the global financial services cvc report · 2019. 12. 11. · quarterly financial services...
TRANSCRIPT
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A comprehensive, data-driven look at global financial services corporate venture capital activity
The Global Financial Services CVC Report
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Contents
7 Global Financial Services CVC Investment Trends
Annual and Quarterly Activity
Deal Share by Stage
Financial Services CVC Deal Histogram
1 3 Sector Activity ComparisonMost Active Financial Services CVCs
Sector Deal Share Activity
1 6 Financial Services Activity by GeographyContinental Trends
Countries with Most Activity
US Market Investments
2 2 Sector Investment Activity and TrendsBank CVC Trends
Insurance CVC Trends
Capital Markets CVC Trends
Payments CVC Trends
1 9 Unicorn InvestmentsFinancial Services CVCs Investments to Unicorns
Unicorn Co-Investment
Most Active Financial Service CVCs
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Most fin services CVCs have backed ≤ 10 deals since 2014: 64% of fin services CVCs analyzed have completed 10 or fewer deals since 2014. Just 6 fin services CVC groups have completed >50 deals over the same period.
25 CVCs have funded 1 or more unicorns since 2014: Goldman Sachs Principal Strategic Investments has backed 5 unicorns, while 6 other financial services CVC groups have invested in 3 or more unicorns.
Fin services CVC deals to companies outside North America accelerate: North American share of financial services CVC deals fell from 57% in 2014 to 40% in 2019 YTD. Meanwhile, fin services CVCs are increasingly active in Europe, where deal share has grown from 7% to 25% over the same period.
Note: This report includes equity deals made by financial service CVCs to companies across sectors, not restricted to fintech. We exclude non-equity deals. This report does not include companies funded solely by angels or private equity firms. All data is sourced from CB Insights.
Summary of findingsFinancial services CVC hits new highs: Financial services CVC groups have invested in a record 329 deals worth $8B in 2019 YTD. Q3’19 saw the highest amount of deal activity by financial services CVC groups on record.
Banks are becoming more active investors: Banks are rapidly accelerating their CVC activity, with annual deal activity up over 8x between 2014 and 2018. 42% of fin services CVC deals in 2019 YTD have come from banks.
Insurance CVCs slow down in 2019 after rapid investment growth: Between 2014 and 2018, investments by insurance CVC groups grew by nearly 6x, though pace of deal activity slowed to 4% in 2019 YTD (11/26/19) compared to 32% in 2018.
Ping An leads as most active fin services CVC: Ping An Ventures leads CVC activity among financial services firms, followed by Citi Ventures and Mitsui Sumitomo Insurance Venture Capital. 5 of the top 10 most active CVCs were insurance organizations, and 3 were banks’ strategic arms.
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Global Financial Services CVC Investment Trends
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$7BO F F U N D I N G A C R O S S
303 dealsI N 2 0 1 8
G L O B A L L Y , F I N A N C I A L S E R V I C E S C O R P O R A T E V E N T U R E C A P I T A L G R O U P S P A R T I C I P A T E D I N
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Financial services CVCs reach record deal activityAnnual deals and financing by financial services CVCs, Q1’14– 2019 YTD (11/26/19)
A N N U A L F I N S E R V I C E S C V C D E A L S R I S E 5 X + S I N C E 2 0 1 4
Deal activity in 2019 looks slow in comparison to the previous year as 2018 was bolstered by record activity from individual investors like Goldman Sachs Principal Strategic Investments, Portag3 Ventures, Monex Ventures, and Ping An Ventures.
