payments - Innovalue

payments
Insight. Opinion.
Vol 9
strategiC oPtions For
aCQuirers in a CHanging
marKet enVironment
champion and the specialist (see Chart 1),
whereby the pan-European operator will capture
the largest share of the market.
anDreas HaBersetZer
Partner
COntent
1
strategiC oPtions
FOR aCQUiReRs in a CHanGinG
maRKet enViROnment
The acquiring industry is undergoing dramatic change.
The acquiring industry is undergoing dramatic
change: regulatory initiatives, technological innovation, changing consumer behavior and respective
adjustment of merchant requirements will have
wide ranging implications, including
Andreas Habersetzer analyses the key challenges and
the available srategic options for acquirers.
3
Digital BanKing
a tRansFORmatiOn OF
payments and beyOnd
Payments and overall banking are changing under
industry convergence pressure. Francesco Burelli looks
into one of the key aspects of industry convergence, social
media and its related opportunities and challenges
5
Venture CaPital
increased investment requirements in product
and service offerings and platform capabilities,
accelerated channel convergence
(offline, online, mobile),
intensified pan-European competition
and the need for scale,
changed margin profiles, business and
operating models,
commoditization of acquiring
and ultimately accelerated consolidation in
a still highly fragmented industry.
In this changing environment, acquirers face
significant challenges to stay competitive and
maintain the merchant relationship, in particular
in the following four areas:
1) Product: how can the value proposition be
enhanced from a pure POS-offering to an
omni-channel payment and commerce product
portfolio?
2) Platform: how can (multiple) domestic legacy
platform(s) be (consolidated) and upgraded
to a single, compliant pan-European platform?
3) Scale: how can a sub-scale domestic provider
acquire international volumes on a large scale
(and under a single license)?
Yet again the Innovalue team reviews the latest payment
startup funding activity (Q1 2015). What are current
product or service innovations for investors, and what
are the global investment trends within the payment
Three types of players should be able to remain
independent in a consolidated future acquiring
market: the pan-European operator, the domestic
4) Resources: how can a capital constrained
acquiring function of a bank challenge a privately funded independent acquiring entity?
ecosystem?
6
Chart 1 target competitive landscape in acquiring
PuBliC marKet Valuations
PAn-euRoPeAn
PlATFoRmS
The stocks of public companies in the payments universe
keep rising while indicies continue to climb into record
territory. Markus Massem takes a look at valuation
drivers and benchmarks the different groups within the
m&a aCtiVity
What are the key drivers of M&A activity?
SPeciAliSTS
STraTeGy
Lead and shape the pan-European process of consolidation
Focus on local merchants and
established domestic customer
relationships
Specialization on domestic
and close proximity crossborder niche markets
BuSineSS
Achieve high level of efficiency by leveraging economies of scale across markets
Support of strong domestic
debit schemes and / or small
to medium merchant segments
in large markets
Dependent on unique skills
and ability to defend the
niche market through these
skills
Fast aggregation of market
share; small players will not be
successful
Creation or identification of a
market with high barriers to
entry (e.g. regulatory, technical
or cultural hurdles)
Identification of niche and
adjacent markets which provide for a sustainable future
payments universe
7
domeSTic
cHAmPionS
MODel
Which transactions made headlines in the 1st Quarter
of 2015? What are recent takeover rationales?
Robert Kayser answers these questions
CHallenGe
10 VC-aCtiVity
Transaction overview
14 m&a aCtiVity
Transaction overview
MarKeT
SHare 2020
2
payments Insight. Opinion.
The question of how to master these challenges
requires a thorough analysis of internal capabilities and an honest discussion of the future acquiring business and operating model.
Thereby, acquirers have three strategic options
for how to move forward with regard to their
acquiring business:
1) Stand-alone investments in business, either
internally or via acquisitions to grow the merchant acquiring business and to increase international competitiveness
2)Partnering, to forge a cooperation with payment service providers that gives access
to a state-of-the-art omni-channel product
portfolio and / or a pan-European acquiring
platform to facilitate a cross-border acquiring
proposition
3) Exit of the acquiring business and provision of
the product and services via a 3rd party referral agreement
The decision on the future acquiring business
model depends very much on the assessment of
the strategic relevance of the business, the internal capabilities and the externally available
partner propositions (offering and conditions) as
outlined in Chart 2.
So which route are acquirers taking? Looking at
the last twelve to fifteen months there are clear
indications of which direction selected players
are heading:
The decision on
the future
business model
depends on the assessment
of the strategic relevance of
the business, the internal
capabilities and the available
partner propositions.
Closing the gaps in their product offering on the
way to an omni-channel offering becomes the top
priority for established POS-acquirers and online
payment gateways are on top of the list of desirable acquisition targets: Ingenico acquired Global
Collect in addition to Ogone, Barclaycard bought
the Logic Group, the German savings banks got
Payone and Global Payments acquired Realex
Payments.
In particular the investments made by banking
groups are remarkable, since they are against a
trend notable in the industry: banks are increasingly exiting the merchant acquiring business and
are moving into partnerships, where the merchant contract is either held jointly (in a joint venture) or by a third party (in a referral agreement).
Between 2010 and 2015 the number of Top 40
European banks that provided inhouse acquiring
shrank from 71% to 58%. The rational for banks
to exit the business is manifold, including a classification of acquiring as a “non-core business”,
the notion that the business is sub-scale and not
competitive on a stand-alone basis or simply the
fact, that high valuations can currently be
achieved in a disposal of payment assets.
Knowing that and with the awareness of already
ongoing processes (strategic reviews, RfPs, M&A
etc.) in the market is it fair to assume that more
banks will exit the acquiring business, that the
share of specialists of the market will increase
and that more acquirers will aim to buy crosschannel capabilities (although the number of
remaining relevant, independent online gateways
is limited). Altogether, the years 2015 and 2016
will reshape the acquiring industry significantly.
Selected criteria for selection of strategic option
Strategic relevance
Is acquiring of strategic relevance today and
in the future (at the core of the business)?
Do I need to be the contractual party?
Return opportunities
Which of the options provides the highest
financial return from an acquiring business?
Partner propositions
Is there a potential partner with a
compelling value proposition?
Risk appetite
Can the risks inherent in the business be
managed and financially assumed (if necessary)?
Acquiring
business
model
Strategic relevance
What is the internally available customer base,
regulatory framework, IT-infrastructure?v
Available resources
Which human and financial resources are
internally available to execute the acquiring
strategy?
Page 1
3
payments Insight. Opinion.
Digital BanKing – a transFormation
oF Payments anD BeyonD
FranCesCo Burelli
Partner
In just a few years, social media has grown from a
hub for university students to exerting enormous
influence over a large number of people. Facebook, YouTube and Twitter were respectively
launched in 2004, 2005 and 2006, yet are now
worth more than many small countries. In addition to the internet on personal computers, mobile
has emerged as the future dominant channel for
social media amplifying its effect to a ubiquitous
potential and a comprehensive reach into consumers’ life driven by the growth in phone-based
applications for social networking, which now
account for more than a third of social networking
time across all channels1.
For businesses wishing not only to engage with
employees, existing and potential customers
there are now a variety of available possibilities
but the adoption of social media has to be seen
within the cultural context in which each bank
operates. This does not only mean that social
media has to fit within consumer preferences
within each target markets but that banks have to
take into account the legal and compliance regulations that permeate the financial services industry throughout.
requires a shift from the typical compliance driven
processes and responsibilities that are common
to traditional financial services organisations.
