The Pulse
of Fintech,2015 in Review
Global Analysis ofFintech Venture Funding

March 9, 2016©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

1

Welcome message
2015 was the year that fintech entered the mainstream. With respect to VC funding inparticular, over US$13.8 billion was deployed to a wide variety of fintech companies
globally, more than double the value of VC investment in fintech in 2014.

One key to fintech’s growing prominence in the VC community is the diversity of interests
considered ‘fintech'. Almost every major process within banking and insurance is being
targeted by fintech companies globally, either to disrupt the incumbents or, increasingly, toenable them to serve their customers better or reduce costs.
While many big banks and insurers have set up their own fintech corporate venture funds,
they’ve also increasingly looked to partnership models with fintech companies to find anedge over their competitors. In effect, these banks have moved from unbundling services
to re-bundling them – from disruption to co-creation. Part of the competitive advantage
banks have over new market entrants is trust. But to fully become the real-time, innovativeand modern trusted adviser, they have to be willing and able to plug and play with fintech
companies to provide customers with an amazing, personalized, secure, easy andinexpensive experience to better manage their financial lives.
Unlike some other investment areas, fintech is gaining momentum in every region of theworld – with hubs developing across Asia, Europe and North America. There are many
unique factors driving interest in different regions, from diversification and sub-sector
diversification to growth in deal size and an enhanced focus on fintech as an enabler
rather than a disruptor.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

KPMG is a global network ofprofessional firms providing
Audit, Tax and Advisory
services. We operate in 155
countries and have more than
174,000 people working inmember firms around the world.
The independent member firmsof the KPMG network areaffiliated with KPMGInternational Cooperative(“KPMG International”), a Swiss
entity. Each KPMG firm is alegally distinct and separate
entity and describes itself assuch.

CB Insights is a National Science
Foundation backed softwareas-a-service company that uses
data science, machine learningand predictive analytics to help
our customers predict what’s
next—their next investment, thenext market they should attack,the next move of their competitor,
their next customer, or the nextcompany they should acquire.

2

Welcome message (cont.)
At KPMG and CB Insights, we believe fintech’s scope, scale and ongoing evolution makeit a critical area that VC investors need to watch. That is why we are partnering to bring
you the pulse of fintech investment globally. Each quarter, we’ll highlight the top fintech
deals, issues and challenges around the world, in addition to key trends and insights in
the industry.
This quarter, we examine key global trends along with what’s happening in fintech within
key regions. We also put the spotlight on Blockchain – the technology some believe will
be key to the future of banking – to see whether it lives up to all the hype.
We hope you find this first edition of The Pulse of Fintech report informative. If you would
like to discuss any of the results in more detail, please contact a KPMG adviser in yourarea.
Kind regards,
Warren Mead
Global Co-Leader ofFintech, KPMGInternational, Partner,
KPMG in the UK

Ian Pollari
Global Co-Leader ofFintech, KPMGInternational, Partner,
KPMG in Australia

Dennis Fortnum
Global Chairman,
KPMG Enterprise,
KPMG International

Brian HughesPartner, Co-Leader,
KPMG EnterpriseInnovative Startups
Network, Partner,
KPMG in the US©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Arik SpeierPartner, Co-Leader,
KPMG EnterpriseInnovative Startups
Network, KPMG in Israel#FINTECH

KPMG is a global network ofprofessional firms providing
Audit, Tax and Advisory
services. We operate in 155
countries and have more than
174,000 people working inmember firms around the world.
The independent member firmsof the KPMG network areaffiliated with KPMGInternational Cooperative(“KPMG International”), a Swiss
entity. Each KPMG firm is alegally distinct and separate
entity and describes itself assuch.

CB Insights is a National Science
Foundation backed softwareas-a-service company that uses
data science, machine learningand predictive analytics to help
our customers predict what’s
next—their next investment, thenext market they should attack,the next move of their competitor,
their next customer, or the nextcompany they should acquire.

