2023年金融科技报告

StateofFintech2023StateofFintech

TeamDavidJegenManaging

Partner,TechFundJohnLinPrincipalRocio

WuPrincipalAbdulAbdirahmanSenior

AssociateLearnmoreaboutF-Prime:VisittheFintech

IndexformoredataEmail:fintechindex@Discussion:March

9,

2023

Noon

ETSarahLamontAmitRameshData

ScientistZoeyTangMBA

Associate,

Fintech

IndexAssociateContentsISummaryF-PrimeFintech

IndexPage

4IIPage

5III

Fintech

IndustryDynamicsIV

2023Fintech

TrendsPage

17Page

27Page

28Page

35VFintech

Benchmarks:by

verticalVI

F-Prime3SummaryThecorrection・

Fintechwasonfirein2021,with77publiclistings—includingeightoflargest10fintechexitsinhistory・

However,in2022publicinvestorsre-appraisedmanyfintechcompaniesbyprioritizingcapitalefficiency,andshiftingtheirvaluationmultiplesfromSaaSto

traditionalfinancialservicesbusinesses・

Macroeconomicuncertaintyaboundsandrisinginterestrateswillhelpsomebusinesseswhilehurtingothers・

TheF-PrimeFintechIndexwasdown72%for2022,withtheaveragecompanyintheIndexfalling56%duringtheyear・

In2022thereweresixnewadditions(AvidXchange,Bakkt,Dave,Expensify,NerdWalletandNubank)to

theFintechIndex

andsixdelistings-threeexiteddueto

acquisitionsandthreefelloutbasedonourindex

criteriaWhat’s

next・

Thepublicmarkethasbegunto

distinguishtech-enabledversionsofexistingfinancialinstitutionsfromtrulydisruptiveapproachesto

financialservices・

Somefast-growingneo-banks,lenders,andwealthmanagementfirmswillrivalincumbentsovertime;however,embeddedfintechbusinessmodelswillprovemostdisruptive・

Inaggregate,fintechcompanieshavecapturedlessthan10%offinancialservicesrevenuewithpaymentsmakinginroads・

FintechIndexcompaniesgrewLT

Mrevenue48%onaverageandhavecollectivelyadded$19Bofrevenue(+15%)injustthefirstthreequartersof2022・

We’rereleasingvertical-specificbenchmarksto

betterdistinguishandevaluatediversefintechbusinessmodels・

We

highlightseveralinterestingtrendsthatwearetrackingin2023-ifyouarebuilding/investinghere,

let’s

connect!4F-Prime

Fintech

IndexF-Prime

Fintech

IndexOverview55TheF-PrimeFintechIndexcomprisesthefollowingemergingfinancialtechnologycompanies.Criteriaincludecapitalization,liquidity,growthrates,foundingyearandlistingexchange.Companies$397BMarket

cap$76.5BRaised3.7xRevenue

multiple48%LTM

avg.

revenuegrowthrateSource:

CapitalIQ,PitchBook,Yahoo

Finance,F-Primeteamanalysis2022

Additions

2022

ExclusionsNote:

Allfiguresasof12/31/20226Afterhittingapeakof$1.3T

inlate2021,theF-PrimeFintech

Indexdeclinedto$397Bby

December31st,2022$1,400B$1,200B$1,000B$800B$1.3T+MARKETCAP(peak)$600B$400B$397BMARKETCAP(~$850Bdecline)$200BQ12015Q32015Q12016Q32016Q12017Q32017Q12018Q32018Q12019Q32019Q12020Q32020Q12021Q32021Q12022Q32022Q42022Source:

CapitalIQ,Yahoo

Finance,F-PrimeteamanalysisNote:DuetofactthatFintechIndexismarketcapweighted,theperformancedeclineinthenextslidewillbehigherthanthecapitalizationdeclineabove.42%

CAGR7Whilethepublicmarket

correctionhasbeenbroad,tech

andfintechstockshave

seenthelargest

declines—theFintech

Indexwas

down72%in20221,750%1,703%1,590%1,500%1,250%1,000%750%500%FintechIndexoutperformsS&P500by250%173pp01-01-2015