However, there are a number of financial institutions that are exploiting the social networking
landscape in different and original ways, in the
attempt to grow through leveraging these platforms in a predominant manner, and not just as an
additional channel to engage customers with (in
addition to incumbent channels like online and
telephone banking). Moreover, some banks
(including, in particular, Australian NAB and
CommBank) have launched websites that pool
transactional data not only to give consumers
insight into spending patterns and lifestyle tendencies, but also to provide the bank with the
possibility to analyse the latest financial trends,
risk levels, and market segmentation; making
the institution more inclined to make better
informed financial decisions2.
The environment in which business is conducted
has changed, and it will continue to evolve in the
future. Avoiding a response to the changes will
lead to an inexorable loss of competitiveness and
of customers.
In the future, specific dedicated resources to
elaborate an efficient social media strategy,
together with all other elements of digital banking, will not be a choice any more, but a matter of
fact.
The environment in which business is conducted
has changed, and it will continue to evolve in the
future. Avoiding a response to the changes will
lead to an inexorable loss of competitiveness and
of customers.
In the last couple of years the presence of financial services institutions on social media has sensibly increased, leading to an improvement of
social media strategies. However, many institutions are still reluctant to take on social media or
do not have the resources necessary to develop
and manage an effective social media strategy or
find it challenging to adapt strategy, processes
and process governance in line with the need of a
real-time pervasive social communication channel.
Implementing social media, and the ability to
Financial service providers, with the aid of social
In the future, specific dedicated resources to
media, should exploit this momentum and try to
elaborate an efficient social media strategy,
provide a new means of engaging with customers
together with all other elements of digital bankin an appealing manner that could help to effiing, will not be a choice any more, but a matter of
ciently increase their reputation. However, banks,
fact.
credit unions and other
financial service firms
need to be careful not
the environment in which
just to ‘jump on the
business is conducted
social media bandwagon’ and let themhas changed, and it will
selves get carried away
continue to evolve in the future.
by the overwhelmingly
avoiding a response to the changes
positive discussions on
the potential of social
will lead to an inexorable loss of
media. Therefore, to
competitiveness and of customers.
effectively address what
is undoubtedly a significant market opportunity they need a good social
media strategy with well-defined goals. Social
media are the most strict business judges and
do not allow mistakes, consequently, in order
to efficiently exploit the potential of these platforms a complete and in depth attention is
interact on the spot with customers or employees
compulsory.
Within this context, thinking of social media as a
marketing tool is extremely reductive and ultimately wrong. The adoption of social media has
created a cultural shift in the way business is
done, changing the environment, and making it
essential to understand the evolution and the
direction the industry is heading towards.
1
2
Nielsen 2012
http://service.commbank.com.au/images/content/
commbank/signals/index.html and http://peoplelikeu.
com.au/
Page 1
4
payments Insight. Opinion.
exhibit 1: Examples of how FS firms are using social media (non-exhaustive)
explanation
1
recruitment
• Posting job opportunities
by sharing links and news
about recruitment
campaigns
examples
Where
- Bank of America Careers: BoA’s Twitter Page is constantly updated and is
dedicated to list job postings for those looking for jobs at Bank of America.
- HSBC UK Careers: This Page is entirely dedicated to UK customers and shares
opportunities, careers advice, updates and news from HsbC world.
- RBS Jobs: RBS Jobs offers support to people who are looking for a job at RBS
Group and also the opportunity to help take careers further.
2
employee
engagement
and
empowerment
3
market
intelligence
and Product
Design
4
Credit
scoring,
Fraud
Preventing
and analytics
5
Product
awareness,
marketing
and
Promotion
6
Consumer
engagement /
loyalty
Bulding
7
Customer
service /
Consumer
education
8
social
responsibility
• Defining the organisational
culture
• Internal communication
• Enabling crossdepartmental connections
- ThoughtFarmer Intranet: Farm Bureau Bank’s Intranet, called ‘the Insider’, was
created in mid-2010 and has since then outperformed expectations. The Barnyard
is the social heart of the insider and it is a space where employees can post news,
pictures and videos, advertise articles, launch discussions and use the calendar to
announce milestones or plan social events. But it is not just the social side that
drives engagement, as much of the information on the Intranet is business-related
(policies and procedures, project updates and reports), and every department
uses the intranet for a range of critical applications that save time and money.
• Extract data from social
media in order to make
more appropriate market
decision and understand
trends
- Knowsis is a web intelligence company that extracts the information from
‘non-traditional online source’ (such as Facebook and Twitter), and, through
sophisticated algorithms, it extracts helpful information for capital markets.
• Using the data collected
through social media to
assess client’s credit risk
- Lenddo is a company that provides customers’ credit rating through the
analysis of social media pages. It is a could-based application that can be
used by any financial institution. It calculates the credit worthiness of
individual collecting information on Facebook.
- Paul Hawtin, readapting and developing the technology applied to operate the
first hedge fund that leveraged social media information, launched in 2013
Cayman Atlantic Investment Management. Cayman Atlantic analyses real-time
data from social media to discover market trends
- Social Intelligence provides a risk scoring service for insurances.
the risk score is calculated by matching the information of the applicant
with what is present on a variety of social media platforms.
• Social media can be a
powerful instrument to
increase brand awareness
and the portfolio of clients
• Social media can also be
used to target specific
marketing messages
• Creating a social media
environment in which the
customer feels like part of
brand
- One of the most relevant cases of increasing the brand awareness with the aid of
social media is the one of progressive Corporation, one of the largest providers of
car insurance in the US, that in 2008 introduced ‘Flo the Progressive Girl’. Flo is
Progressive’s mascot, and quickly became viral on Facebook, Twitter and Youtube,
massively increasing the brand awareness throughout the american population.
- Barclays has launched Barclays Wealth on Twitter tailoring its feed for different
client segmentation.
- MasterCard: On its official Facebook and Twitter Pages, MasterCard runs many
imaginative contests, and also promotes its best initiatives and services.
- American Express developed a strategy for which takes what you “like” on Facebook and gives you offers you may like, and more suitable to the person you are.
- The Orange Ambassadors (Facebook): ING Direct Canada recently selected its
most enthusiastic customers – those who showed an active engagement with inG
and other customers –, who then became brand ambassadors
• Provision of customer
support, in case of issues/
questions about financial
services and/or products
• Educate customers and
businesses on money
management and in
deep the knowledge of
the industry
• Showing various aspects of
Corporate Social Responsibility (CSR)
- Wells Fargo Bank: Wells Fargo provides real-time assistance and helpful tips
to its customers on its twitter page.
- Official America Express OPEN Twitter Page is a forum where, idea, business
insights and latest headlines are shared.
- NatWest Help (Twitter): Experts are available Mon-Sun from morning to evening
to help on any issue/question/problem a NatWest’s client may have.
- RBC Blue Water Project: It consists of a ten-year donations program supporting
initiatives that help protect and preserve water.
- Chase Community Giving: This Facebook Page lets fans decide the cause and
charity to which the Chase donations are made.
- UBS promotes its engagement in social project with the aid of Facebook.
9
Payment
initiation
• Social media are introducing quicker and more
simple ways of paying and
purchasing goods online
- Facebook Payment Implementation gives you complete flexibility to price goods in
any local currency, at arbitrary price-points. The purchase is concluded buy a simple
click on the ‘Buy Button’.
- Twitter introduces ‘Buy Button’ in order to directly purchase advertised items.
- Snapchat and Square Cash launched SnapCash; an app that allows you to send little
amount of money to friend and other users with a simple snap.
Page 1
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payments Insight. Opinion.
Venture CaPital
megan JoHn
Manager
Joris WetZel
Associate
Funding Activity
In the first quarter of 2015, a total of 113 funding
rounds were recorded. They account for a total (disclosed) volume of USD 1.63bn in equity and USD
409.14m in debt financing. The funding volume per
round was on average USD 18.07m.
