Finch Capital FinTech Prediction 2019

2019 FINTECH PREDICTIONS
Finch Capital 2019 Predictions

445
535 570
780
1,334
1,522
1,610 1,611
804
0
400
800
1,200
1,600
2,000
2010 2011 2012 2013 2014 2015 2016 2017 H1 2018
NumberofFintechdeals
Number of Fintech deals will probably remain flat
Finch Capital (formerly Orange Growth
Capital) is a venture capital firm investing
in early stage companies.
We are thematic investors focusing on
technology-enabled innovation bringing
about the transformation of the financial
services sector.
Finch Capital has four offices in
Amsterdam, London, Jakarta and
Singapore, out of which we support bold
entrepreneurs.
We have made over 25 investments in
leading financial technology businesses
across the Netherlands, UK, Germany,
Switzerland, Ireland, Poland, Spain and
Indonesia.
Finch Capital is now investing its second
fund with a geographic focus on Europe
and selectively on South East Asia.
Radboud Vlaar, Partner
Hans de Back, Partner
Aman Ghei, Principal
Mike Brennan, Principal
Alix Brunet, Associate
Lourens Ruigrok, Associate
Thierry Zois, Associate
Martyna Walkiewicz, Associate
2
Introduction
Welcome to the 4th edition of Finch Capital’s predictions, our annual thoughts highlighting what
we believe one can expect in 2019 from the financial technology sector as well as looking back at
how we faired with our 2018 predictions.
Globally, the Fintech market continues to gain momentum. Most notable is that the number of
early stage deals (angel/seed and early VC) has stayed rather steady for some time, which is
specific to this vertical, signaling that investors, despite the increases in fund size, prefer to invest
in this sector at an earlier stage in financial technology.
Challenger banks dominated fundraising this year, with Revolut, Monzo and N26 leading the
way in Europe. PSD2 and GDPR have been damp squibs but we expect that to change in the near
future. And finally, M&A has been robust, and not surprisingly, it is payments that drives this
robustness.
Notwithstanding Ant Financial’s massive $14B round in the summer - which many consider the
epitome of what makes Asia the standout region to invest in Fintech, we expect VC activity in
Fintech to grow steadily, ending 2018 with roughly $15-20B in volume (excluding Ant Financials
round)
Source: FT Partners.
5.1 5.5
6.9 6.5
17.3
21.9
28.6
26.1
32.2
0
10
20
30
40
50
2010 2011 2012 2013 2014 2015 2016 2017 H1 2018
Dealvolume($bn)
2018 is set to be a record year for global Fintech financing
Other deals Three largest deals

2019 Investment Trends
Our portfolio
State of unions: Deeper dive into geographic momentum
Top 10 investment trends for 2019
Summary and 2018 predictions check in

4
Financial services in Europe have a long, successful history
Financial technology in Europe has always been “ahead” of the US. What that really means is that investors have
more faith in value stocks in Europe than in the US and as a result, the financial industry has maintained a
competitive advantage over peers in the US.
Source: Worldscope, Goldman Sachs Global Investment Research, Datastream
Share of the biggest sector in the US Share of the biggest sector in Europe

5
South East Asia becoming the standout Fintech region
Sources: World Bank, Global Financial Inclusion Database, Fintech Singapore
0%
20%
40%
60%
80%
M
yanmar
Cam
bodia
Laos
Philippines
Indonesia
Vietnam
Thailand
M
alaysia
Singapore
Japan
Credit card penetration is still extremely low is SEA
0%
20%
40%
60%
80%
100%
120%
Vietnam Philippines Indonesia Thailand Malaysia Singapore Japan
Credit bureau coverage varies but majority is not covered
Credit Bureau Coverage Ratios Public agencies Credit Bureau Coverage Ratios Private agencies
Indonesia Fintech growth driven by attractive market fundamentals
Mobile,
70%
Desktop,
30%
POPULATION
261 million
GDP GROWTH
5% per annum
BANKED POPULATION
49%
BORROWED FROM
FINANCIAL INSTITUTION
17%
ACTIVE SOCIAL
MEDIA USERS
130 million
MOBILE SUBSCRIPTIONS
416 million
INTERNET PENETRATION
143 million
72% Urban
49% Semi-urban
48% Rural
Credit boom giving rise to an ecosystem fueling the economy like never seen before, particularly in Indonesia

6
AI jobs giving rise to new wave of growth
Source: UIPath
Poland, Romania, Spain and Hungary have the opportunity to catch up relative to their population to rest of
Europe. The most in-demand job in the AI vertical is a software engineer