01-01-201601-01-201701-01-201801-01-201901-01-202001-01-202101-01-202212-31-2022EMCLOUD:

315%FINTECH:

260%NASDAQ:

121%S&P

500:

87%8Thedeclineisespeciallypronouncedfor

the10largest

exitsduringthepeakyears

of2020-2021$100.0$90.0$80.0$70.0$60.0$50.0$40.0$30.0$20.0$10.0$85.8$77.8$8.0$220B+cumulativemarketcap

declinefromtop10recentexits$41.5$37.0$32.0$22.5$19.0$20.4$20.0$9.4$32.6$4.4$24.8$7.2$13.6$6.6$13.8$4.3$14.3$3.3$11.9$2.8$15.8$4.6JAN2021JUL2021JAN2021JUN2021JUN2021SEP2021JUL2021DEC2020DEC2021APR2021INITIAL

EXIT

VALUATION

(i.e.

IPO)12/31/2022

YEAR-END

MARKET

CAP*

For

companiesthatwentpublicin2020onwards,marketcapchangeistrackedfromwhentheywereaddedtoindex(generallyafter90-daysofseasoning).9Whileallverticalshave

declined,paymentsandB2BSaaSfell

theleastB2B

SAASn

=

4PAYMENTSn

=

10BANKINGn

=

6WAMn

=

3LENDINGn

=

4INSURANCE

PROPTECHSTEEPEST

DECLINESPER

SECTOR0%(10%)(20%)(30%)(40%)(50%)(60%)(70%)(80%)n

=

5n

=

4DECLINE(70%)(77%)B2B

SAASPAYMENTS(96%)(83%)(84%)(90%)(95%)BANKINGWAM(39%)56%AVERAGEFINTECHINDEX

CO.DECLINEIN

2022(50%)LENDINGINSURANCEPROPTECH(61%)(78%)(79%)<

DECLINE

THAN

AVERAGE

FINTECH

INDEX>

DECLINE

THAN

AVERAGE

FINTECH

INDEX(85%)(90%)(89%)Note:Companiesthatwereacquiredin2022ordidnotmeetourcriteriaatyear-endwereremovedfortheaboveanalysis.Alllistingaddedtoindexafter90-daysofseasoning.10Despitethevaluationcorrection,Fintech

Indexcompaniescontinuetogrow:collectiveLTM

revenue

isup

~15%(+$19B)from$136Bin2021to$155BasofQ32022$160$155$152$147$136$140$120$100$80$116$12$97$14$61B$75Cumulativerevenueaddedduringquarteroflisting$94B$12$56$60Cumulativeorganic$50$45revenuegrowth(61%)$42$40$40$37$35$33$31$30$26$24$21

$23$20$20$19$18$14

$16

$16$17$9$5$3.2

$3.4

$4.5Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q320152016201720182019202020212022NEW

REVENUE

ADDED

DURING

QUARTER(from

public

listing/seasoning)EXISTING

REVENUE(including

organic

growth

in

quarter)Source:

CapitalIQ,F-Primeteamanalysis11Even

scaledfintechcompaniesare

stillgrowingathighrates30025020015010050TOP

5

CONTRIBUTORS

TO

$19BREVENUE

INCREASE

TO

Q3

20222022

REVENUEADDED

/

DECLINE

RATE

(LTM)GROWTHCOMPANY143%$8,511$2,596$1,977$1,682$1,680272%54%75%10%117%48%AVG.

LTM

REVENUEGROWTH

OFFINTECH

INDEX72%59%54%48%COMPANY0-50163%FINTECH

INDEX

COMPANIES

WITH

>$5B

MARKET

CAP

AND

>48%

LTM

REVENUE

GROWTHSource:S&PCapitalIQ,F-PrimeteamanalysisNote:ThecompaniesincludedintheaboveanalysisaretheF-PrimeFintechIndexCompanies12Fintech

companiesenjoyedhistoricallyhighvaluationsin2021,buthave

fallenbelowhistoricmeanvaluationmultiples30.0x26.8x25.0x21.7x22.6x20.0x15.7x14.6x15.0x10.0x5.0x12.2x14.1x13.6x12.0x14.6x8.2x8.8x8.7x6.6x7.0x6.2x4.7x4.0x3.8x3.7x2.6x4.0x3.5xQ1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4Q1