4,545
$50,213
$0.7 $4.6 $5 $2.7 $7 $8
58
109
172191
303329
0
50
100
150
200
250
300
350
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Fund
ing
($B)
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Fin services CVC deals up over 500% in Q3’19 vs. Q3’14Quarterly financial services CVC-backed deals and financing, Q1’14– 2019 YTD (11/26/19)
Q U A R T E R L Y F I N S E R V I C E S C V C D E A L A C T I V I T Y H I T S R E C O R D H I G H I N Q 3 ’ 1 9
$0.1$0.2 $0.1 $0.3
$0.2$0.3 $3.6 $0.4 $2.4 $1.5 $0.4 $0.7 $0.4 $0.8 $0.9 $0.7 $1.6 $1.5 $1.6 $2.3 $1.2 $2.6 $3.2
9 1117
2117 19
38 3541
53
28
5043
5649
43
74 7381
75 76
95
105
0
20
40
60
80
100
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0Q1
'14
Q2'1
4
Q3'1
4
Q4'1
4
Q1'1
5
Q2'1
5
Q3'1
5
Q4'1
5
Q1'1
6
Q2'1
6
Q3'1
6
Q4'1
6
Q1'1
7
Q2'1
7
Q3'1
7
Q4'1
7
Q1'1
8
Q2'1
8
Q3'1
8
Q4'1
8
Q1'1
9
Q2'1
9
Q3'1
9
2014 2015 2016 2017 2018 2019
Deal
s
Fund
ing
($B)
In Q3’15 DiDi Chuxing raised a $3B Series F; in Q1’16 Lu.com raised a $1.2B Series B; Q3’19 saw two $500M+ mega-rounds
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Deal share by stage between Q1’14– 2019 YTD (11/26/19)
Late-stage deal share grows 8% up from 18% in 2018C V C A C T I V I T Y H I S T O R I C A L L Y C O N C E N T R A T E S T O S E R I E S B R O U N D S A N D E A R L I E R
19% 22% 22% 22% 19% 17%
33% 25% 28%32%
28% 31%
17% 28% 24%21%
25% 23%
16%10% 10%
15%10% 14%
12%
1%5%
4%
5%7%8%
4%3%
3%5%
3% 6% 6% 3% 9%4%
0%
25%
50%
75%
100%
2014 2015 2016 2017 2018 2019 YTD
Seed/Angel Series A Series B Series C Series D Series E+ Other
Late-Stage
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64% of fin services CVCs invested in 10 or fewer deals Financial services CVC-backed deals, Q1’14– 2019 YTD (11/26/19)
M O S T F I N S E R V I C E S C V C S A R E N O T I N V E S T I N G H E A V I L Y
16
9 9
1 2
15
13 12
33
3
31
1
1
1
2
1
0
5
10
15
20
25
30
35
40
0-5 6-10 11-30 31-50 >50
Bank Insurance Payments Capital Markets
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Ping An is the most active among fin services CVCsI N S U R E R S L E A D A S M O S T A C T I V E F I N S E R V I C E S C V C S
Financial services CVC-backed deals Q1’14– 2019 YTD (11/26/19)
BankInsurance Payments Capital Markets33
35
35
36
55
56
64
66
66
68
0 10 20 30 40 50 60 70 80
American Family Ventures
Reinventure
Monex Ventures
Portag3 Ventures
American Express Ventures
AXA Venture Partners
Goldman Sachs Principal Strategic Investments
Mitsui Sumitomo Insurance Venture Capital
Citi Ventures
Ping An Ventures
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Insurance CVC activity slows as deals by banks jumpFinancial services CVC-backed deals Q1’14– 2019 YTD (11/26/19)
F I N S E R V I C E S C V C I N V E S T M E N T A C T I V I T Y O V E R T I M E
146152
111
146
0
20
40
60
80
100
120
140
160
2014 2015 2016 2017 2018 2019 YTD
Deal
s
BankInsurance Payments Capital Markets
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Bank deal share increases to 42% in 2019 YTDFinancial services CVC-backed deal share, Q1’14 – 2019 YTD (11/26/19)
B A N K C V C A C T I V I T Y A C C E L E R A T E S I N 2 0 1 9
29% 28% 29% 29%36%
42%
43% 48%
55% 57%47%
44%
16%16%
10% 6% 8%8%
12% 8%6% 8% 9% 6%
0%
25%
50%
75%
100%
2014 2015 2016 2017 2018 2019
Bank Insurance Payments Capital Markets
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Over 50% of fin services CVC deals are now in Asia & Europe
“Other” includes Australia, Brazil, Israel, Kenya, Mexico, New Zealand, South Africa, and Uganda.
N O R T H A M E R I C A F I N S E R V I C E S C V C D E A L S H A R E D R O P S
Deal share by continent between Q1’14 – 2019 YTD (11/26/19)
57%52% 56% 52%
46%40%
7% 17%
20% 27%
25%
25%
29%24%
15% 14% 22%29%
7% 7% 8% 7% 6% 7%
0%
25%
50%
75%
100%
2014 2015 2016 2017 2018 2019 YTD
Other
Asia
Europe
North America
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US companies dominate investment activity, but Japan is on the rise
Countries represent a company’s place of domicile.
T O P 5 C O U N T R I E S F O R F I N S E R V I C E S C V C I N V E S T M E N T
China
United States
Germany
United KingdomJapan
130122
43
66
0
20
40
60
80
100
120
140
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Financial services CVC-backed deal activity, Q1’14 – 2019 YTD (11/26/19)
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Nearly half of US fin services CVC deals are in CaliforniaF I N S E R V I C E S C V C A C T I V I T Y I N T H E U S
Map depicts companies that have raised fin services CVC equity funding since Q1’14 through 2019 YTD (11/26/19).