Nothing illustrates more than insurance being one of UiPath’s fastest growing vertical for back
office automation. In additional insurers have quickly adopted AI solutions for fraud, claim
assessment and recovery/damage assessment (Tractable’s traction a good testament)
Prediction
What we got right and wrong last year
Status Comments
ROBO meltdown as unit
economics get stretched
Crypto panic kicks in
Ripple breaks out
Payment consolidation
Challenger bank competition heats
up, not a traditional VC game
Without connected platform,
financing businesses a challenge
Focus on reduction of cost of claims
Banks afraid to touch infrastructure
Nothing illustrates this more than the fall of Bitcoin and the drying up of traditional ICO funding.
Where exchanges go from here will be interesting. In the short term, crypto remains a speculative
asset class
Banks are going all in to launch “robo-advisors” and making it harder and harder for your startup
robo advisor to attraction $ billions in AUM and make enough money. ROBOs will need to evolve
to platform companies, touching consumers in different ways rather than just pure investing
If any company that was supposed to move us from “blockchain experiments” to “blockchain
production” it was Ripple. However most of the noise (and money) the company makes is
through XRP trading and not product revenue
Paypal bought iZettle, Worldline bought SIX, ING bought Payvision, SIA bought First Data’s card
processing in CEE... the list can go on. As usual, payments M&A continues to drive up overall
M&A in the Fintech space and this is expected to continue
Given the amount of capital challenger banks need, we thought it was too “capital intensive” for
VCs. But we were wrong. VCs (and CVCs) have enough money as proven by Monzo, Monese,
Revolut, N26 raises. There will be more, but expect smaller ones to consolidate
Small business credit gap remains large, but the focus has shifted from just loan origination to
more connected relationships with customers. Accounting platforms are key to this and factoring
businesses are building sophisticated and instant pricing to address this
We are not sure about this. TSB’s upgrade was a disaster. We see some banks open to having tools
that automate DevOps, SecOps but some that prefer to operate in silos. Either way, our belief is
without sufficient capital and patience, banking infrastructure vertical remains tough to break into
7

1
2
3
4
Privacy: GDPR gets serious, consequences coming5
6
7
8
9
10
Regulation: RegTech growth kicks in as financials increasingly partner
PropTech: Disruption to reach legal
ICO: Death of utility token
Retail: “Free” in funds, trading and current account
IoT: Inflection point to change supply finance and insurance
Payments: Consolidation continues and differentiation is needed
SME lending: Ripe for consolidation
Insurtech: The intelligent insurer 2.0
Automation: AI-driven productivity and rise of the SME CFO
2019 Investment Trends

Market dynamics
• Plummeting price of sensors and the role out of 5G will result in 2019 being a
breakout year for connected device growth and the need for scalable solution to
handle dynamic traffic bursts will arise
• Security by design will be the subject of focus as devices become more
application centric and start penetrating Fintech and InsureTech
• Adoption of risk management model finally taking place after years of delays,
to enable insurers to collect behavioral data in near real time
• Move towards extending coverage of IoT data collection to non-urban areas
• Tracking goods in real time through the supply chain will enhance
transparency in trade finance
Companies to watch outside Finch portfolio
Connected home safety and insurance platform enables
preventive measures in a seamless fashion
Allows devices to communicate with each other and is focused
on the air, maritime and freight industries and logistical issues
Key takeaway
• The insurance industry will finally adjust their models to capture IoT data and
predictive applications will start to gain momentum
IoT: Inflection point to change supply finance
and insurance
9
Retail: “Free” in funds, trading and current account
Source: IoT Analytics, 2018
1
Market dynamics
• Deinstitutionalization and direct approaches where we will see new players
take significant market share from the old guard
• Real world advisors being augmented by voice, speech and chat technology as
cost/income ratio critical to scale. This will give rise to the next generation of
robo advisors: the hybrid cognitive advisor
• Building out the niche account: i.e. current account (Monzo), deposit account
(Oak North), FX account (Revolut), business account (Tide). All will try and
capture entire value chain via marketplace, but focused players will stand out
• Retail interest in crypto (aka Coinbase) dwindginly, move to ETFs and more
passive/cost effective investments
Enables incumbent advisors to supercharge their offering for
private wealth clients
Offers a series of core banking products and recently released the
WAY4 Messenger, a standalone banking chatbot that connects to
any banking solution
Key takeaway
• Data analytics will help investment managers become “bionic” advisors as
commissions become eroded and focus shifts on controlling costs
2
Source: KPMG, 2018
0
10
20
30
40
0
400
800
1,200
1,600
2017 2018 2019 2020 2021 2022 2023 2024 2025
Activeconnections(bn)
GlobalIoTmarket($bn)
Fast connected device adoption approaching inflection point
Global IoT market $bn Number of global active connections bn
0.0
0.5
1.0
1.5
2.0
2016 2017 2018 2019 2020
AUM($trn)
Increasing demand for enhanced investment managers in the US
From invested assets From non-invested assets