Q2

Q3

Q420152016201720182019202020212022AGGREGATELESS

THAN

20%

(LTM

growth

rate)BETWEEN

20-40%

(LTM

growth

rate)GREATER

THAN

40%

(LTM

growth

rate)Source:

CapitalIQ,F-PrimeteamanalysisNote:ThecompaniesincludedintheaboveanalysisaretheF-PrimeFintechIndexCompanies13Thoughsignificantacquisitionsoccurred,overall

M&Avolume

droppedasbuyersandsellersadjustedtonewvaluationexpectationsFintech

M&Avolumedropped30.5x$30from~$350Bin2021to~$116Binthefirstthreequartersof2022$20$10$08.5x$29B10.1x9.2x7.3x5.3x4.4x60.0x4.9x1.4x$13.1BQ2$8.4BQ3$8.0BQ4$4.0BQ3$2.6BQ2$2.2BQ1$2.2BQ1$1.8BQ2$1.8BQ1Q1TARGETACQUIRERSource:

PitchBook,FTPartners,F-PrimeteamanalysisNote:allrevenuemultiplesapproximateBUYOUT/LBO14Publicmarket

correctionsare

directlyimpactingtheprivatemarkets,

startingwithlater-stagefinancings;somefintechbreakoutshave

raisedstunningdownroundsVC-BACKED

FINTECH

COMPANY

PRE-MONEYVALUATIONLARGEST

DOWN

ROUNDS

&

VALUATION

CUTS$95.0B(3/21)$1,750$1,500$1,250$1,000$750$45.6B(6/21)$1,516$40.0B(1/22)$68.4B(7/22)$11.0B(12/22)$6.7B(7/22)$1,000PRE-DOWN

ROUND

VALUATIONPOST-DOWN

ROUND

VALUATION$825$600LARGEST

UPROUNDS$20.0B(2/22)$500$422$250$12.3B$12.1B(1/22)(5/22)$101$0Q42013

2014

2015

2016

2017

2018

2019

2020

2021

2022$430M(2/20)$7.8B(4/21)$5.5B(7/21)SEEDSERIES

BSERIES

CSERIES

DSERIES

ESERIES

APREVIOUS

ROUND

VALUATIONMOST

RECENT

VALUATIONSource:PitchBookandF-PrimeteamanalysisNote:Largestuproundsexcludescompaniesthatraisedin2022andarenolongeroperational,aswellascompaniesthatsubsequentlyraisedatlowervaluations.15Despitethecorrection,thereisstillreasonforexcitement—fintechcompanieshavecaptured

lessthan10%ofUS

industryrevenue

withtremendousroomforgrowth1.0%0.6%0.4%100%90%80%70%60%50%40%30%20%10%6.3%4.8%4.8%93.7%95.2%95.2%99.0%99.4%99.6%INCUMBENTSDISRUPTORSPAYMENTSBROKERAGESPROPTECHLENDINGINSURANCEBANKINGSource:

IBISWorldIndustryReport,Company10Ks,Newsoutlets,F-Primeteamanalysis16Fintech

IndustryDynamicsPublicinvestors

have

re-appraisedfintechcompaniesacrosstheboardEV/LTM

revenue

multiple71%20.4drop

inaverage14.8multiples13.012.68.86.95.94.64.23.41.41.31.2INSURTECH0.5B2B

SAASPAYMENTSBANKINGLENDINGWEALTH/ASSET

MGMTPROPTECHMORE

RECURRING

REVENUEMORE

TRANSACTION

REVENUEQ4

2021Q4

2022Source:S&PCapitalIQ,F-PrimeteamanalysisNote:For

consistency,weusedthesamecompaniesintheindexinQ42021(excludingnewadditionsto

F-Prime

Fintech

Indexin2022)18Fintech

companiesare

nowvaluedmorelike

incumbentsand,insomecases,atadiscountgiven

theircapitalinefficiencyEV/LTM

revenue

multiple14.813.012.65.34.64.23.93.22.92.42.21.420.4Q4

2021Q4

2022Q4

2021Q4

2022Q4

2021Q4

2022PAYMENTSBANKINGLENDING13.96.5

6.9Q4

20228.8Q4

2021B2B

SAAS5.95.15.34.64.31.33.42.6Q4

20212.41.20.5Q4

2021Q4

2022Q4

2021Q4

2022Q4

2022WEALTH/ASSET

MGMTPROPTECHINSURTECHSource:S&PCapitalIQ,F-PrimeteamanalysisINCUMBENTSDISRUPTORSNote:For