Funding activity by region
north america
64
europe
25
asia
18
Oceania
3
africa
1
australia
1
south america
total
1
113
As in all past issues of this newsletter, North
American – mainly US-based – startups accounted
for the biggest share of collected venture capital,
more precisely 57% of the worldwide total equity
funding volume. Europe and Asia secured the first
and second runner-up positions by showing 25 and
18 funding rounds, accounting for approx. 22% and
16% of the worldwide total equity funding volume
in Q1 2015. Oceania showed a total of 3 funding
rounds, about a 3% share. Funding activity was
also recorded in Africa, Australia and South America - all three regions only showed one funding
(less than 1% of the worldwide total equity funding
volume each).
Investment Trends
Financial marketplaces held onto the number one
spot for the largest number of funding rounds
with a total of 30. This shows continued interest
in the sector that provides a flow of funds for
equity and debt capital from peer to peer (P2P)
business-to-consumer (B2C), consumer-to-business (C2B) and business-to-business (B2B). Previously, financial marketplaces were both the
largest in terms of number of deals and size (with
the top four funding rounds in the last newsletter
from this sector). However, it seems that, in terms
of deal size, this has declined with only one very
large debt funding from financial marketplaces:
Streetshares (an SME lending marketplace) who
raised USD 200m in seed funding from EagleBank, Community Investment Management
(CIM), Direct Lending Investment. The size of the
deal is especially notable since Streetshares was
only founded in 2014 representing a pace of
interest in this sector for the right players. The
remaining financial marketplaces deals were
comparatively smaller in size (the second largest
deal was USD 70m for LendingHome) and had a
diverse geographic coverage with deals for New
Zealand’s first licensed P2P lending platform Harmoney (who raised USD 10m) as well as Europe,
North America and Asia.
software and hardware products designed to bring
mainstream adoption of bitcoin. africa’s only deal
this quarter was also in virtual currency, with USd
1.1m raised for bit Pesa, a Kenyan based remittance
platform for bitcoin payments to East africa indicating a potential avenue to drive virtual currency
into a market that is praised for its early adoption
of mobile payments through the M-Pesa scheme.
Finally, Online Payments and Financial Services
featured strongly with the 2nd and 3rd largest
equity fundings and 10 and 20 deals respectively.
in Online Payments, online billing platform Zuora
received USd 115m – potentially a larger deal than
In joint first place with Streetshares for
In the first quarter of
the largest funding was Kreditech who
2015, a total of 113
secured USD 200m of debt funding
funding rounds were
from Victory Park Capital. Kreditech is a
German provider who applies big data
recorded. they account for a total
to credit decisions to provide short
(disclosed) volume of USD 1.63bn
term microloans to the “unbanked”
in equity and USD 409.14m in debt
population globally. The deal was significant for Kreditech as it represented
financing. The funding volume per
nearly ten times the amount that it had
round was on average USD 18.07m.
raised before in credit. There were only
three other deals in the big data category, representing limited activity with Oportun
others in this category as the business claims to
raising USD 90m for a similar service to Kreditech
offer a more extensive support for recurring paybut focussed on the Hispanic community. This
ments that extends across the subscription lifeindicates that a specific application for big data
cycle. amongst the plethora of Financial Services
has captured the imagination of investors while
deals Xero received USd 110.80 in financing for its
other opportunities have not featured significloud based accounting solutions; notable as the
cantly this quarter.
second New Zealand based company in this quarter’s financing round. Other Financial Services
deals focussed on companies providing integrated
Funding activity by segment
financial management platforms and investment
Financial marketplace
30
services solutions for consumers and cloud based
Financial services
20
services such as accounting and bank operating
Virtual / Crypto Currency
15
solutions. the large interest in these deals indicates that a clear leader has yet to emerge in these
mobile payment / mCommerce
10
fields and investors remain interested in the
Online payments
10
potential here.
Others
28
total
113
Virtual currency had a significant number of deals
in the quarter with 15 deals covering infrastructure
and exchanges indicating that interest remains in
this sector (although public interest through the
media has waned). the deals included the largest
equity funding of the quarter with USd 116m
received by 21 inc a provider of virtual currency
Overall, Q1 for 2015 represented a reasonably
strong start to the year with investments that
showed geographic diversity and a range of
investment focuses. in particular, companies
seeking to provide traditional banking products to
new customers have fared well as businesses look
to capture growth from previously underserved
customer segments.
Page 1
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payments Insight. Opinion.
PuBliC marKet Valuations
& tHe marKet enVironment
marKus massem
Senior Associate
European stocks have continued to climb further
into record territory (the Stoxx Europe 600
reached an all-time high in early April) as the
market’s big rally in 2015
showed no sign of abating.
"the public
A recent spate of corporate
companies in
mergers has injected further
our payments
confidence into a buoyant
universe have seen a
market, while the repayment by Greece of its latest
mostly solid year-to-date
installment owed to the
performance, with 13
International
Monetary
out of 18 stocks realizing
Fund (IMF) eased worries
gains since the
that Athens might spark a
fresh confrontation with
beginning of the year"
creditors. The European
Central Bank (ECB) also continues to pump ¤ 60
billion a month into debt markets under its stimulus program, driving down yields and pushing
investors into equities in search of better returns.
Also major US stock indexes were on track to post
their second week of gains in early April, with
both the Dow Jones and the S&P 500 now less
than 2% away from their all-time highs. In addition, the Japanese market is touching a 15-year
high. Gains were based on expectations for Japan's
economic recovery and brisk corporate earnings,
following an aggressive monetary stimulus.
The payments universe (alphabetical order):
Acceptance:
Global Payments, Ingenico,
PayPoint, Vantiv, Verifone
Processing:
Cielo, Euronet Worldwide, FIS, Fiserv, Heartland
Payment Systems, Total System Services
PSP/Online payments:
Wirecard
First-quarter reports from companies are likely
to be the next driver for the stock market.
Issuing/Prepaid solutions:
FleetCor, Green Dot, WEX
The strength of the U.S. dollar and low oil prices
are expected to weigh on earnings for multinationals and energy companies in particular.
The public companies in our payments universe
have seen a mostly solid year-to-date performance, with 13 out of 18 stocks realizing gains
since the beginning of the year.
Apart from Heartland Payments, all comparables
in the processing bucket have experienced yearto-date gains. Cielo is leading the segment, having gained more than 20% during that period and
trading above 20x 2014 EV/EBITDA, significantly
beyond its peers. Fiserv was another strong performer in this category, reaching a new life-time
high in early February.
The acceptance bucket was driven up by Vantiv,
Global Payments and Ingenico, which all gained
roughly 20% year-to-date. Vantiv reached a new
52-week high on the back of solid 2014 results
and a promising outlook for 2015. PayPoint was
the weakest performer in the acceptance segment and continues to trade at a discount to its
peers. The stock fell almost 4% following an
announcement that full year results for March
2015 should be within the range of market expectations. However, new HMRC legislation related
to some services being only partially exempt from
VAT is expected to negatively impact the firm’s
performance.
Schemes:
American Express, MasterCard, Visa
table 1: Indexed stock price performance from year-to-date April 8th 2015
120
115
110
105
S&P 500
Schemes
issuing/Prepaid
PSP/Online payments
Processing
acceptance
100
95
90
85
Jan-15
Feb-15
Mar-15
april-15
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payments Insight. Opinion.
Green Dot was the weakest performer in the issuing / prepaid segment, down 18% year-to-date.
Positive news included upgrades of Green Dot by
multiple analysts. Nevertheless, on the negative
side, concerns remain that the company's business model might have unraveled after the loss of
some exclusivity agreements with key customers.
FleetCor and WEX put in solid performances and
have gained 4% and 7% year-to-date respectively. Both companies are trading at a significant
premium to Green Dot.