ICO: Death of the utility token
10
Market dynamics
• ICO 1.0 is dead, and as a result, focus has shifted from economics (utility) to
benefit (security) of most “blockchain” enabled applications
• Utility tokens were not a gateway for traditional investment firms to get
involved because, as most investors will say, a successful startup goes through
many pivots, so having a utility token as an incentive structure is not in the
long term interests of the venture community
• While security tokens do not completely solve this issue, it is one step forward.
However, regulation is needed. China is still unsure about security tokens
• Security tokens provide ability to fractionalize ownership and lower true
ownership cost. They use much of the same blockchain infrastructure as token
sales, but are sold and designed with compliance in mind
Proof-of-Asset protocol to bring Bank-as-a-Service (BaaS) and
blockchain together and facilitate tokenization and securitization
AML/KYC for the token issuance world
Key takeaway
• Still a wait and see scenario and lots of regulatory hurdles to overcome, but real
estate is the most logical vertical we expect these technologies to extend to
Market dynamics
• Real estate and blockchain can be synonymous with each other, but that will
only address ownership and settlement friction
• While residential real estate on blockchain would be nirvana, given
government involvement, we are more likely to see commercial real estate
adopt quicker
• For legal particularly in resi, mostly 2 elements need to be disrupted: 1)
valuation/property check which is manual today and 2) human solicitors
• Once some of the structural issues are solved or made easier, better
mortgage/financing products will be created (eg: chain free buying)
Juno.legal is squashing misconceptions about solicitors by
building their best of breed tech enabled law firm
Shieldpay is solving an important component of escrow/trust
and making it available to multiple parties
Key takeaway
• Real estate remains the largest sector in the world (2.5x GDP) but fundamental
technological change with government support required to “change the rails”
PropTech: Disruption to reach legal
43
Source: Autonomous NEXT Source: Fintech Global 2018
20 9 18 4 49 21 18 92
228
645
441 442
942
1,180
1,441
1,875
2,432
1,681
1,536
1,214
1,461
1,167
916
424
279
0
500
1,000
1,500
2,000
2,500
Sep-16
Oct-01
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
ICO funding has plummeted, leading to the utility tokens' death
Profile and listings,
24%
Property investment
platforms, 21%
Online agents &
brokerage, 15%
Marketing & landlord
software, 11%
Predictive & valuation
tools, 8%
Lending services, 4%
Other, 17%
"Legal" has not been a vertical of focus for Proptech

Privacy: GDPR gets serious, consequences coming
Regulation: RegTech growth kicks in as financials
increasingly partner
Market dynamics
• Data breaches will continue at current scale, with focus on larger targets.
FinTechs that hold important financial data could also come under attack
• Cybersecurity has replaced big data as top of mind of CEO, as C suite more
likely to come under pressure for data breaches vs. lack of revenue growth
• Focus on how to encrypt/secure while it is in runtime vs. traditional
technologies that secure at rest
• Quantum computing related encryption technique will get more funding, but
lack of “investor” knowledge will inhibit mainstream application this year
• GDPR fines will shake up value chain, particularly how organizations
implement data anonymization technologies
UCL spun out startup focusing on enabling data sharing by
automatically anonymizing data sets
Most security attacks are a result of human vulnerability and
Immersive addresses just that in enhancing our knowledge
Key takeaway
• GDPR was a damp squib in 2018, but with no end in sight on data breaches,
2019 will be the year the first meaningful fine is handed out
Market dynamics
• Banks fear Open Banking and PSD2. It is a bigger existential risk to them than
challenger banks because it commoditizes their only competitive advantage:
existing customer data
• “Marketplace banking” model resulting from this adoption at challenger banks
and PFMs solutions: think unbundling of financial products via single interface
• Common API standards likely to be set by the end of this year
• How do banks survive? Partnerships. Outsource KYC, API middleware layers
• Banks are not very efficient in the middle-back office resulting in terrible
consumer experiences (bank account openings, cross selling products etc)
• Consumers don’t understand “open banking” just like they don’t understand
html, xtp etc. They care about the consumer experience
One of the leaders in the open banking space, building out
new layer of middleware for clients like Zopa etc.
The ING owned financial aggregator. Yolt is one of the few
companies that is got it right in a crowded space
Key takeaway
• Regulatory driven technology change kicks in. Be in KYC, Open Banking or
front office, banks realize its now or never
5 6
Source: Breach Level Index Source: Business Insider Intelligence
3,000
1,340
1,000
500
412
198
150
123
117
100
87
0 500 1,000 1,500 2,000 2,500 3,000 3,500
Yahoo
River City Media
Aadhaar
Marriot
Adult Friend Finder
Deep Root Analytics
Equifax
Experian
Linkedin
Quora
Facebook
Millions of accounts hacked and will likely continue
14% 18%
77%
22%
45%
6%
0%
20%
40%
60%
80%
Open Banking is a positive change that
will benefit users
I understand the ways I could use
Open Banking
I would be concerned about sharing
my financial data with companies
other than my bank
Most consumers don't understand Open Banking
Agree Disagree
11