consistency,weusedthesamecompaniesintheindexinQ42021(excludingnewadditionsto

F-Prime

Fintech

Indexin2022).Compositionofincumbentlistbasedonpublicfinancialservicescompanieswithhighestmarketcappervertical.For

banking,lending,andwealth/assetmanagement,incumbentmarketcap/LTM

revenuemultipleisused.19We

saw

asimilarre-appraisal

occurwithearlierfintechIPOs.It

was

permanentforsome,andtemporaryfor

others.Some

private

valuations

quickly

correct

when

revalued

as

financial

services

companies…IPO

2014IPO

201812111098765431614121082.52.01.51.00.51614121089.18.46.41.4

1.41.21.11.04.6

4.53.6662.50.54420.3210.20.520.10.10.1

0.30.0

0.00.00.0SRS

SRS

SRS

SRS

SRS

IPO(2014)1Q2Q3Q4Q5Q6QSRS

SRS

SRS

SRS

SRS

IPO1Q2Q3Q4Q5Q6QABCDEABCDE(2018)POST

IPOPOST

IPO…others

prove

genuine

market

disruption

and

grow

into

their

private

market

valuationsIPO

2015IPO

2015987654321543216543212118151296.05.83.64.7

4.74.64.32.73.62.62.43.32.11.91.82.661.61.030.30.20.00.0SRS

SRS

SRS

SRS

SRS

IPO(2015)1Q2Q3Q4Q5Q6QSRSASRSBSRSCIPO(2015)1Q2Q3Q4Q5Q6QABCDEPOST

IPOPOST

IPOSource:PitchBook,S&PCapitalIQ,F-Primeteamanalysis20Beyondthevaluationre-rating,theshiftingmacroenvironmentisplacingapremiumoncapitaleff

iciency.

Risinginterestrateswillhelp

someandhurtothers12.0%10.0%8.0%6.0%4.0%2.0%0.0%-2.0%-4.0%-6.0%10.53%8.19%5.69%0.77%4.79%3.41%2.76%0.12%-3.36%Q42015Q42016Q42017Q42018Q42019Q42020Q42021Q42022INFLATION

RATESource:

FederalReserveEconomicData(FRED.InflationbasedonConsumerPriceIndex:Total

AllItemsfortheUnitedStates(CPALTT01USQ661S).NominalinterestratebasedonFederalFundsEffectiveRate(DFF).NOMINAL

INTEREST

RATE

(Fed

rate)21Like

theincumbents,bankingandwealthmanagementstartupsthatholdcustomercash

balancesorfloatare

benefitingfromrecentinterestrate

hikes$20,000$17,518$2,926$3,000$2,500$2,000$1,500$100$15,000$10,000$200$13,080$2,030$158$150$128$100$72$63$50$50INCUMBENTSDISRUPTORSQ3

20210.5%Q3

202234%Q3

202147%Q3

2022118%Q3

202151%Q3

202244%Q3

2021Q3

2022102%26%YoY

NET

INTEREST

INCOME

GROWTHYoY

NET

INTEREST

INCOME

GROWTH22Ontheotherhand,proptech

andlendingcompaniesare

exposedtoraterisesandsaw

revenue

growthdeclineduetolower

originationvolume$166$351$350$150$132$300$125$250$100$200$152$75$150$50$100$53$45$50$25$15INCUMBENTSDISRUPTORS$82021-17%2022-51%2021202236%202162%202220212022117%-10%68%38%YoY

REVENUE

GROWTHYoY

REVENUE

GROWTH23Lessthan25%ofFintech

Indexcompanieswere

profitableover

thelast12months—mostlypaymentsbusinesses30%3020100-10-20-30-40-50-60-70-80AVERAGE

