Dear Clients and Friends,
The report found below sets out recent m&a values and trends in the six segments of the Fintech world that we follow and sometimes lead. It also begins to show the emergence of what has been called “The Second Wave” of Fintech disruption.
The First Wave of Fintech disruption was all about upstarts taking on banks, brokerage firms, insurance companies, wealth managers, and others in their traditional roles – helping consumers and businesses make deposits, check balances, pay bills, buy and sell securities, transfer funds, shop for insurance, and more – leveraging the comfort of their chosen device or location. Last October we reviewed the impact of Robots in the back office – helping to bring efficiency to loan origination, customer on-boarding, account validations, customer service, quantitative research, algorithmic trading, report writing and more. That’s all First Wave – and it’s been happening for years.
A recent report found here, talked about the Second Wave of Fintech as it applies to banking in the UK. It’s worth a read. (I like the part that says that nine out of ten UK bankers are worried that a large part of their revenue is at risk. The tenth one should worry too.) As noted in the report, the Second Wave of Fintech disruption is going to change a lot more than the First Wave did. Much as the Internet has moved from helping us find information to linking that information with our actions and activities – in an effort to predict future behavior, the Second Wave of Fintech seeks to link people and businesses to their actions to predict future outcomes. Just as Facebook and Google now make some people nervous at the depth of their insight and the potential for intrusion – the Second Wave of Fintech is causing some to cast a wary eye at what may come when firms aggregate our financial data from different sources (not just banks). Along with our purchase behavior and data on our other activities – and from there apply AI, big data analytics, and smart algorithms to better understand our past and predict what will come next.
The Second Wave has clear potential benefits. For some it may result in more choices (and perhaps better decisions) for purchases or sales of homes, cars, insurance, appliances, healthcare, energy, and more – letting users execute those choices, make purchases (or sales) more easily and even switch vendors with a few clicks. For some it will allow smarter business decisions on who to buy or borrow from; who to sell or lend to; what and when to buy sell or invest; and more. For some, the potential for misuse is scary. Google and Facebook are all over this wave, too.
We enjoy advising smart growing Fintech firms (First or Second Wave) as they seek to buy, sell or raise capital. We can only hope that they use the evolving tools wisely. The report below contains information on the current trends, transactions and m&a values in the six segments of the Fintech world that we follow and sometimes lead. Some of the more interesting recent transactions include:
- Clover Health (Jersey City, United States) raised $500mm in a Series E funding round led by Greenoaks Capital Partners,
- Dropbox (NASDAQ:DBX) agreed to acquire HelloSign for $230mm,
- Zix Corporation (NASDAQ:ZIXI) agreed to acquire AppRiver for $275mm,
- Collibra (Brussels, Belgium) raised $100mm in a Series E funding round led by CapitalG and included return investors ICONIQ Capital, Index Ventures,
- Sermo (a client of Marlin & Associates) agreed to accept a Significant Investment from Abry Partners. Read more here.
Read more from our February Fintech Market Update below.