American Express was the worst performer in the
schemes segment with a share price decline of
15% year-to-date. A significant event was the loss
of the 16-year partnership with Costco due to an
inability to agree on new terms, which is likely to
put pressure on 2015 and 2016 performance.
Analysts expect revenue and earnings to fall in
2015 before rising again in 2016. Under the new
agreement, Citi will become the exclusive issuer
of Costco's co-brand credit cards while Visa will
replace American Express as the credit card network for Costco in the United States and Puerto
Rico beginning April 2016.
70%
60%
61%
47%
40%
45%
30%
29%
25%
20%
10%
10%
24%
31%
26%
29%
24%
14%
12%
08%
0%
Revenue growth CY 13-14
Ebitda margin CY 13
Ebitda marginCY14
table 2: Payments universe operational metrics as of April 8th 2015
35.0x
32.1
30.0x
25.0x
23.4
20.0x
20.3
20.2
18.2
15.0x
15.2
10.0x
11.4
8.4
5.0x
6.8
5.1 4.0
15.1
14.4
13.1
13.2
10.0
6.7
3.6 3.7
5.9
0.0x
EV/REV CY 13
Visa and MasterCard continue to deliver strong
results, with MasterCard’s 2014 full year performance exceeding analyst expectations. Following
better than expected first quarter earnings, Visa
kept in place its outlook for the fiscal year ending
September, predicting annual net revenue growth
in the low double-digits on a constant-dollar
basis.
61%
50%
EV/REV CY14
EV/Ebitda CY 14
EV/Ebitda CY 13
table 3: Payments universe trading multiples as of April 8th 2015
acceptance
Processing
PSP/Online payments
issuing/Prepaid
Schemes
m&a aCtiVity
roBert Kayser
M&A activity and deal characteristics
Senior Associate
its online payment and digital wallet
services and reduces dependence on a
few large customers.
Figure 1: Value and volume comparsion
M&a Market development
Value USd billion
10
40
8
46
8.3
6
4
47
36
38
8.1
40
30
4.6
3.6
2
50
2.4
0
20
10
0
2014
Q1
2014
Q2
transaction volume
2014
Q3
2014
Q4
Numbers of transactions
The M&A deal activity in the payment sector
witnessed a strong development in the first
quarter of 2015. A total of 38 transactions have
been reported with a total disclosed volume of
USD 3.6 billion. After considerably weak M&A
activity in Q4/2014, confidence of deal makers
in the financial services industry returned. Consolidation among mobile wallet providers to
achieve their ambitions to position themselves
against Apple Pay has been a key deal driver.
A total of 38 M&A transactions were
announced in the first quarter of 2015.
This represents a 5 per cent decrease
over the 40 deals announced in the
same period of 2014. The financial terms
of 15 transactions, with a total volume of
USD 3.6 billion, were disclosed. This
quarter’s highlight is the sale of Skrill by
CVC to Optimal Payments for USD 1.0
billion. Through the acquisition Optimal
Payments brings a major competitor to
its Neteller business on board, expands
2015
Q1
Value USd billion
Page 1
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payments Insight. Opinion.
The median EBITDA-multiple from 2014 to 2015
increased slightly, from 14.7x to 14.9x. In addition, the
median revenue multiple from 2014 to 2015 raised by 24
per cent, from 2.8x to 4.2x. Wirecard’s acquisition of
AirPlus’ acquiring portfolio, valued at USD 15 million,
equates to a multiple of 9.3x EBITDA. The acquisition of
Skrill by Optimal Payments equates to a multiple of 11.4x
EBITDA or 3.1x revenue. D+H’s acquisition of Fundtech
for USD 1.3 billion equates to a multiple of 18.4x EBITDA
or 4.8x revenue. New York-listed Global Payments paid
54.7x Realex Payments’s EBITDA or 6.3x revenue in an
acquisition valued at USD 114.8 million. The enterprise/
revenue multiple for Temenos’s acquisition of software
provider Akcelerant is 3.7x.
Geographically, 54 per cent of the targets were based in
North America (Q1/2014: 55%), followed by 28 per cent
in Europe (Q1/2014: 33%) and 5 per cent in Asia/Pacific.
Regarding buyers there has been a considerable change.
Anglo-Saxon investors increased by more than 42 per
cent to more than two-thirds of all buyers. The reason is
mainly that investors have easy access to financing,
enabling them to grow inorganically. The strong investor
confidence is also reflected in the fact that data room
providers currently report a high utilization.
Median enterprise value multiples
16x
14x
12x
9.5
10x
8x
6x
3.7
4x
4.2
2.8
2x
2012
Revenue Multiple
2015
Q1
2014
2013
Ebitda multiple
Figure 2: median value, revenue, Ebitda
Target and buyers by region
7%
5%
2%
13%
5%
5%
33%
55%
A driver for recent
M&A activity has
been consolidation
among mobile wallet providers.
14.9
14.7
14.5
Q1/14
28%
48%
54%
45%
Q1/15
Q1/14
Targets
RoW
Asia/Pacific
5%
10%
21%
64%
Q1/15
Buyers
Europe
North America
Figure 3: 2014-2015 funding comparsion
Page 1
9
payments Insight. Opinion.
Transaction by segments
35
30
Number of transactions
25
20
15
10
5
0
Acquiring
ATM
Commerce Couponing/
Loyalty
General
Issuing
Mobile
Payments
Online
Payments
POS/mPOS
Processing
Security
2012
Technology/
Analytics
2013
2014
Figure 4: 2013-2015 transaction volumes by market segments
Key drivers of and rationale for M&A activity
A driver for recent M&A activity has been consolidation among mobile wallet providers. Mobile
payments have been for years a niche existence
even though there have been notable deals last
year such as MasterCard’s takeover of C-Sam,
Intuit’s acquisition of Check or Mozido buying
CorFire among others. At the end of 2014, Apple
has jumped on the train and triggered a chase
with the launch of Apple Pay. In the first quarterly
report after the product launch Apple reported
that already about 750 banks and credit unions
have signed up to onboard their customers.
Moreover, in just three months after launch,
Apple Pay makes up two out of three dollars spent
on purchases using contactless payments across
the three major U.S. card networks. Numbers that
could be expected to have risen further since
then. Apple has not made the breakthrough with
a superior new technology (NFC) but rather
through a combination of the right sense of timing
(acceptance readiness), a strong user community
and an elaborate product. Nevertheless, a rapid
rollout is difficult due to the high fragmentation of
financial markets. China, Japan and UK are
viewed as more advanced and could be the next
launch markets while Poland, Australia and Canada are viewed as possibilities because contactless payments have already made inroads. Visa is
rolling out tokenisation in Europe in April, a necessary preamble for the launch of Apple Pay.
Apple’s competitors quickly tried to jump on the
same train. In particular they are competing to
own the in-store shopping experience with their
own mobile payment systems. PayPal so far has
not been successful in looking for new growth
areas outside of internet payments. With the
acquisition of Paydiant, valued at approximately
USD 280 million, PayPal tackles payments in
bricks-and-mortar stores. A beneficial factor is
certainly that merchants are prone to PayPal as
they do not want to be beholden to a dominant
payments service, whether it is from Apple or
Google. In addition Paydiant is providing its solution already for CurrentC which is another major
U.S. wallet initiative by large retailers. Google also
strengthened its mobile payment position by inking a distribution deal with the biggest wireless
carriers in the U.S. Verizon Wireless, T-Mobile
and AT&T to get the Google Wallet payments app
pre-installed on their phones. At the same time,
Google is buying technology from Softcard, the
mobile payments app backed by the same carriers. Financial terms of the transaction have not
been disclosed. In addition, there is Samsung
which acquired U.S. based LoopPay to enhance its
U.S. portfolio of mobile wallet solutions and also
to increase its point of sales terminals. With the
market introduction of the new flagship products
Galaxy S6 and Galaxy S6 Edge, Samsung also
launched a new mobile payments solution called
Samsung Pay. Samsung’s sales pitch for using its
mobile payment solution is that because the MST
technology used is already available on many pay
terminals (up to 90 percent in the U.S. market), it
can be used in far more stores than Apple Pay or
Google Wallet, which use the less prevalent NFC
technology. So far there is no conclusive answer
to the superiority of Apple, Google and Samsung
so they will likely divide the market among themselves. German banks recently started the mobile
payment initiative “GIMP” as a joint venture to
compete to PayPal. Further consolidation will be
propelled by incumbents such as Austrian
DIMOCO which acquired Amaze in Greece or the
acquisition of Level Money by Capital One Financial in the U.S.