LTM

NETINCOME

MARGINMEDIAN

LTM

NETINCOME

MARGINSECTORn5-90-100-110-120-130-140LENDING(3.9%)(9.8%)0.6%PAYMENTSB2B

SAASBANKING(3.6%)199(20.4%)(22.5%)(35.6%)(67.5%)(82.3%)(18.5%)(23.7%)(24.4%)(11.7%)(21.5%)7WAM4-260%-270-280-290PROPTECHINSURTECH56-285%Source:

S&PCapitalIQ,F-Primeteamanalysis24AlmosthalfoftheFintech

Indexcompaniesexpecttobe

profitableover

thenext12months5040302046%100-10-20-30-40AVERAGE

NTM

NETINCOME

MARGINMEDIAN

NTM

NETINCOME

MARGINSECTORn199-50-60-70PAYMENTSB2B

SAASBANKINGLENDINGPROPTECHINSURTECHWAM6.3%4.7%5.2%5.0%-80-90(1.0%)(14.0%)(23.2%)(39.4%)(70.6%)5.1%7(6.1%)(18.2%)(11.5%)(36.1%)5-1005-110-25064-245%Source:

S&PCapitalIQEstimates:aggregateanalystestimatesforpubliccompanies,F-Primeteamanalysis25Themarket

hasbeguntodistinguishbetterversionsofexistingfinancialinstitutionsfromtrulydisruptiveapproaches

tofinancialservicesVERTICALBETTER

VERSIONS

OF

FINANCIAL

SERVICESDISRUPTIVE

POTENTIAL

WE

ARE

TRACKINGDeveloper-friendly,API-firstpaymentbusinesseswillcontinueto

growrapidlyandcapturemeaningfulmarketshareVertical

SaaS

+

embedded

payments

isdifferentiatedfrompurepaymentprocessingandcanbethevertical’soperatingsystemPAYMENTSSuperiorconsumerexperienceprovedneobankscanbebetterandfaster-growingversionsofbanks,butnotexemptfrombank-likereturnsBaaS

offers

true

disruption

to

fintech

stack

andwillfuelrapidgrowthinecosystem,butmustnavigateregulatoryscrutinyBANKINGStartupsfacesmartandconcentratedincumbents,butgenerationaltailwindswillpowersometo

rivallegacyplayersDigitizationofprivate

assets

infrastructure

andriseofemergingalternativeassetclasseslikecrypto,art,wine,etc.WEALTH/ASSET

MGMTINSURANCEBetterUIsandservicebutfewdisruptiveproducts;fastgrowthmeansadverseselection,yetstartupsneeddatato

improveunderwritingUsage-basedinsurancecanleadto

novel

products

that

gobeyond

improved

user

interfaceNoveldatasetsandunderwritingmodelsexpandTAM,

butlikeincumbents,startupscannotavoidcreditriskandcreditcyclesEmbeddedlendingwheresoftware

players

become

lendersas

by-product

ofsoftwareplatformLENDINGDigitizationoftransactionlifecyclecreatesradicallybetterexperiences,benefittingstartupsandincumbentsEvolving

residential

ownership

models

includingsharedandfractionalizedownershipPROPTECH26Fintech

trendswe

are

tracking

in2023PrivateassetPaymentsorchestrationVertical

fintechinfrastructureMerchantsneedto

supportawidervarietyofpaymentoptionswhilecollectingdatasourcesintoasingledecisioningandfrauddetection/preventionengineMoreverticalsoftwarecompanieswillemergeandseamlesslyofferembeddedfintechsolutionslikepayments,credit,payroll,andmoreInfrastructureanddistributiontoolstofacilitategreateraccessanddatainsightsinthealtsassetsspaceNovel

consumerdataAPIsInstantpaymentsrailsCryptocomplianceIncreasingaccessibilityofconsumers’financialdataacrossplatformswillgiveriseto

morepersonalizedfinancialproductsSignificantgrowthinreal-timepaymentsglobally.Manyopportunitiesexistforfintechsto

buildreal-timefrauddetection,chargebackfacilitationandon/offrampsFollowingayearoffraud,hacks,andvolatility,regulatorswillstepintoensuresecurityistopofmindforallcryptoparticipantsTrice27Key