Market dynamics
• Invisible touch of modern PSPs (Adyen, Klarna, Stripe) has created a smooth
and effortless customer experience. We have seen these players widening
business models into other verticals. Now it's time for 3rd generation PSPs
• Focus on added value in payment (data) analytics for merchants to gain
insights in order to increase profitability and decrease in defaulted payments
(or fraud). Move away from rules based to AI
• Omni channel experiences grow with offline point of sale payment/financing a
big growth driver for traditional payment incumbents
• Consolidation of PSPs will continue and intensify because of the need for
geographic expansion, diversification and to built scale by increasing volumes
Changing the way merchants can use point of sale payment
simplifying payments with latest technology and tools
Omnichannel payments in a single platform with focus on
data and insights generated.
Key takeaway
• Omnichannel payments and POS innovation will be where most of the
innovation (and consolidation) will happen with data insights at the center of
this approach
Payments: Consolidation continues and
differentiation is needed
SME lending: Ripe for consolidation
Market dynamics
• Winners in the SME-lending space in Europe have been determined.
Challenger leasing and factoring platforms not as mature as unsecured SME-
lenders. We expect increased attention in this area.
• $2.6 trillion ‘funding gap’ and need for competition after crisis in the space
gave way to new types of SME-lenders. The question remains whether new
financing options can change access to funding for SMEs
• Lack of historical loan data makes entering the market difficult. Finance SaaS to
address funding gap with connected, data-driven platforms leveraging ML
• As SME-lenders attempt to build scale, whole idea of P2P lending has
disappeared with an increase in number and sizes of debt rounds
• Valuation is ambiguous: early stage online lenders valued as software
companies, later stage valued as banks; 1-1.5x on outstanding loan book
SaaS platform enabling banks and lenders to digitise their
SME lending operations
P2P lending platform has lend over $200 million
Key takeaway
• Maturing space with increased entry barriers due to lack of availability of
historical loan data and therefore access to debt funding
12
87
Source: Crunchbase, *Ant Financial excluded due to outlier Source: Crunchbase
0
1
2
3
4
5
6
0
100
200
300
400
2014 2015 2016 2017 2018 YTD
Fundingvolume($bn)
Numberoffundingrounds
Record year of funding in payments
Number of funding rounds Funding volume 0
40
80
120
0
4
8
12
2014 2015 2016 2017 2018 YTD
Numberofdebtdeals
Debtfundingvolume($bn)
Debt funding on the rise
Debt funding volume ($bn) Number of debt funding deals

InsurTech: The intelligent insurer 2.0
Automation: AI-driven productivity
and rise of SME CFO
1
3
Market dynamics
• Fraud management takes the next step as smart algorithm adoption is
increased in underwriting and claims management with particular focus on
data capture across the value chain (eg. imagery)
• Big question marks around usage based models as auto vertical has not be able
to scale gross premiums
• Explosion of data from connected devices will happen and insurers will start to
adjust underwriting criteria. It will not be 100% complete, but the first step
• Talent acquisition amongst insurers as they strive to implement these
technologies in house, and their seriousness will be defined by the AI
organizational structure they adopt
• AI will not touch front facing customers just yet but insurers will spend more $
this year on niche AI solutions than banks
Reinventing on-demand auto, home and cyber insurance for
AXA XL and MunichRe in the US, launching in Europe
ML analytics enhancing marine and motor risk underwriting
Key takeaway
• AI-enabled incumbents to challenge InsurTechs as growth of flexible,
personalized insurance and automation are transforming the industry
Market dynamics
• RPA has infiltrated the enterprise market and this year expect it to make
inroads in the SME market. Pricing has to be adjusted but has competition
amongst RPA vendors increases, SMEs will benefit
• Invoice data capturing, document management/law and customer services
have seen the most attention but finance function is the next to be infiltrated
• Saas CFO transforming SME management tasks with real time, data-driven
insights and solid efficiency improvement. Rise in connected expense, travel
and policy management platforms enabling AI driven insights, lending
capabilities and forecasting
• Global spending on robotic process automation software is estimated to reach
$680 million in 2018 and is on pace to total $2.4 billion in 2022
Bringing ML to solve SME’s cashflow management needs
Virtual CFO and real time accounting platform
Key takeaway
• Process automation to shape the future of Fintech by exponentially increasing
efficiency and accuracy, unlocking data and legacy systems for newcomers and
incumbents
9 10
Source: 1: MunichRe, 2018. Chart: CBInsights, 2018 Source: Gartner, Bettercloud
0%
20%
40%
60%
80%
2017 2018 2019 2020 2021 2022
% businesses estimating when 80% of business apps will be Saas
Fast adoption of Saas focusing on process efficiency
0
40
80
120
0
200
400
600
2014 2015 2016 2017 Jan-Oct 2018
Numberofdeals
Fundingamount($m)
Insurtech funding stable in 2018, expected to accelerate in the next year
Funding amount ($m) Number of deals
13