Initial public offerings (IPO) have not played a
decisive role recently. However, one of the biggest
buyouts of the past decade is making a bid to
become one of the top turnaround stories of
2015. First Data posted its first quarterly profit in
more than seven years, a development that could
set the stage for a potential IPO this year. The
company is owned by private-equity firm KKR
which took the company private in 2007 for
about USD 26 billion and invested another USD
1.2 billion last year. Furthermore, Alibaba’s finance
arm, Zhejiang Ant Small & Micro Financial Services Group, is supposedly planning an IPO but
not before as early as 2016. The company that
operates Alipay has at present an estimated value
of about USD 50 billion. The raised funds would
help Alipay to develop a variety of online finance
products and cater to smaller businesses.
Sources: Bloomberg, Mergerstat, Reuters,
WSJ, company publications
Page 1
10
payments Insight. Opinion.
Venture Capital Activity & Company Profiles
Q1 2015
Target (Country)
Round
Volume
(USDm)
Investor(s)
Funding
(USDm)
Description
1
Fruitful (UK)
A
7.80
N/D
30.00
Fruitful provides a P2P lending platform connecting savers' money directly with
mortgage borrowers.
2
IFAN Financial (US)
N/D
N/D
N/D
20.00
IFAN Financial designs, develops and distributes solutions that enhances and enable
mobile payments.
3
Vindi (BR)
Angel
0.05
N/D
10.00
Brazil-based Vindi offers an online payment platform focused in subscription billing.
4
NumberMall (IN)
Seed
10.00
SRI Capital
7.90
NumberMall offers a merchant-managed platform and a single mobile gateway for
all payments.
5
Even (US)
Seed
1.50
Andrew Kortina, Joe Ziemer, red Swan Ventures, Slow
Venture, Sam lessin, Adam Rothenberg, Homebrew
4.00
California-based Even provides a money management mobile app for people with
fluctuating income.
6
BlueDot Innovation (AU)
Angel
2.50
N/D
1.50
Bluedot Innovation is a B2B software solution for advanced GPS localization and
related payment and commerce functionalities.
7
Faircent (IN)
Venture
Round
4.00
Ashish Tiwari, Devesh Sachdev
N/D
India-based Faircent is a P2P Marketplace where borrowers and lenders connect
directly.
8
LibertyX (US)
Seed
0.40
Project 11
0.40
LibertyX operates bitcoin ATMs and an in-person bitcoin buying network supported
by 2,500 US merchants.
9
Curenci (US)
Venture
Round
0.13
N/D
0.13
Curenci provides a convenient, secure, socially-responsible payment loyalty
platform.
10
MatchMove (SG)
Venture
Round
30.00
GMO Venture Partners
0.05
Singapore-based MatchMove offers an mobile wallet that stores multiple virtual
credit cards.
11
WeLab (HK)
A
20.00
Access Industries, Shou Zi Chew, TOM Group Limited,
Sequoia Capital, Ule, Iconiq Capital
2.80
Hong Kong-based WeLab runs Hong Kong's first P2P lending platform WeLend.
12
Aixuedai (CN)
A
40.00
N/D
43.20
Chinese Aixuedai allows gives loans to college students to purchase items like
phones, tablets, laptops, and cameras using monthly instalment plans.
13
Harmoney (NZ)
Venture
Round
10.00
NZX, Heartland New Zealand, Trade Me
126.50
Harmoney is New Zealand’s first licensed P2P lending platform.
14
Giact Systems (US)
N/D
N/D
N/D
106.70
Giact Systems provides risk management services in electronic payments.
15
peerTransfer (US)
D
22.00
Bain Capital Ventures
3.00
peerTransfer enables secure and ensured money transfers for international students
when paying for US school's tuition fees.
16
Questis (US)
Angel
1.20
N/D
3.40
Questis offers a financial guidance solution to support employees in their financial
decisions.
17
BlockCypher (US)
Seed
3.10
Voylet Capital, Michael Liou, Crypto Currency
Partners, 500 Startups, Granite Ventures, Sanijva
Weerawarana, Ken Goldman, Boost VC, Nasir "Nas"
Jones, TriplePoint Capital, Jesse Draper, Fenox Venture
Capital, Streamlined Ventures, Upside Partnership,
AME Cloud Ventures, New Enterprise Associates,
Foundation Capital
263.00
BlockCypher is a cloud-optimized block chain platform powering crypto-currency
applications reliably and at-scale.
18
NETOPIA System (RO)
N/D
2.00
N/D
90.70
NETOPIA System is a Romania-based provider of online marketing and payment
processing solutions.
19
GiftCard Indonesia (ID)
A
2.00
RMK Ventures, Sinar Mas Indonesia, Lippo Digital
Ventures, Sovereign' Capital
24.00
GiftCard Indonesia offers a voucher, for electronics, and for travel purposes.
20
Ciphrex (US)
A
0.50
N/D
40.00
Ciphrex offers a multisignature crypto-currency wallet.
21
Satispay (IT)
A
6.40
N/D
10.00
Satispay is a payment network that can be used for micro payments, P2P money
transfer, in-store and online purchases.
22
Motif Investing (US)
E
40.00
Renren Inc.
3.10
Motif Investing is a social stock market platform that lets you invest in stock built
around everyday ideas and broad economic trends.
23
Coinbase (US)
C
75.00
Valor Capital group, Crypto currency partners, Draper
Fisher Jurventos, BBVA Ventures, New York Stock
Exchange, Ribbit Capital
2.00
Coinbase operates a bitcoin exchange and wallet infrastructure for consumers and
merchants, through wich merchants can accept Bitcoins as a means of payment.
24
Tip'd Off (US)
Angel
1.00
N/D
2.00
Tip’d Off is a social investing platform where peers can help you make money in the
stock market.
25
LendingRobot (US)
A
3.00
Runa Capital
1.20
LendingRobot is an automated investment service for online lending on the two
leading P2P platforms, Lending Club and Prosper.
26
True Link Financial (US)
Seed
3.40
Bodley Group, Deciens Capital, Karlin Ventures,
Generator Ventures, Colaborative Fund, Kapor Capital,
Cambia Health Solutions
0.50
The True Link Financial debit card aims to prevent over-the-phone spending, disable
wire transfers, block specific merchants and aims to limit ATM withdrawals affecting
seniors.
27
Taulia (US)
D
15.00
Zouk Capital
N/D
Taulia offers cloud based invoicing, supplier payment and automated discounting
for large purchasing companies.
28
BlueVine (US)
B
18.50
Correlation Ventures, Silicon Valley Bank, Lightspeed
Venture Partners, 83North
N/D
BlueVine is a online money lender adressing SMEs helping them to overcome their
short-term cash flow challenges.
29
Judo (UK)
B
7.80
Route 66 Ventures
81.20
Judo offers a custom mobile card payment solution that makes credit and debit card
acceptance simple and affordable for businesses.
Page 1
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payments Insight. Opinion.
