1. Trends in FinTech
An OurCrowd Briefing
Zack Miller & Mick Weinstein

2. Your Hosts
Mick Weinstein
VP Marketing
BillGuard
Zack Miller
Head of Investor
Community @ OurCrowd

3. Focus tonight

4. The History of FinTech Post-Internet
§ Broker on the phone >> Charles Schwab
§ Low cost passive investing via online ETFs >> fully
automated, low or no cost robo-management
§ Expensive, slow, inconvenient bank transfers >> fast,
cheap payments
§ Bank lending >> P2P debt financing
§ Private placements >> equity crowdfunding
§ Illiquid holdings & networks of friends >> new secondary
markets

5. Asset Management / Robo-visers
$300M valuation
Index, Ribbit, Greylock,
Benchmark
$75M valuation
Canvas Ventures
Bessemer, Citi
Ventures, NW Mutual
Institutional Venture
Partners, Venrock,
BlackRock
JP Morgan, Goldman,
Foundation Capital,
Norwest VP
Union Square, Spark

6. Asset Management / Robo-visers
§ Well-funded, maturing space
§ Competing on price
§ Are these creating new
services or simply replicating
existing services online?
§ Another big challenge: is
passive management going
to zero cost?
» Lower costs >> bigger scale >> more
data
» Big data world means that data will
be a core corporate asset

7. Content: 4 Different Approaches
Accel, Northwest
Mutual
Union Square, Bain
Capital Ventures
Steelpoint Partners
Accel, Benchmark

8. Content: 4 Different Approaches
§ Differentiating and competing on product quality
§ Companies like SigFig (automated professional service)
and LearnVest (subscribing to advisers) are creating new
business models to deliver financial services.
§ Can these sites be stand-alone traffic destinations?
§ UPDATE: Seeking Alpha broke up with Yahoo Finance
yesterday

9. Payments
Blumberg, Lool,
Rhodium
Khosla, Sequoia, KPCB, Citi,
Starbucks, Goldman, Morgan
Stganley, Barclays, JP Morgan
Ebay - $1.5B acquisition
Greylock, Accel
Accel
Khosla, Founders Fund,
Sequoia, General Catalyst,
Andreessen Horowitz

10. Payments
10
32
28
33
23
29
10
4
11
4
9
10
6
6
7
6
10
19
70
53
50
49
46
28
5
6
5
7
12
14
2008
2009
2010
2011
2012
2013
January
2008
–
June
2013:
VC
Dollar
Amount
Share
Banking
/
CorpFin
Capital
Markets
Data
Analy@cs
Payments
PFM

11. Payments
Starbucks processing 6M
transactions/week (7/14)
70% + penetration in home
market, rapidly growing across
Africa & Eastern Europe
Big entrants are expected
to arrive soon
Approaching $1B market
cap on NASDAQ
~$2B market cap on
NASDAQ

12. Today’s retail banking space
§ Bain & Co: “more than half” of
top 80 institutions are not
meeting benchmarks
consumers already expect from
banks
§ Offline, inconvenient,
expensive, low value-add
Retail Banking: slow adaptation to the Internet

13. Simple’s Features:
§ Goals – ability to set daily
savings towards a goal
§ “Safe to spend” – bird’s-eye
view of spendable money given
budgets, goals, cash flow,
recurring charges, etc
Acquired by Intuit ~$170M
Retail Banking & Personal Finance Tech

14. Retail Banking & Personal Finance Tech
Innovation Endeavors, Founders
Fund, Khosla, Bessemer, OurCrowd
Benchmark, Shasta, First Round, Founders
Fund – acquired, Intuit $170M
Acquired, Intuit $360M Sanford Weill, former CEO of Citibank

15. § Challenges of moving up
the value chain
§ A very funded space, but
relative to total possibilities
maybe not
§ But: A lot of opportunities
still exist with
Trend: Personal Finance Management Challenges
“PFM is dead”
SOURCE: http://bit.ly/ocfintech1

16. Personal and SMB loans
today:
§ Classic case of
middleman in an
automatable process
§ Credit crunch despite
increasing bank profits has
material effect on job
growth
P2P Debt Financing

17. P2P Debt Financing
Sequoia, Blackrock, DFJ, Accel,
Institutional Venture Partners
T. Rowe Price, Wellington,
Blackrock, Sands Capital,
Norwest, Canaan, Union Square
Bessemer, Rothschild Family,
Arrowgrass
Index Ventures, Accel, Union
Square, Ribbit Capital
Greylock, Accel, Meritech

18. Equity Crowdfunding
Angels
Google Ventures, Atlas, DFJ,
KPCB, SV Angel, Floodgate
First Round, Y Combinator,
Felicis, Spark, Intel Capital,
Andreessen Horowitz, General
Catalyst, SV Angel
Canaan Partners, Google Ventures,
Union Square, Maveron

19. Equity Crowdfunding
Virgin
America
Partnership
February
2014
Sharing
hot
consumer
brands
with
Virgin
Airline’s
ameni7es
procurement
team
GE
Ventures
–
OurCrowd
Partnership
November
2013
Exclusive
dealflow
sharing
agreement
allowing
GE
Ventures
alloca7on
in
crowdfunding
rounds
ZionTech
–
IBM
Incubator
Deal
April
2014
IBM’s
first
accelerator
in
Israel
opened
in
conjunc7on
with
ZionTech’s
parent
company,
a
bou7que
investment
firm
ZionTechBlue
Ini7a7ves
Unique
products

20. The Internet has changed (almost) everything in finance
§ Asset-ification of everything:
» Unsecured personal loans
» Bets & predictions in some niche futures/options markets
» U-Haul investing club example
§ Internet finance 1.0 is now being disrupted by fintech 2.0
» Personal broker >> Charles Schwab >> Robo-Visors >> zero fee passive platforms
§ Who is disrupting who, though?
» Robo-visors claim to go after all passive investment firms, but are they going after
anyone outside the low-cost, passive management firms like Vanguard?
§ Fintech is slower & more expensive to build

21. Trend: Challenges in disrupting the bank
§ Simple and the like are skins on top of the UI of existing bank tech
§ A disruptive bank would be one that owns the full technology stack

22. Trend: Investor Types

23. Corporates are getting
particularly active:
§ In 2013, corporate venture
funds invested more than
traditional VCs in the
fintech space
Fintech's star investor:
Google Ventures (?!)
§ Angel List
§ CircleUp
§ Lending Club
§ LendUp
Trends: Who is investing?

24. Trend: VC Money Into FinTech
17
18
22
24
18
21
9
7
14
13
14
12
13
16
10
9
12
14
53
50
43
45
47
44
9
9
11
9
9
10
2008
2009
2010
2011
2012
2013
January
2008
–
June
2013
VC
Deal
Share
Banking
/
CorpFin
Capital
Markets
Data
Analy@cs
Payments
PFM

25. Q&A
Mick: mick@billguard.com | @mickwe
Zack: zack@ourcrowd.com | @newrulesinvest