15
Company
• Jakob Rost, CEO
• Chiragh Kirpalani, CTO
ProductTeam
• Indonesia’s most comprehensive bill payments platform
Headquarters
Indonesia
• Nick Bortot, CEO
• Robbert Bos, CPO
• Mobile stock trading app expanding across EuropeUK
• Andhy Koesnandar, CEO
• Carlo Gandasubrata, Business
• Digital platform making financial products accessible to
Indonesian consumers.
Indonesia
• Adam Posma, CEO
• Automated membership fees collection for sports clubsThomas
Bunnik, CEO
Netherlands
• Ingo Weber, CEO
• Roeland Werring, CTO
• Leading European digital insurance platformNetherlands
• Derk Roodhuyzen, CEO
• Mark van Laar, COO
• Digital car repair and insurance claim platformNetherlands
• Michiel Lensink, CEO
• Joost Schulze, Technology
• Online mortgage adviser making broking digital, personal and
transparent in the Netherlands
Netherlands
• Sergio Pozo Hidalgo, CEO
• Eduardo Leon, CTO
• Software enabling DevOps to launch compliant applications
instantly
Spain
Gibraltar and Germany
UK
• William Reeve, CEO
• Tom Mundy, COO
• Donovan Frew, CTO
• SaaS platform making renting simple and transparent for everyone
involved - agents, landlords and tenants.
• Jokob Drzazga, CEO
• Asset trading platform seamlessly and transparently connecting
cryptocurrencies with real world assets.
• Laurens Groenendijk, CMO
• Maarten Engelen, CTO
Netherlands
• The Low Power Global Area Network focusing on one-way, low
power, low cost IoT connectivity to benefit larger enterprises
Finch Capital investments

Finch Capital investments
Company Team Headquarters Product
• Jaidev Janardana, CEO UK • Largest European peer-to-peer lending platform
• Ishaan Malhi, CEO
UK
• First online mortgage broker in the UK
• Aleksandar Vidovic, CEO
• Dorian Selz, CEO
• Patrice Neff, CCO
• Toni Birrer, CTO
Switzerland
• Automated fraud detection and prevention software
• Cognitive insights engine enabling companies to turn meaningless
data into actionable insights
• Krik Gunning, COO
• Chris van Straeten, CFRO
Netherlands
UK
• Automated platform allowing financial institutions to manage
multiple term deposit accounts and optimize KYC processes
UK
• Thomas Bunnik, CEO Netherlands • Digital wealth management platform. Acquired by Binck
• Anurag Jain, CEO
• Ajay Goyal, CTO
US
• Global hub for cross-border purchase of prepaid mobile airtime
and money remittance
Republic of Ireland
• Finance company providing professional-grade trade finance to
SMEs across Europe through a network of partner brands
• Brian Norton, CEO
• Jay Verjee, Co-founder
Indonesia • Leading processor and redemption network of branded currency
• Digital tax advisor that offers online tax preparation services
• CDN and DNS performance analytics simplifying monitoring of
global and distributed network applications
• Revolutionizing expense management and business travel for
corporations and SMEs
• Antonius Taufan, CEO
Poland• Dmitriy Akulov, CEO
• Indrasto Budisantoso, CEO
• Mart Abramov, CEO
• Dan Karger, CTO
• Kaupo Kõrv, Design
Singapore
16

1
2
3
4
Poland & CEE: Poised to become a key EU hub5
6
7
8
9
10
Germany: Joining the AI battle
Switzerland: Moving away from just crypto valley
Netherlands: Adyen can give rise to the next generation of entrepreneurs
Ireland: Focus on growing local ecosystem and potentially capitalize on Brexit
UK: Brexit worries starting to creep in
France: Government boost paying off, especially in AI and B2B
Nordics: Denmark catches up to Sweden but Finland has work to do
Indonesia: Race to bank 265m consumers with increasing unicorn involvement
Singapore: Growth driven by strong B2B and blockchain activities
2019 State of the Unions
11 Philippines, Malaysia, Vietnam, Thailand: Competing to catch Indonesia
12 Middle East: Regulatory sandboxes and availability of financing key to success