Venture Capital Activity | Q1 2015
Target (Country)
Round
Volume
(USDm)
Investor(s)
Funding
(USDm)
Description
30
Kreditech (DE)
Debt
200.00
Victory Park Capital
14.30
German based Kreditech applies Big Data technologies on credit decisions to give
out short term microloans globally.
31
Raise Marketplace (US)
B
56.00
Soma Capital, Listen Ventures, The Pritzker
Organization, Bessemer Venture Partners, New
Enterprise Associates
7.77
Raise is a gift card marketplace where members can buy discount gift cards and sell
gift cards for cash.
32
SiamSquared (TH)
Seed
0.80
East Ventures, CyberAgent Ventures
1.00
SiamSquared offers a tech-based investing platform for individuals.
33
vogogo (CA)
Venture
Round
0.50
N/D
0.80
Canada-based vogogo is a payment service provider offering a web-based payments
collection service.
34
Sign2Pay (BE)
Angel
0.70
N/D
1.50
Sign2Pay offers a mobile payment app that authorizes payment transactions with
the users personal signature directly made on a smartphone's touchscreen.
35
FundThrough (CA)
Venture
Round
2.20
Peter Carrescia, Barlow Lane Holdings, Five Elements
Ventures, Origin Merchant Partners, Real Ventures
9.00
FundThrough is an online lending platform that provides financing to small
businesses in Canada.
36
TransferWise (UK)
C
58.00
Seedcamp, IA Ventures, Index Ventures, Valar
Ventures, Richard Branson Andreessen Horowitz
90.40
TransferWise offers online money transfer and remittance services with real time
foreign exchange rates.
37
ConnectYourCare (US)
Venture
Round
5.10
N/D
39.00
ConnectYourCare provides a financial management platform empowering
consumers to better manage their health savings.
38
MoneyDashboard (UK)
A
3.70
Scottish Investment Bank, Par Equity, Ariadne Capital,
Calculus Capital
2.20
Money Dashboard provides an online personal financial management service
allowing users to view their online financial accounts.
39
Earnest (US)
A
17.00
First Round, Collaborative Fund, Atlas Venture,
Andreessen Horowitz, Maveron
1.70
Earnest is a money lending platform offering merit-based personal loans to
financially responsible individuals.
40
Afrimarket (FR)
A
2.80
Orange, N/D
32.00
Afrimarket is a money transfer service adressing Afican migrants.
41
COLU (IL)
Seed
2.50
Bitcoin Opportunity Fund, BoxGroup, Spark Capital, Aleph
5.10
COLU provides Colored Coins and Bitcoin 2.0 infrastructure.
42
Donald (US)
A
1.00
N/D
7.80
Donald is a service that allows P2P money transfers between firends.
43
Final (US)
Seed
1.00
Y Combinator, T5 Capital, Ludlow Ventures
3.50
Final is issuing a safe credit card with flexible credit card numbers
44
Anycoin Direct (NL)
Venture
Round
0.58
N/D
2.50
AnycoinDirect is a Netherlands-based bitcoin exchange.
45
Ripple Labs (US)
N/D
30.00
IDG Capital Partners, Google Ventures, Andreessen
Horowitz
2.90
Former OpenCoin, now Ripple Labs, develops the peer-to-peer and virtual currency
protocol Ripple that can be used to globally make transactions in any available
currency.
46
bitFlyer (JP)
Venture
Round
1.10
Barry Sillbert
1.00
bitFlyer provides a Bitcoin exchange and marketplace.
47
Spreedly (US)
Seed
0.90
N/D
1.00
Spreedly is an online payment provider for credit card transactions, which captures
and stores the cc data via its cloud and provides secure payments to merchants
covering a range of 70 gateways by tokenization.
48
Bolstr (US)
Seed
1.70
Merrick Ventures, DRW Venture Partners
0.58
Bolstr provides a platform where accredited investors contribute to small business’
funding campaigns.
49
Greenphire (US)
B
N/D
The Riverside Company
10.10
Greenphire provides clinical payment and communication technology solutions.
50
SimplyTapp (US)
B
2.50
Mozido
122.60
SimplyTapp provides Host Card Emulation (HCE) solutions for cloud-based mobile
payments.
51
One97 Communications (IN) Venture
Round
N/D
Ant Financial
N/D
One97 runs an online platform through which users can shop or pay utility bills.
52
BitPesa (KE)
A
1.10
Future Perfect Ventures, Bitcoin Opportunity Fund,
Stephens Investment Management, Crypto Currency
Partners, Pantera Capital
213.00
BitPesa provides a remittance platform based on bitcoin payments to send money
to East Africa.
53
borro (UK)
E
19.00
The R-Group LLC, Rocket Internet, OurCrowd
171.60
borro is providing online loans secured against personal assets such as fine art,
antiques, jewellery, luxury watches, prestige & classic cars, fine wine and more.
54
Capital Float (IN)
A
13.00
Aspada, Sequoia Capital, SAIF Partners
16.00
CapitalFloat offers corporate loans and working capital financing for Indian SMEs via
fast and convenient online scoring and application.
55
Oportun (US)
Private
Equity
90.00
Institutional Venture Partners, Fidelity Management
& Research
18.90
Oportun applies Big Data technologies on credit decisions to give out short term
microloans to Hispanic communities.
56
MineralTree (US)
B
11.10
406 Ventures, Fidelity Growth Partners
2.50
MineralTree delivers automated invoice and payment processing to banks and their
small and medium business customers.
57
Bento (US)
Seed
2.50
Pivot Investment Partners, LionBird, Blumberg Capital,
Anthemis Group
1.70
Bento provides small enterprises individual prepaid cards as well as function cards
e.g. gas cards for their employees.
58
Money360 (US)
Debt
1.00
N/D
3.00
Money360 is a online marketplace to get P2P loans or make investments both
related to real estate.
59
CoAsset (SG)
A
0.80
N/D
0.80
Singapore-based CoAsset provides a crowdfuning platform for investments in real
estate.
Page 1
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payments Insight. Opinion.
Venture Capital Activity | Q1 2015
Target (Country)
Round
Volume
(USDm)
Investor(s)
Funding
(USDm)
Description
60
Cyndx (US)
Venture
Round
0.50
N/D
47.00
CyndX is a open capital raising technology platform.
61
Itz Cash (IN)
C
15.00
N/D
147.70
Itz Cash offers prepaid cards as well as an eWallet and Giftcards to the underserved
population in India.
62
Mobeewave (CA)
A
6.50
SBT Venture Capital
105.00
Mobeewave ia a Canadian startup that develops NFC mobile payment acceptance
services.
63
Bill.com (US)
F
50.00
American Express Ventures, Commerce Ventures,
Napier Park Global Capital, August Capital, Scale
Venture Partners, DCM Ventures, Silicon Valley Bank
15.00
Bill.com offers a cloud-based service to SMBs that automates time consuming
bill workflow, bill payment and business document filing tasks while keeping all
information synchronized with common accounting programs.
64
WorldRemit (UK)
B
100.00
Accel Partners, Technology Crosseover Ventures
8.20
WorldRemit is a online and mobile money transfer business with the option to use
card payments and innovative local payment methods.
65
Betterment (US)
D
60.00
Northwestern Mutual, Menlo Ventures, Bessemer
Venture Partners, Francisco Partners
6.50
Betterment offers its investors a cloud-based investment software to guide their
savings plans and optimize investment gains.
66
Pindrop Security (US)
B
35.00
Webb Investment Network, Redpoint Ventures,
Felicis Ventures, Citi Ventures, Andreessen Horowitz,
Institutional Venture Partners (IVP)
5.10
Pindrop Security provides risk management services by analyzing potential
fraudulent use of mobile phones for sales or services.
67
InDinero (US)
A
7.00
N/D
3.50
InDinero provides a financial management dashboard solution to small businesses.