Fintech

Benchmarks:

by

verticalBroader

set

of

benchmarks

to

be

added

toFintech

Index

websiteKey

paymentsbenchmarksDISRUPTORSINCUMBENTMETRIC

1:

TOTAL

PAYMENT

VOLUME$3,000$3,000B$1,340$1,000B$500B$779$669$230$19721%$19017%$11262%$11034%$91$83$83$68$65$61$50$27$16$9YoY

VOLUMEGROWTH

(%)13%51%84%107%41%46%51%42%25%31%31%30%41%92%15%METRIC

2:

REVENUE

AS

%

OF

TPV8.6%3.8%8.6%GROSS

REVENUENET

REVENUE4.2%2.1%3.0%1.4%3.0%3.0%2.8%1.4%2.7%2.0%2.3%1.3%2.2%1.1%2.0%1.0%1.7%1.1%3.4%1.0%0.2%1.0%0.8%1.0%0.3%0.8%0.5%0.8%0.4%0.5%0.3%0.3%0.1%0.6%0.4%Note:

Netrevenueexcludespaymentexpenses.BlocknetrevenueexcludesBitcoinoperations.METRIC

3:

TAKE

RATE

(gross)7.6%4.2%4.1%2.8%2.6%2.2%2.0%1.9%1.5%1.2%1.1%0.9%0.8%0.8%N/A0.6%0.3%0.2%0.4%Source:

S&PCapitalIQ,Companyannualreport,managementdiscussionandanalysesinvestorpresentation,F-Primeteamanalysis29Key

bankingbenchmarksDISRUPTORSINCUMBENTMETRIC

1:

NUMBER

OF

USERS807066604020198554YoY

USERGROWTH

(%)46%11%11%101%61%-19%5%METRIC

2:

UNIT

ECONOMICS$1,843ARPUCAC$1,012$382$338$297$129Note:

Greendot’suserbasehasbeendecreasingovertheLTM$90$76$24$26$8

$7$9N/AMETRIC

3:

VALUATION

TO

TOTAL

ASSETS1.41.30.60.6Note:

SOFiandNuBank’svaluationsarebasedontheirmarketcap.0.30.20.130Source:

S&PCapitalIQ,Companyannualreport,managementdiscussionandanalysesinvestorpresentation,F-PrimeteamanalysisKey

wealth&assetmanagementbenchmarksDISRUPTORSINCUMBENTMETRIC

1:

USERS150108100503312.22.9YoY

USERGROWTH

(%)21%-35%17%-10%METRIC

2:

AUMNote:

AssetsUnderAdministration(AUA)isdisplayedforallcompanieswiththeexceptionofCharlesSchwabwhereAssetUnderManagement(AUM)isshared.$8,000$6,644$6,000$4,000$2,000$101$65$1YoY

ASSETSGROWTH

(%)-64%-32%60%-13%METRIC

3:

REVENUE/$1

AUM$0.1$.05$0.02$0.00331Source:

S&PCapitalIQ,Companyannualreport,managementdiscussionandanalysesinvestorpresentation,F-PrimeteamanalysisKey

lendingbenchmarksDISRUPTORSINCUMBENTMETRIC

1:

LOAN

ORIGINATIONS$200$179$141$150$100$50$14$14$2YoY

ORIG.GROWTH

(%)-48%55%64%-55%-13%METRIC

2:

AVERAGE

LOAN

SIZE$577,694$600,000$50,000Note:

FundingCircle’saverageloansizeisestimatedbasedonoriginationsdividedbynumberofbusinessesduetodatalimitations$90,000$84,038$9,358$378METRIC

3:

NON-PERFORMING

LOAN

RATIO6.4%3.7%1.2%N/A3.3%32Source:

S&PCapitalIQ,Companyannualreport,managementdiscussionandanalysesinvestorpresentation,F-PrimeteamanalysisKey

insurtechbenchmarksHC

DISRUPTORSINCUMBENTSMETRIC

1:

GROSS

WRITTEN

PREMIUMP&C

DISRUPTORS$250$6$49$5$1$1$1METRIC

2:

PREMIUM

PER

POLICY$8,098$4,781$4,377$3,330$1,837$1,200$343METRIC

3: