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FinTech Market Overview

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Catalyst Investors has a long-standing history investing in businesses at the intersection of SaaS and financial services & technology, with most recent examples including MINDBODY (payments & business management SaaS for health & wellness businesses), Clinicient (revenue cycle management collections, EMR, and practice management SaaS for physical & occupational therapists), and Fusion Risk Management (business continuity SaaS sold to financial institutions and other F1000 enterprises). Lately, Catalyst has spent more time researching the FinTech sector and has published two reports to broadcast the team’s findings:

• FinTech Market Overview – a primer that segments the FinTech ecosystem based on end-market and business model (e.g., enablers vs. replacers)

• Enterprise Financial Management: Solutions for the Office of the CFO – a deeper look into software and tech-enabled services enabling businesses and their finance function to work more efficiently

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FinTech Market Overview

  1. 1. FinTech Market Overview September 2018 Kirk Mahoney, Grady Kidder & Todd Clapp
  2. 2. 2 ▪ Investor’s Perspective: • Due to unabated Venture Capital interest and a talented pool of entrepreneurs, there is a large supply of businesses ready for Growth Equity investment • The recent increase in FinTech acquisitions by technology companies and financial services companies give credence to the viability of strategic exits • Recent regulatory developments including the creation of the OCC FinTech charter in the US and PSD2 in Europe have created an inflection point for the industry ▪ Market Size • US Financial Services is a $1.45TN industry, representing 7.5% of the US economy [1], growing at a rate of ~5% annually [2] • Employs 6.3mm people [1] FinTech Overview ▪ The Financial Services Technology (“FinTech”) industry is comprised of: • Enablers: applications, information services and tech-enabled services provided to financial services companies (e.g., banks, lenders, insurance companies, asset managers, broker-dealers, etc.) and to the Office of the CFO of businesses of all sizes (SMB – Enterprise) • Replacers: tech-enabled financial services businesses for businesses, consumers, non-profits, and government entities 1. Source: BEA, 2017, industry designation 55; 2. 2012-2017 CAGR
  3. 3. 3 FinTech Market Opportunity Provide Existing Services Better Provide New Services Replacers Enablers Tech-Enabled Alternative Lenders Robo Advisors Neobanks Banking-as-a- Platform Back Office SaaS & Data Provided to Fin. Services InsurTech Carriers Lending Marketplaces Challenger Banks Alternative Data Providers ▪ FinTech businesses fill two fundamental market gaps: • Provide existing financial services better or to a broader population • Provide new financial services Front Office SaaS & Data Provided to Fin. Services Tech Enabled Outsourced Services
  4. 4. 4 Insurance Technology “InsurTech” Financial Services Technology “FinTech” Market Map Note: this landscape is intended to be a representative sampling and is not an exhaustive list. Please direct inquiries to kirk@catalyst.com. Enterprise Financial Management / Office of the CFO Financial GRC Banking & Lending Tech Next Generation Transfers & Payments Capital Markets & Asset Mgmt. Tech
  5. 5. 5 Financial Services Technology “FinTech” Market Map Insurance Technology “InsurTech” • Includes applications and information services delivered to insurance brokers and carriers; IoT systems generating alternative underwriting data; tech-enabled outsourced services; insurance comparison marketplaces; and tech-enabled insurance companies Enterprise Financial Management / Office of the CFO • Applications and information services delivered to finance & accounting departments; and tech- enabled outsourced services Financial GRC • Applications and information services delivered to the compliance & risk departments of corporations and financial institutions; payments compliance solutions; and tech-enabled risk-related services Banking & Lending Tech • Comprised of applications and information services delivered to banks, credit unions and non-bank lenders; digital banks including challenger banks and neobanks; tech-enabled alternative lenders; and lending marketplaces Next Generation Transfers & Payments • Next-generation physical and digital payments gateways; merchant acquirers; payment processors; payments infrastructure providers; and money transfer services Capital Markets & Asset Mgmt. Tech • Applications and information services delivered to capital markets companies; alternative wealth managers, including “robo advisors”; next gen capital markets infrastructure; alternative broker-dealers; and alternative data solutions
  6. 6. Please send any inquiries to kirk@catalyst.com
  • abdeb1

    Feb. 10, 2020

Catalyst Investors has a long-standing history investing in businesses at the intersection of SaaS and financial services & technology, with most recent examples including MINDBODY (payments & business management SaaS for health & wellness businesses), Clinicient (revenue cycle management collections, EMR, and practice management SaaS for physical & occupational therapists), and Fusion Risk Management (business continuity SaaS sold to financial institutions and other F1000 enterprises). Lately, Catalyst has spent more time researching the FinTech sector and has published two reports to broadcast the team’s findings: • FinTech Market Overview – a primer that segments the FinTech ecosystem based on end-market and business model (e.g., enablers vs. replacers) • Enterprise Financial Management: Solutions for the Office of the CFO – a deeper look into software and tech-enabled services enabling businesses and their finance function to work more efficiently

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