68
Argon Credit (US)
A
3.00
Little Owl Management
1.50
Argon Credit provides a technology-based money lending platform.
69
Prism (US)
Venture
Round
2.00
John Keister, Chase Franklin, Rudy Gadre
6.50
Prism provides an app for to manage an pay an individuals bills.
70
Sindeo (US)
Seed
1.50
N/D
0.50
Sindeo provides a mortgage marketplace with mutliple lenders.
71
Ledger (FR)
Seed
1.50
Thibaut Faures Fustel de Coulanges, HiMedia Group,
Fred Potter, Alain Tingaud, Pascal Gauthier, Xange
Private Equity
33.00
Ledger developed a bitcoin hardware wallet focused on ease-of-use, affordability
and security.
72
Finsphere (US)
C
1.80
N/D
355.00
Finsphere provides identity security services for financial fraud and Risk
Management by using the location of the users GPS capable smartphone.
73
DriverUp (US)
A
50.00
Emerald Development Managers, RRE Ventures
50.00
DriverUp offers a lending platform for automotive financing allowing investors to
easily and directly participate in auto lending.
74
easySYS (CH)
B
4.80
Armada Investment Group, Redalpine Venture Partners 49.00
easySYS provides cloud-based business and accounting services for SMEs.
75
Linked Finance (IE)
Venture
Round
2.80
Frontline Ventures
70.50
LinkedFinance provides a P2P lending platform where lenders can lend directly to
small businesses.
76
Xero (NZ)
Post IPO
Equity
110.80
Matrix Capital Management, Accel Partners
13.20
Xero provides cloud-based accounting services.
77
nCino (US)
B
29.00
Jeff Horing, Gene Ludwig, John Mack, Wellington
Management, Insight Venture Partners
4.80
nCino offers cloud-based bank operating solutions to the financial services industry.
78
Visio Financial Service (US)
B
6.70
Octavia Investments
2.80
Visio Financial Service is a national mortgage lender focused on the needs of
experienced, locally expert residential investors.
79
SecureKey Technologies (CA) C
19.00
Rogers Venture Partners, BlueSKy Capital
2.20
SecureKey is a identity and authentication service provider that gives consumers
secure and convenient access to critical online services like a payment checkout.
80
Squirrel (UK)
Seed
0.37
N/D
1.30
Squirrel is a technology-based personal financial management platform.
81
MoBeam (US)
Venture
5.20
N/D
40.40
MoBeam has solved the issue of scanners not being able to scan barcodes
smartphone displays enabling mobile acceptance for e.g. coupons, loyalty cards and
tickets at the POS through LED pulses.
82
Bondora (EE)
A
5.10
Valinor Management
27.00
Tallinn-based Bondora offers a P2P online loan service.
83
Crowdcredit (JP)
Venture
Round
1.70
N/D
7.00
Japan-based Crowdcredit offers a P2P lending platform.
84
Momoe Technologies (IN)
Seed
1.20
India Quotient, Jungle Ventures, IDG Ventures India
1.70
Momoe Technolgies offers a mobile payment app enabling people to pay with their
existing credit cards & debit cards.
85
Linkable Networks (US)
E
11.70
Kepha Partners, CommonAngels Ventures, Blue Chip
Venture Company
4.50
Linkable Networks provides a comprehensive card-linked offer platform for
MasterCard-issuing banks.
86
Zervant (FI)
Seed
1.70
Conor Venture Partners
1.20
Finland-based Zervant provides cloud-based invoicing and accounting services.
87
21 Inc (US)
Venture
Round
116.00
Peter Thiel, Qualcomm Ventures, Data Collective,
Khosla Ventures, Yuan Capital, RRE Ventures,
Andreessen Horowitz
121.10
21 Inc is building virtual currency software and hardware products designed to bring
mainstream adoption of bitcoin
88
ShapeShift (CH)
Seed
0.53
Roger Ver, Barry Silbert
242.50
ShapeShift provides a bitcoin and other virtual currencies exchange.
89
Zuora (US)
F
115.00
Next World Capital, Vulcan
Shasta Ventures, Index Ventures, Redpoint Ventures,
Greylock Partners, Benchmark, Passport Capital,
BlackRock, Wellington Management
6.20
Zuora provides an online SaaS for recurring billing / payments managing the entire
subscription lifecycle.
Page 1
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payments Insight. Opinion.
Venture Capital Activity | Q1 2015
Target (Country)
Round
Volume
(USDm)
Investor(s)
Funding
(USDm)
Description
90
ChargeBee (US)
B
5.00
Accel Partners, Tiger Global Management
29.50
ChargeBee provides a seamless & flexible online recurring billing experience to
customers & manages customer subscriptions.
91
EVEN Financial (US)
Seed
2.80
Conversion Capital, Brooklyn Bridge Ventures, Social
Leverage, Lerer Hippeau Ventures, Canaan Partners
2.80
EVEN Financial is a supply side platform for the P2P marketaiming ro bring more
and better quality borrowers into the Marketplace Lending ecosystem
92
StreetShares (US)
Seed
200.00
EagleBank, Community Investment Management
(CIM), Direct Lending Investment
0.79
StreetShares is a SME lending marketplace, connecting Mainstreet businesses with
institutional and retail investors.
93
Tablesafe (US)
C
4.50
N/D
201.20
TableSafe provides restaurants with at-the-table payment technology.
94
YeePay (CN)
Venture
Round
N/D
TA Associates
57.50
YeePay is a PSP that enables consumers and businesses to make and receive
payments through the internet, mobiles and telephones.
95
Coinigy (US)
Seed
0.10
N/D
23.00
Coinigy is a provider of bitcoin infrastructure.
96
ID.me (US)
C
3.00
N/D
8.60
ID.me offers online identitfication services for shoppers to facilitate loyalty and
discount programmes.
97
FundBox (US)
B
40.00
General Catalyst Partners, NyCa Investment Partners,
Khosla Ventures, Shlomo Kramer, Blumberg Capital,
LionBird
14.00
Small enterprises money lending company Fundbox offers business owners a way to
fix their cash flow by paying their customer's outstanding invoices in advance.
98
Remitly (US)
B
12.50
Trilogy Equity Partners, QED Investors, DN Capital,
Draper Fisher Jurvetson (DFJ)
0.10
Remitly offers expatriats a money transfer services from a mobile phone in the USA
to a mobile phone in a country abroad.
99
Unilend (FR)
Venture
Round
8.60
Ventech, 360 Capital Partners, Bpifrance
N/D
Paris-based Unilend provides a crowdlending platform allowing SMEs to borrow
from a community of credit institutions.
100
Property Partner (UK)
A
7.84
Octopus Investments, Ed Wray, Seedcamp, Index
Ventures
19.70
London-based Property Partner offers an investment platform that lets anybody
invest in the "buy to let" market.
101
LendingHome (US)
C
70.00
N/D
98.00
LendingHome offers a technology-driven real estate lending platform.
102
SpotCap (ES)
Debt
6.84
Holtzbrinck Ventures, Access Industries, Rocket
Internet, Kreos Capital
33.00
Spotcap is a lending platform for SMEs adressing the Spanish market.
103
OpenGamma (UK)
Debt
1.30
N/D
9.80
OpenGamma provides real-time market risk management technology for the
financial services industry.
104
RazorPay (IND)
Seed
0.12
Y Combinator
6.00
Razorpay offers an online payments solution to small businesses, startups and other
traditional SME organisations.
105
Stockfuse (US)
Seed
0.12
Barclays Accelerator
22.66
Stockfuse is a Europe-focused Bitcoin exchange.
106
Safello (SE)
Seed
0.12
Barclays Accelerator
2.30
Safello is a high secure easy to use Bitcoin platform for crypto-rookies.