18
FinTech activity
• Brexit or not, UK will continue to be the leader for FinTech. That said, there are
credible fears around the deal making community. You are seeing smaller
checks and people are happy to take the wait and see approach
• Biggest question around passporting: Revolut, Monese could have implications
on HQ and operations
• The FCA continues to get it right. The regulator is frank, open and supports
startups. It probably needs a push on open banking and real estate innovation
• 2 big IPOs this year (Funding Circle and Purplebricks)
Which sectors are hot
• Challenger banking: With Monzo, Oak North, Revolut, Monese all raising this
year, expect lots of momentum (and consolidation) in the next 12 months
• PropTech: UK in the biggest real estate market in Europe and no surprise we
continue to see strong dealflow here. Focus shifting to commercial RE slightly
Most talked about FinTech startup
Having raised over £150m including £20m from consumers, 2019
will be the defining year for the business model
Key takeaway
• Lots of shouting about the next financial hub, but London is not going
anywhere anytime soon but there will hesitation until March at the very least
FinTech activity
• Still lack of late seed/Series A capital in the country but government is taking
an active role in changing that
• No lack of multinational back office growth with Facebook, Google and many
others. Key to transformation will be middle and front office jobs
• Albeit not FinTech, Intercom is the latest example of Irish founders building
unicorn status globally
• Payments/FX DNA from Stripe/CurrencyFair transitioning into consumer
designed enterprise solutions (Intercom, Teamwork)
• Dublin is and will remain at the epicenter of this with over 1,000 startups and
20% of them having attracted €1m or more in funding
• RegTech: 6 out of top 100 firms based in Dublin as customer data trust is key
for this industry to flourish and Dublin provides that history
• SME lending: One of the largest SME financing credit gaps as banking center
has become conservative
Dublin’s answer to Transferwise, with focus on B2B
Key takeaway
• Expect Dublin to become the go to call for Asia/Middle-East expansion into
Europe but early stage financing gap needs to be addressed
UK: Brexit worries starting to creep in
Ireland: Focus on growing local ecosystem and
potentially capitalize on Brexit
1 2
Source: Fintech GlobalSource: Fintech Global
Marketplace lending,
19%
Wealthtech, 16%
Insurtech, 14%Regtech, 12%
Infrastructure &
enterprise software,
11%
Payments &
remittances , 9%
Real estate, 8%
Other, 11%
Marketplace lending continues to attract investment
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017
Larger deals in the FinTech landscape in Ireland
Less than $1m $1-5m $5-10m $10-20m $20m and above

Switzerland: Moving away from just crypto valley
4
Fintech activity
• Growing European hub with strong financial services industry. Ecosystem, English
language skills and geographical positioning within Europe attracts business
• Amsterdam ranks third in Europe for funding in FinTech
• Regulatory agencies are looking at UK and Singapore regulators to increase
competitive position as a FinTech hub.
• Payments remains strongest represented Fintech vertical with Adyen, Payvision
and lots of initiatives in the Seed/Series A stage. Adyen’s recent IPO will give
further rise to next generation payment service providers
• Close to 500 active FinTech businesses. Approx. 50-60% Seed deals
• Because of relatively small domestic market software businesses that can easily
expand across geographies hold an advantage to scale and receive funding. The
chances of a local lender or challenger bank finding international traction more slim
• IoT, payments, trading and local SME financing
Cloud-based core banking engine working with Aegon
Key takeaway
• Payments space remains the strongest vertical in the Netherlands, Adyen’s IPO
expected to give rise to others offering value-added services and software
Netherlands: Adyen can give rise to the
next generation of entrepreneurs
3
Fintech activity
• Remains the most important technology segment for the country with over 250
businesses particularly in the wealth and AI software verticals
• Last year we saw the emergence of crypto valley, but focus shifts to growth of
other verticals as FINMA starts to take more active role in ecosystem
• One of the few countries that has granted a license to a cryptocurrency fund
provider (Crypto Fund)
• M&A activity particularly in financials with Avaloq and SIX buying $ billion
businesses
• Wealth management platforms as customers are concentrated in Switzerland
• Hothouse for cryptocurrency and blockchain. One of the world leaders in ICOs
Just raised a large round from Index. Over 900 customers
including financial institutions use this platform to enable their
employees reduce IT headache
Key takeaway
· Stable political ecosystem will further contribute to additional partnership
between the Swiss market and the FinTech ecosystem
Source: Switzerland Global Enterprise 2018
0
150
300
450
600
0
40
80
120
160
2014 2015 2016 2017 2018 YTD
Dealvolume($m)
Numberoffundingrounds
Funding volume decreases
Number of funding rounds Total deal volume ($m)
Investment
management, 24%
Bank infrastructure,
22%
Savings deposits &
credits, 15%
DLT, 15%
Payments, 12%
Analytics, 12%
Diversified Swiss Fintech landscape
Source: Crunchbase 19

