1) FinTech has grown significantly in recent years, producing many unicorns and scaling startups faster than ever due to mobile/cloud technologies and APIs. 2) However, FinTech still only comprises around 20% of the large US GDP in financial services, indicating there is still significant room for growth. 3) A new API-enabled financial services stack is emerging that will allow startups to quickly launch new offerings, cementing their role in delivering financial services.

1. 0
Will the FinTech ride continue?
T h e 1 0 - m i n u t e k e yn o t e f o r
F i n Te c h S a n d b o x D e m o D a y ( N Y C )
D a v i d J e g e n
P a r t n e r, F - P r i m e C a p i t a l
A p r i l 2 0 1 8

2. 1

3. 2
FINTECH PORTFOLIO
Capital Markets
Wealth Management
Lending
Insurance
Payments
ENTERPRISE PORTFOLIO
DevOps SaaS/ Enterprise
Data analytics
Security
HEALTHCARE PORTFOLIO
Healthcare IT Medical devices/tools Therapeutics
NOTE: NOT EXHAUSTIVE

4. 3NOTE: FINTECH INVESTMENT INCLUDES ALL VC STAGE FINANCINGS, INDUSTRY: FINANCIAL SERVICES, VERTICALS: FINTECH
SOURCE: PITCHBOOK; TEAM ANALYSIS
FinTech was not always so exciting
Past Present Future

5. 4INCLUDES VENTURE-BACKED FINANCIAL INSTITUTIONS, FINANCIAL MANAGEMENT SOFTWARE, AND FINANCIAL SERVICES SOFTWARE; GREENDOT FIRST IPO
SOURCE: DOW JONES VENTURESOURCE; CAPITALIQ; TEAM ANALYSIS
FinTech meant selling Tech to Financial Institutions
1,000
0
2,000
5,000
4,000
3,000
6,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Exit Value
Revenue
$606M
$380M
/ Exit Value
Revenue
$636M
$232M
Exit Value
Revenue
$1B
$93M
IPO
Exit Value $3B
Revenue $493M
Exit Value
Revenue
$508M
$166M
/
Exit Value
Revenue
$1.5B
$104.8M
/ /
IPO
IPO
/
Exits by Theme: Electronification Online Brokerage Payments
Exit Value $1.5B
Revenue $377MExit Value $625M
Revenue $159M
/
Exit Value $50M
Investments Exits

6. 5SOURCE: GIGAOM, CAPITALIQ, OLIVER WYMAN, PROGRAMMABLE WEB, F-PRIME ANALYSIS
2012 inflection in mobile, cloud and APIs
Mobile + Cloud Computing
Era
1st iPhone
Netflix moves to
cloud with AWS
1st Android
phone
Facebook
mobile
launch
AWS
launched
AWS revenue
Active smartphones
FB Mobile monthly
active users
Cumulative FSI APIs, 2005-2017
792x
New APIs since 2011, by Sector
The API Economy
Present

7. 6SOURCE: COMPANY REPORTS / WEBSITES; F-PRIME ANALYSIS
CAC = CUSTOMER ACQUISITION COST
FinTech startups scaled faster than ever
~$10 - $20 CAC
0 20 40 60 80 100 120
1,500
1,000
2,000
500
0
3,500
2,500
3,000
Users (K)
Months after launch
~$500 - $1,000 CAC
Present

8. 7
ILLUSTRATIVE: INCLUDES COMPANIES NO LONGER PRIVATELY HELD. LOVELY UNICORN BORROWED FROM ANONYMOUS AUTHOR, BUT ATTRIBUTION NOTED
Producing an unprecedented number of Unicorns
Banking
InsurancePayments
Lending
Accounting
Investment Real Estate
Other financial
services
Present

9. 8
Will the FinTech party
continue?
Future

10. 9
*FIRE = FINANCIAL SERVICES, INSURANCE AND REAL ESTATE.
SOURCE: FRED
20%
Future
Financial services comprise 20% of US GDP –
FinTech startups have room to grow

11. 10
A new API-enabled financial services stack is emerging –
cementing startups’ ability to launch quickly
Customer
Interface
Data Access
Market
Infrastructure
Transactions
IT Infrastructure
Middle / Back
Office
Banking /
Payments
Capital Markets
FinancialServicesStack
Apex today, but not long term
Future

12. 11
And we have barely touched market infrastructure
Customer
Interface
Data Access
Market
Infrastructure
Transactions
IT Infrastructure
Middle / Back
Office
Banking /
Payments
Capital Markets
FinancialServicesStack
Apex today, but not long term
Stellar Ripple 0xEthereum
Future

13. 12
Software eats financial services – extending and
embedding FinTech into new industries
Data Access
Market
Infrastructure
Transactions
Middle / Back Office
FinancialServicesStack
Healthcare
Restaurants
HealthcareReal estate
Decentralized IT
infrastructure
APIs
Future