa offers short term loans to Australia located SMEs for the period of 3 to 12 month.

98 CommonBond (US) B 35.00 August Capital (Lead), Existing Investors, Nyca Partners, The Social+Capital Partnership, Tom Glocer, Tom Kalaris, Tribeca Venture Partners, Victory Park Capital, Vikram Pandit

195.70 CommonBond offers a higher education loan to students at a lower rate, however allowing investors to receive a sustainable return.

99 ShapeShift (CH) Seed 1.60 Digital Currency Group (Lead); Bruce Fenton; Michael Terpin; Roger Ver; Trevor Koverko

2.40 ShapeShift provides a bitcoin and other virtual currencies exchange.

100 Shift (US) N/D 50.00 N/D 50.00 Shift is an Mobile application similar to a mobile wallet (regardless of currency) that is connected with a Visa card, allowing the client to control money and to make mobile and card transactions.

101 Kash (US) Seed N/D Structure Capital, Draper Associates, Green Visor Capital

2.00 Kash is a provider of a direct bank mobile payment app that is also rewarding consumers purchases with deals or free gifts.

102 Chain (US) B 30.00 Capital One; Citi Ventures; Fiserv; Nasdaq; Orange; Visa 43.70 Chain provides an easy access API to the Bitcoin blockchain that allows developers to simply integrate Bitcoin protocol.

103 Abra (US) A 12.00 Arbor Ventures; Carthona Capital; First Round; RRE Ventures

14.00 Abra is an mobile application through which customers can upload money, transfer it to friends and merchants and withdraw money at Abra tellers (shops) globally.

104 Case Wallet (US) N/D 1.00 Future Perfect Ventures 3.15 Case Wallet is a potable device (size of a credit card) which allows the customer to pay with bitcoin by scanning a barcode and verifying ones identity via a fingerprint.

105 LightSpeed (CA) C 61.00 Caisse de Depot et Placement du Quebec (Lead); Investissement Quebec (Lead); Accel; iNovia Capital;

126.00 POS software developer LightSpeed develops a mobile payments service.

106 Fundera (US) B 11.50 Susquehanna Growth Equity (Lead); Aaron Levie; BoxGroup; David Rosenblatt; First Round; Khosla Ventures; QED Investors; Scott Belsky

14.90 Fundera is an online market place that helps SMEs to facilitate funding through alternative lending.

107 Satispay (IT) A 3.50 N/D 11.20 Satispay is a payment network that can be used for micro payments, P2P money transfer, in-store and online purchases.

108 PaySur (MEX) Seed 0.25 N/D 0.28 Allows clients to register at the platform and transfer money to other users or businesses via registered credit- or debit cards.

109 PeerNova (US) N/D 6.00 N/D 19.00 The firm offers a platform through which data's validity is secured based on the blockchain principle.

110 KrediTech (DE) C 92.00 J.C. Flowers & Co., Amadeus Capital Partners, Värde Partners, HPE Growth Capital, Blumberg Capital, Peter Thiel

355.00 German based Kreditech applies Big Data technologies on credit decisions to give out short term microloans globally.

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111 Paytm (IN) N/D 675.00 ANT Financial, Alibaba Capital Partners 875.00 India based Paytm is a provider of a mobile commerce platform, including a mobile wallet.

112 Pushpay (NZ) N/D 18.70 Pie Funds Management 22.60 New Zealand based Pushpay provides a mobile payment app, which can be used at any registered merchant throughout the United States, Australia or New Zealand.

113 Ellevest (US) A 10.00 Morningstar, Mohamed El-Erian, Contour Venture Partners, Andrea Jung, Ajay Banga

10.00 US based Ellevest offers an investment platform for women.

114 Credible (US) A 10.00 Soul Htite, Carthona Capital, Ron Suber, Scott Langmack

12.70 Credible offers an online lending platform, which is dedicated to students to get access to loans as well helping them to refinance their loans afterwards by calculating an individual saving plan.

115 Qualpay (US) A 8.00 N/D 8.00 US based Qualpay is a provider of a multichannel acquiring and payment processing platform.

116 Safe Cash Payment Technologies (US)

Seed 1.12 Bialla Ventures, Naveen Jain, Vuk Bulajic, Vinh Vo, Chris Kitze.

N/D Safe Cash offers a crypto currency payment system allowing cash to be used as a digital asset, with member banks storing U.S. dollars and providing tokens which are redeemable for cash.

117 Adyen (NL) Venture N/D Iconiq Capital N/D Adyen is a payment service provider specialised in multi channel web-based payment processing for merchants - via web shops, at the POS as well as mobile applications.

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