20
FinTech activity
• German government has pledged over €3 billion to AI by 2025 and while some
have questioned the lack of magnitude of the amount, it represents a start
• 700+ Fintech startups based in Germany, which represents an increase of 32%
since 2015 - which will further drive a huge talent pool
• While Berlin continues to be Germany’s most prominent fintech hub, Hamburg
and Frankfurt are on the rise to take a piece of the market share
• Fintech to become the number one investment focus in Germany over the next
coming years particularly in the banking infrastructure vertical
• Digital payments is the dominant segment with around EUR 110 billion in
revenue
• Banking infrastructure players
The challenger bank has now set its sail on dominating the rest of
Europe with launches in UK, France, Italy
Become the clear leader in the Banking-as-a-Service vertical, but
some question marks as challengers emerge
Key takeaways
• Germany has caught up with France and UK in terms of funding attractiveness
particularly in the banking and payments infrastructure. We expect to see two
unicorns emerge from the region this year
Germany: Joining the AI battle
6
FinTech activity
• Poland is characterized by a strong developing start-up community. Many
initiatives such as Google Campus, Government funding and large pool of tech
talent have enriched the landscape
• Deal activity is strong but small ticket sizes. Government programs have
helped boost seed investments. Companies that are ready for the next step
struggle to raise series A
• AI jobs have the ability to transform region. It is clear if you are building
enterprise software companies you have to be US focused
• 2019 will bring the Polish ecosystem closer to inflection point. Poland is no
longer considered as a ‘developing’ economy, government efforts of boosting
the eco-system will start to pay off and we will see further increased interest
from international investors
• Consumer credit: Poland is the largest market in CEE with strong adoption
• AI/Deep tech: No 1 ratio for software AI job demand globally and expect to
see a strong ecosystem brewing
Consumer financing using advanced scoring techniques and
enabling paperless applications
Key takeaway
• The ecosystem has developed a sophistication in terms of building global
leaders while taking advantage of local talent
Poland & CEE: Poised to become key EU hub
5
Source: Fintech Global 2018
0
40
80
120
160
0
40
80
120
160
2014 2015 2016 2017 2018
Totalnumberofdeals
Numberofseeddeals
Seed dominance
Number of seed deals Total number of deals
0
20
40
60
80
0
200
400
600
800
2014 2015 2016 2017 2018 YTD
Numberofdeals
Fundingamount($m)
Germany FinTech Investment, 2014 - Q3 2018
Amount ($m) Number of deals
Source: Crunchbase

FinTech activity
• In the past year the landscape has grown to 350+ FinTechs, InsureTechs and
RegTechs - some of this growth is still attributed to President Macron who will
pursue his efforts throughout his mandate
• France’s tech worker population grew at the fastest rate of any European
country in 2018 we expect that this growth will persist
• International rollout for startups is limited due to cultural barriers - however,
we expect a greater internationalization in the coming years due to capital
inflow from foreign later stage investors
• Public awareness and language will continue to be a challenge, resulting in low
Fintech solution adoption rates
• French FinTechs are offering more broad services with more pronounced
components such as AI, Blockchain, and IoT
• Insurtech is experiencing growth, Data science has become a powerful tool
Qonto is the ideal banking alternative for freelancers, startups
and SMEs
Alan is a digital health insurance platform with a focus on
UX with an excellent price-quality ratio health plan
Key takeaways
• Brexit to focus attention on France as investors and financial firms balance their
European strategies to Paris because it is a complete innovative financial center
France: Government boost paying off, especially in AI
and B2B
7
Source: Dealroom, Fintech Global 2018
FinTech activity
• Twelve unicorns created, with a combined value of $69 billion; ranking 3rd in
Europe by this metric
• Emerged as top tier VC hub, as investment per capita highest in the region
• Fintech remains concentrated in Sweden and Denmark. We have not seen
Finland create much value in the FinTech vertical
• Local venture community is very successful (Northzone, Creandum, EQT)
• Large jump in later stage deal value as Series B’s touching $20m +
• Payments & lending: Strong data and credit benchmarking has led to cashless
technology being accelerated in the region
The leader in buy now pay letter tech. Having already seen
the acquisition of iZettle, Klarna remains Sweden’s payment
sweetheart
Key takeaway
• Sweden no longer most dominant country in FinTech in the Nordics
Nordics: Denmark catches up to Sweden, but Finland has
work to do
8
0
2
4
6
0
200
400
600
2014 2015 2016 2017 2018 YTD
Fundingvolume($bn)
Numberofdeals
Funding volume doubled
Number of funding rounds Funding volume ($bn)
Source: Fintech Global 2018 21