78%82% 82%
87%
78%83%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017 2018 2019 YTD
Deal
sha
re
CVC deal activity concentrates to companies in 5 states Q1’14 – 2019 YTD (11/26/19)
MassachusettsCalifornia IllinoisTexasNew York
Top 5 States Running Total
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9% of financial services CVCs have backed more than 1 unicornFin services CVCs backing unicorns, Q1’14–2019 YTD (11/26/19)
26% of investors back 1 or more unicorns. Investors backing 1 unicorn are not shown above.
C V C I N V E S T M E N T S I N U N I C O R N S
Visa Ventures
XL Innovate
Munich Re Ventures
Allianz X
Ping An Ventures
Citi Ventures
Capital One Growth Ventures
American Express Ventures
Goldman Sachs Principal Strategic Investments
0 1 2 3 4 5 6
Number of Unicorns
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8 unicorns are backed by 2+ fin services CVC groupsU N I C O R N S W I T H M U L T I P L E F I N S E R V I C E S C V C B A C K E R S
Company Description Location Sector Fin Services CVC Investors
Tradeshift is a supply chain payments enabler and marketplace. San Francisco, CA Fintech
American Express Ventures, Goldman Sachs Principal Strategic Investments, HSBC Venture Capital
Symphony is a collaboration and productivity tool for financial institutions. Palo Alto, CA Fintech
Goldman Sachs Principal Strategic Investments, Barclays Ventures, MUFG Innovation Partners
Plaid offers APIs that enable applications to connect to consumer bank accounts. San Francisco, CA Fintech
American Express Ventures, Citi Ventures, Visa Ventures
Next Insurance offers coverage targeting small businesses. Palo Alto, CA Insurtech American Express Ventures, Munich Re Ventures, Nationwide Ventures
C2FO is a working capital marketplace. Leawood, KS Fintech Intact Ventures, Liberty Mutual Strategic Ventures
Turo is a car sharing marketplace. San Francisco, CA E-commerce & direct-to-consumer Allianz X, Citi Ventures
Fair offers short-term car leases. Santa Monica, CA Auto & transportation Exponential Ventures, Munich Re Ventures
Lemonade is a home and renters insurance startup. New York, NY Insurtech Allianz X, XL Innovate
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Rank CVC Investor Unicorn Investments
1 Carta, Circle, GitLab, Symphony, Tradeshift
2 Next Insurance, Plaid, Stripe, Tradeshift
3 Riskified, Snowflake Computing, ThoughtSpot
3 C2FO, Plaid, Udaan
3 Didi Chuxing, JOLLY, Oscar Health
3 C2FO, Lemonade, N26
3 Babylon Health, Fair, Next Insurance
Goldman Sachs has invested in 5 unicorns since 2014
Goldman Sachs refers to Goldman Sachs Principal Strategic Investments.
F I N S E R V I C E S C V C I N V E S T O R S B A C K I N G T H E M O S T U N I C O R N S
Goldman Sachs takes the top spot with investments in 5 unicorns including: 1. Carta, an equity management
solution 2. Circle, a P2P blockchain
payments network3. GitLab, a DevOps application4. Symphony, a communication
and content sharing platform5. Tradeshift, a B2B supply
chain purchasing platform.
https://www.cbinsights.com/company/eshareshttps://www.cbinsights.com/company/circle-internet-financialhttps://www.cbinsights.com/company/gitlabhttps://www.cbinsights.com/company/symphony-communication-services-holdingshttps://www.cbinsights.com/company/tradeshift
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Sector Activity and Trends
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Bank CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R
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22
Annual bank CVC deal activity hits new highs in 2019Bank CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)
B A N K C V C T R E N D S
$0.3 $0.6 $1.2 $0.8 $2.9 $3.5
17
31
52 57
111
146
0
20
40
60
80
100
120
140
160
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Fund
ing
($B)
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23
Citi and Goldman are the most active bank CVCsBank CVC-backed deals Q1’14– 2019 YTD (11/26/19)
B A N K C V C T R E N D S
66 64 35 25 20 18 17 15 13 130
10
20
30
40
50
60
70
Citi Ventures Goldman SachsPrincipalStrategic
Investments
Reinventure Capital OneGrowth
Ventures
BarclaysVentures
CollectorVentures
Wells FargoStrategicCapital
NAB Ventures BerlinerVolksbankVentures
Nanto CVCFund
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24
Insurance CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R
-
25
Annual insurance CVC deal growth slows down in 2019Insurance CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)
I N S U R A N C E C V C T R E N D S
$0.2 $3.5 $3.5 $1.6 $3.3 $4.3
25
54
98
111
146152
0
20
40
60
80
100
120
140
160
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Fund
ing
($B)
4%
32%
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Ping An Ventures and Mitsui Sumitomo lead investment activityInsurance CVC-backed deals Q1’14– 2019 YTD (11/26/19)
I N S U R A N C E C V C T R E N D S
68 66 56 33 31 27 22 18 18 15 150
10
20
30
40
50
60
70
Ping AnVentures
MitsuiSumitomoInsuranceVentureCapital
AXA VenturePartners
AmericanFamily
Ventures
Allianz X Munich ReVentures
TransamericaVentures
XL Innovate AvivaVentures
AssurantGrowth
Investing
NationwideVentures
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27
Capital Markets CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R
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28
Capital markets CVC activity dips in 2019Global capital markets CVC-backed deals & funding Q1’14 – 2019 YTD (11/26/19)
C A P I T A L M A R K E T S C V C T R E N D S
$51.6 $87.5 $204.5 $229 $260.4 $98.9
79
10
16
28
20
0
5
10
15
20
25
30
0
50
100
150
200
250
300
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Fund
ing
($M
)
-
29
Monex Ventures and CME Ventures lead capital markets CVCsCapital markets CVC-backed deals Q1’14 – 2019 YTD (11/26/19)
In March 2018, CME Group absorbed Euclid Opportunities in an acquisition of parent company NEX Group.