107
Self Lender (US)
Seed
0.12
Techstars
2.00
Self Lender offers a consumer finance service to help underserved people to build
up credit history.
108
Lendio (US)
C
20.50
Highway 12 Ventures, Runa Capital, Tribeca Venture
Partners, Pivot Investment Partners, North Hill
Ventures, Blumberg Capital
24.20
Lendio provides a small business lending marketplace matching small business
owners with banks, credit unions, and other lending sources.
109
iAngels (IL)
Seed
2.30
Millhouse Capital
0.12
iAngels online investment platform enables private investors to co-invest with
leading VCs and angel investors.
110
Dream Payments (CA)
A
6.00
Rouge River Capital, Real Ventures, Blue Sky Capital
0.12
Dream Payments has a mobile payment platform which turns your smartphone into
a mobile POS.
111
Sensibill (CN)
Seed
2.00
Impression Ventures, Six Squared Capital
0.97
Sensibill developed a digital receipts ecosystem allowing customers to access
receipts directly from their bank accounts.
112
Advanced Merchant
Payments (HK)
N/D
N/D
N/D
0.12
Advanced Merchant Payments provides a platform that leverages principles from
micro-finance, payment processing, data analytics and predictive modelling to
enable banks to service loans to SMEs.
113
Ratesetter (UK)
Venture
Round
29.50
Stratton Finance, Carsales.com
N/D
RateSetter is a P2P lending exchange, allowing people to lend and borrow money
directly with each other,
Source Innovalue Research, based on publicly available information
Page 1
14
payments Insight. Opinion.
DEAL Activity M&A
Q1 2015
Date
Announced
Target Company
Country
Target Company Industry
Buyer(s)
Country
Transaction
value (USDm)
1
02/01/15
Vanado
USA
Provides consulting and payment services
Vogogo
Canada
1.4
2
12/01/15
Level Money
USA
Develops a mobile finance application
Capital One Financial
USA
N/D
3
12/01/15
Giact Systems
USA
Provides verification, authentication, and funds confirmation
information services
Tritium
USA
N/D
4
14/01/15
Intellinx
Israel
Proviodes a fraud management solution
Bottomline Technologies
USA
N/D
5
14/01/15
Kontomierz
Poland
Develops bank API KontoX
Kreditech
Gerrmany
N/D
6
19/01/15
Terminal Management Concepts
Canada
Develops wireless pay-at-the-table EMV Chip & PIN software
Posera-HDX
Canada
N/D
7
26/01/15
Cashnomix
United
Arab
Emirates
Provides cloud based marketplace platform
ApexPeak
Singapore
N/D
8
27/01/15
Chase Paymentech Solutions LLC
(gift cards)
Canada
Engages in online gift card processing services
Givex
Canada
N/D
9
30/01/15
Card Cells
USA
Provides secure packaging solutions for prepaid gift and
general purpose reloadable card markets
Valid USA
USA
8.4
10
01/02/15
SnipSnap USA
Develops mobile applications
SLYCE
Canada
6.1
11
01/02/15
Seergate
USA
Develops and distributes secured lock electronic debit
transactions processing solutions
MyECheck
USA
3.0
12
02/02/15
Pendum
USA
Provides automated teller machine maintenance and armored Burroughs
services
USA
N/D
13
09/02/15
Pureca
Japan
Provides payment processing services
BASE
Japan
N/D
14
10/02/15
WebPay
Japan
Provides credit card platform and secure payment systems
Line
South
Korea
N/D
15
10/02/15
PayEase
USA
Provides electronic payment services
Mozido USA
750.0
16
11/02/15
Akcelerant Software
USA
Provides consulting services and connected software
applications to the financial services industry
Temenos
Switzerland 55.0
17
13/02/15
Automation
USA
Provides computerized point of sale software solutions
Heartland Payment Systems
USA
N/D
18
13/02/15
Take Your Money Everywhere
South
Africa
Provides online banking and financial services
Commonwealth Bank of Australia
Australia
31.2
19
17/02/15
iboxPro
Russia
Provides mobile point of sale services
LifePay Russia
10.0
20
18/02/15
LoopPay
USA
Develops mobile wallet and mobile payment solutions
Samsung
South
Korea
N/D
21
20/02/15
Amaze
Greece
Provides carrier billing and mobile messaging services
DIMOCO
Austria
N/D
22
20/02/15
PayCo
Germany
Provides payment outsourcing solutions for enterprises
UPG
United
Kingdom
N/D
23
23/02/15
Softcard
USA
Provides mobile payment solution to Verizon Wireless,
T-Mobile and AT&T
Google
USA
N/D
24
25/02/15
Everline
United
Kingdom
Provides working capital to small businesses
Organge Money
United
Kingdom
N/D
25
26/02/15
TagPesa Kenya
Provides trading in crypto exchange and remittance gateway
igot.com
Australia
N/D
26
02/03/15
TrialPay
USA
Provides online payment services and e-commerce platform
Visa
USA
N/D
27
02/03/15
Paydiant
USA
Provides mobile payment services
PayPal
USA
280.0
28
03/03/15
Lufthansa AirPlus (acquiring portfolio)
Germany
Provides acquiring solutions
Wirecard
Germany
14.0
29
03/03/15
Payroll 1
USA
Provide payroll, tax filing products and valuable solutions
Heartland Payment Systems
USA
N/D
30
10/03/15
CyActive
Israel
Develops cyber security system
PayPal
USA
60.0
Page 1
15
payments Insight. Opinion.
DEAL Activity M&A | Q1 2015
Date
Announced
Target Company
Country
Target Company Industry
Buyer(s)
Country
Transaction
value (USDm)
31
11/03/15
Payzone Ireland
Ireland
Provides consumer payment services
The Carlyle Group
USA
N/D
32
12/03/15
Kili Technology
Canada
Operates as a fabless semiconductor company
Square
USA
N/D
33
24/03/15
Skrill
United
Kingdom
Provides online payment services
Optimal Payments
United
Kingdom
1,012.0
34
27/03/15
Realex Payments
Ireland
Provides payment processing services for businesses
selling online and processing Global Payments
USA
125.0
35
27/03/15
Payment Revolution USA
Provides credit card processing services
ShopKeep
USA
N/D
36
30/03/15
Fundtech USA
Provides financial technology solutions
D+H
Canada
1,250.0
37
31/03/15
ReadyForZero
USA
Provides financial situations and helps people to
manage their credit card debt
Avant
USA
N/D
38
31/03/15
PayOnline Russia
Provides online payment solutions
Net Element
USA
8.5
Page 1
payments Insight. Opinion.
16
aBout
innoValue management aDVisors
INNOVALUE is a leading strategic management advisory firm dedicated to the financial services
industry. INNOVALUE’s clients are global or national market leaders, regional specialists, innovators
and entrepreneurs that have trusted INNOVALUE for over a decade as their preferred advisors. In the
three practices - Payments, Banking and Insurance - INNOVALUE has a distinctive industry know-how
based on years of experience, deep and tested insights and established methodologies. The industry
practices are complemented by two cross-functional service lines: Corporate Finance and INNOVALUE
Solutions.
In the payments practice our clients range from high-growth mobile payment startups to established
financial institutions or telecom companies and from cutting-edge strategic players to high-profile
private equity and venture capital investors. We develop and implement tailored solutions on topics
of strategic importance – including Growth, Efficiency and M&A – on engagements across Europe and
beyond. Our clients uniquely benefit from the passion of our consultants in the payments industry,
through extensive international project experience, methodologies and the use of very current and
pertinent data and benchmarks.
AndReAS HAbeRSeTZeR
Partner
INNOVALUE Management Advisors Ltd.
3 More London Riverside
London, SE1 2RE
United Kingdom
images: Shutterstock
e-mail [email protected]
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