22
FinTech activity
• Consolidation of Singapore’s position as leading hub in the international
Fintech landscape, with focus on B2B solutions driven by corporations and FIs
• Solid increase in fund volume and USD 5bn unlocked for PE and VC
investments to accelerate tech sector growth
• Singapore remains a safe haven and springboard into the region, where most
start-ups set up topcos
• MAS drives regulatory transformation in SEA. Development of Fastrack
Fintech sandbox and collaboration with regulators to align policies
• Development of cybersecurity and blockchain innovation centre
• Investment/wealth, payments and lending remain strong, despite regulatory
limitations applied to mobile wallets to control lending activities
• Growth expected in Insurtech, data analytics and RegTech, supported by MAS
• Blockchain innovation with established ecosystem and launch of Project Ubin
SME lending platform expanding across SE Asia
P2P SME lending platform with over S$200 million processed
Key takeaways
• Singapore and Indonesia-based FinTechs are racing to conquer other Southeast
Asian markets
Singapore: Growth driven by strong B2B
and blockchain activities
10
FinTech activity
• Payments and consumer and business lending growth is accelerating,
supported by high usage of mobile phones
• Financial inclusion is progressing gradually, with 49% of the population
having access to financial services. Loan and credit card penetration remain
limited, at 17% and 4%1
• Availability of early stage capital is improving, leading to valuation increase
• Payment landscape evolving rapidly with tech players like Grab, Go-Jek and
Tokopedia adding payment and lending offerings with Fintech partners
• P2P lenders diversifying funding sources with institutional capital to scale up
• Evolving regulatory environment, with introduction of strict lender licensing
rules by OJK. Crackdown on high interest lending and consolidation expected
• Payment and lending remain core Fintech sectors, some consolidation expected
• Increasing diversification with rise of SME solutions, Insurtech and Proptech
Mobile point of sale payments for SMEs
Peer-to-peer lending marketplace for SMEs
Key takeaways
• Expect strong growth across FinTech sectors, with increasing diversification
beyond payments and lending solutions. Indonesia to lead in Southeast Asia
with the higher number of unicorns
Indonesia: Race to bank 265m users with increasing
involvement of tech unicorns
9
Source: Chart: CB Insights, 2018Sources: 1:FintechNewsSG and interviews, 2018. Chart: FintechnewsSG, 2018
Payment, 38%
Lending, 31%
Finance, 8%
Comparison, 7%
Insurtech, 6%
Crowdfunding, 4%
POS, 3%
Crypto/Blockchain,
2% Accounting, 1%
Payment and lending still represent the vast majority of Fintechs
0
20
40
60
0
500
1000
1500
2014 2015 2016 2017 2018 YTD
Singapore leads innovation in SEA, funding volume grows steadily
Volume Number of deals

23
Fintech activity
• Vietnam considered the highest potential Southeast Asian Fintech market after
Indonesia and Singapore. Vietnamese ecosystem developing, with entry of
Singaporean and Indonesian Fintechs in the local market in early 2019
• The Philippines are following in Indonesia’s tracks, as Fintech funding
accelerated in Q4 and is expected to continue, led by payments and lending
• Fintech activity in Malaysia was slower than expected in 2018, and is expected
to pick up pace as start-ups start maturing and financial inclusion increases
• Growth of SME-targeted payment platforms with comprehensive solutions
including reporting, inventory management, loyalty
• Fintech sandboxes developing across the region, following MAS’ initiatives
• Lending and payments continue to be the leading Fintech themes in the region
• Finance, wealth management and insurance solutions are emerging
• Partnerships with e-commerce and tech groups are needed to gain scale
Most talked about Fintech startup
SME lending platform in the Philippines
E-wallet and payment app in Vietnam
Key takeaways
• Vietnam, Philippines to compete for title of most attractive Southeast Asian
Fintech market after Singapore and Indonesia. Growth continues, fueled by
B2B2C models, with increasing diversification beyond payments and lending
Philippines, Malaysia, Vietnam, Thailand :
Competing to follow Indonesia’s lead
11
Fintech activity
• UAE continues leading FinTech transformation, with a third of start-ups in the
Middle East and the support of its regulatory sandbox and Hive accelerator
• Development of FinTech hub in Bahrain, developing ecosystem and regulatory
sandbox. Saudi Arabia, Lebanon, Jordan and Egypt follow, creating alliances
• Early stage capital is increasingly available, filling funding gap and resulting in
investments in Gulf Fintechs expected to reach $2bn in the next decade1
• Adoption driven by smartphone penetration, high in most Gulf countries but
moderate in Saudi Arabia and Lebanon, and low in Egypt
• Continuing traction in payments and lending, enabled by AI and data analytics
• Collaboration between regulators across the Gulf would facilitate expansion
• First wave of start-ups in payments and lending represent half of the market
• Increasing focus on B2B solutions to service the GCC’s financial institutions
• Diversification with insurance, wealth management and blockchain offering
Most talked about Fintech startup
Payment processing, fraud prevention for corporates and SMEs
Human resources and health insurance solutions for SMEs
Key takeaways
• Expect Dubai and Bahrain to follow the roles played by HK and SG in SE Asia.
Future leaders to arise in Proptech, Insurtech, SME. Opportunities to support
digitalization and automation of financial services and blockchain initiatives
Middle East: Regulatory sandboxes and availability of
financing in Gulf support growth and diversification
12
Source: 1MRP, 2018Sources: Chart: UOB and Tracxn, 2018
0
100
200
300
2010 2015 2020
Number of Fintech companies in MENA
MENA Fintech ecosystem growth to reach 300 start-ups by 2020
Singapore, 49%
Indonesia, 40%
Philippines, 6%
Malaysia, 3%
Thailand, 2%
Vietnam, 1%
Singapore, Indonesia lead growth. Philippines, Vietnam catch up

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