Dear Clients and Friends,
Our latest Fintech m&a report can be found below. It highlights m&a trends and transactions in the seven segments of the Fintech world that we follow, and sometimes lead. Please see below for our December Fintech Market Update.
As 2017 comes to a close it is sometimes useful to reflect on the many evolutionary – and sometimes revolutionary – changes going on in the Fintech world. Clearly, there is a land rush going on for mind and market share. It’s everywhere – in sectors such as wealth management, insurance, commercial banking, business and retail lending, capital markets, investment banking, digital cash management, cybersecurity, CRM and of course, payments. Blockchain is everywhere. Crypto currencies are all the rage.
Over the course of the past 15 years, Marlin & Associates has become one of the most active investment banking and strategic advisory firms by providing diligent, disciplined, unbiased counsel to worldwide buyers and sellers of middle-market Fintech firms.
We were pleased this year to have again advised a wide range of interesting firms on important Fintech transactions. We advised PE firms such as ABRY Partners (on its sale of Quo Vadis (cybersecurity) to WISeKey) and we advised strategics such as TMX (on its sale of Atrium Networks (connectivity) to ICE – owner of the NY Stock Exchange). We advised a host of entrepreneurial firms on sales (e.g. the sale of Options City to Vela Trading Technologies (capital markets tech), and the sale of Advise Technologies to Compliance Solutions Strategies (Wealth Management and GRC). We advised on several capital raises (e.g., the $300 million refinancing of a credit facility for Think Finance (a “Lending-as-a-Service” company); the strategic investment into Open Gamma with participation from JPX – the Japanese stock exchange; and the recent $34 million growth equity investment into SaaS-based Tier1CRM by Wavecrest, Salesforce Ventures and Mass Mutual Ventures). We’ve been busy.
There are a lot of reasons for all this activity in Fintech. The market is large, growing, and changing fast – and the technology used by many incumbents is ripe for replacement by newer approaches that make effective use of SaaS, PaaS, Cloud, Digital Ledger Technology, Big Data, and AI. There are new approaches such as crowd funding, social finance, and ICOs. There are crypto currencies and other block chain enabled capabilities. There are AML, KYC and other regulatory and compliance pressures as a result of Basel III, MiFID III, Solvency II, Dodd Frank, Sarbanes Oxley, IFRS and more. And it helps that the millennial generation is receptive to new ideas – and that non-traditional players that understand them have entered the market – firms like Amazon, Apple, Facebook, Google, IBM, Microsoft, Oracle, Salesforce, TCS, and even Walmart.
As you will see in the report found below, m&a values for fast-growing mid-market companies that serve this world continue to rise. Some of the more interesting transactions this month include:
- TransferWise (London, United Kingdom) raised $280mm in a series E funding round led by new investors Institutional Venture Partners and Old Mutual Global Investors,
- Radius Payment Solutions (Crewe, United Kingdom) raised £150mm (~$200mm) in an equity funding round led by new investor Inflexion Private Equity Partners,
- Euronext (ENXTPA:ENX) acquired the Irish Stock Exchange for €137mm (~$162mm), valuing the company at an implied 4.7x LTM revenue and 14.3x LTM EBITDA,
- Monzo (London, United Kingdom) raised £71mm (~$93mm) in a round of funding led by new investor Goodwater Capital, and included new investors Stripe and Michael Moritz (through charitable investment vehicles), and existing investors Passion Capital, Thrive Capital, and Orange Digital Ventures.
As we have said throughout the past 15 years, we enjoy working with the Fintech firms that are fomenting this revolution. It’s fun; and its game changing. We look forward to working with you in the New Year.