C A P I T A L M A R K E T S C V C T R E N D S
35 21 10 7 7 4 4 30
5
10
15
20
25
30
35
40
Monex Ventures CME Ventures EuclidOpportunities
DB1 Ventures Nasdaq Ventures SIX FinTechVentures
Fitch Ventures XTX Ventures
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30
Payments CVC ActivityI N V E S T M E N T A C T I V I T Y & T R E N D S B Y S E C T O R
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31
Payments CVC activity reaches peak levelsPayments CVC-backed deals & funding Q1’14– 2019 YTD (11/26/19)
P A Y M E N T S C V C T R E N D S
$121.9 $383.9 $202.4 $167.3 $773.5 $875.4
9
1817
11
24
28
0
5
10
15
20
25
30
0
200
400
600
800
1,000
2014 2015 2016 2017 2018 2019 YTD
Deal
s
Fund
ing
($M
)
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32
American Express Ventures leads payments CVC groupsPayments CVC-backed deals Q1’14 – 2019 YTD (11/26/19)
Data only includes investment by delineated CVC groups
P A Y M E N T S C V C T R E N D S
55 23 18 6 50
10
20
30
40
50
60
American Express Ventures Saison Ventures Edenred Capital Partners Visa Ventures First Data Ventures
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This report only includes investments by financial services CVC funds, which are defined as separately demarcated corporate investment vehicles that fall into the following 4 categories of corporates: banking, insurance, payments, and capital markets. This report analyzes equity activity by 96 CVCs since 2014.
For questions regarding methodology, please reach out to [email protected].
R E P O R T M E T H O D O L O G Y
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Slide Number 1Slide Number 2Slide Number 3Summary of findingsSlide Number 5$7B�OF FUNDING ACROSS�303 deals�IN 2018Financial services CVCs reach record deal activityFin services CVC deals up over 500% in Q3’19 vs. Q3’14Late-stage deal share grows 8% up from 18% in 201864% of fin services CVCs invested in 10 or fewer deals Ping An is the most active among fin services CVCsInsurance CVC activity slows as deals by banks jumpBank deal share increases to 42% in 2019 YTDOver 50% of fin services CVC deals are now in Asia & EuropeUS companies dominate investment activity, but Japan is on the riseNearly half of US fin services CVC deals are in California9% of financial services CVCs have backed more than 1 unicorn8 unicorns are backed by 2+ fin services CVC groupsGoldman Sachs has invested in 5 unicorns since 2014Slide Number 20Bank CVC ActivityAnnual bank CVC deal activity hits new highs in 2019Citi and Goldman are the most active bank CVCsInsurance CVC ActivityAnnual insurance CVC deal growth slows down in 2019Ping An Ventures and Mitsui Sumitomo lead investment activityCapital Markets CVC ActivityCapital markets CVC activity dips in 2019Monex Ventures and CME Ventures lead capital markets CVCsPayments CVC ActivityPayments CVC activity reaches peak levelsAmerican Express Ventures leads payments CVC groupsThis report only includes investments by financial services CVC funds, which are defined as separately demarcated corporate investment vehicles that fall into the following 4 categories of corporates: banking, insurance, payments, and capital markets. This report analyzes equity activity by 96 CVCs since 2014. ��For questions regarding methodology, please reach out to [email protected] Number 34