3

WHAT THE PULSE OF FINTECH REPORT COVERSThe Pulse of Fintech report gives a detailed look at trends and data covering equity transactions to venture capital-backed
fintech companies globally. For a full definition of data included in this report, see Page 80.
While fintech covers a diverse array of companies, business models and technologies, companies generally fall into several key
verticals, including:Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms, as well as underwriter and lending
platforms using machine learning technologies and algorithms to assess creditworthiness.
Payments/Billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment
card developers to subscription billing software tools.
Personal finance/Asset management: Tech companies that help individuals manage their personal bills, accounts and/or credit,
as well as manage their personal assets and investments.
Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between
individuals across countries.
Blockchain/Bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin
wallets to security providers to sidechains.
Institutional/Capital Markets Tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual
funds or other institutional investors. These range from alternative trading systems to financial modeling and analysis software.
Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies
provisioned in the form of equity.
Insurance tech: Companies creating new online carriers, brokerage and distributional platforms.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

4

TABLE OF CONTENTS#SECTIONINVESTMENT ACTIVITY

6

Summary

8

Global Data

$13.8B in funding | 653 deals

34

North America$7.7B in funding | 378 deals

51

Europe$1.5B in funding | 125 deals

66

Asia

$4.5B in funding | 130 deals

All monetary references contained in this report are in USD©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

5

SUMMARY OF FINDINGSMEGA-ROUNDS PUSH 2015 FINTECHFUNDING TO ALL-TIME HIGH

US FINTECH FUNDING SOARS PAST $7B IN
2015, DEALS ON DECLINE

2015 fintech funding more than doubles 2014 total: Globally,funding to VC-backed companies in 2015 hit an all-time high of$13.8B, up 106% versus 2014’s total of $6.7B.

New high-water mark: 2015 was a new high-water mark for
fintech financing as mega-rounds pushed US fintech funding to$7.39B across 351 deals. On a year-over-year basis, 2015 saw
a 72% rise from 2014’s fintech funding total. The spike in US
fintech funding came despite a minor increase of just 15 deals
from 2014.

Deals taper off in the second half of 2015: Large deals were
the headline of 2015, largely driving the funding trends. Deal
activity fell for the final 2 quarters, including Q4’15, which saw
just 154 deals, the lowest quarterly total since Q3’14.
Mega-rounds spread through fintech: Between 2011 and2013, there were fewer than 15 $50M+ rounds to venturebacked fintech companies in aggregate. In 2015 alone, thenumber of $50M+ fintech deals jumped past 60.
Corporates active in one of every four fintech deals:
Corporates have participated in 25 percent or more of all fintech
deals for 3 quarters straight, as corporates in financial services,
telecom and technology become increasingly active.

US fintech deal activity falls for second straight quarter: US
fintech deals hit a five-quarter low in Q4’15 as quarterly funding
fell below $1B.
Mid-stage fintech deals heat up: Series B deal share to US
fintech companies hit a 5-quarter high in Q4’15. Series A deals
took one quarter or more of all US fintech deals for the second
straight quarter.
Late-stage deal sizes come back to earth: Median late-stage
fintech deal sizes rose to $75M in Q3’15 on the back of $100M+
mega-rounds to SoFi, Avant and Kabbage. But Q4’15 saw
median late-stage deal sizes fall back to $38M.

Note: Report only includes all equity rounds to VC-backed fintech companies
CB Insights tracked a large number of mega-deals to VC-backed fintech companies this quarter that included hedge funds or mutual funds, forexample. This report includes all of those rounds. This report does not cover companies funded solely by angels, private equity firms or any debt, secondaryor line of credit transactions. All data is sourced from CB Insights. Page 80 details the rules and definitions we use.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

6

SUMMARY OF FINDINGSEUROPE FINTECH FUNDING HITS $1.5B IN
2015

RECORD YEAR FOR ASIA FINTECH ENDS
WITH A TEPID QUARTER

European fintech funding deals rise in 2015: VC-backed
fintech companies in Europe raised $1.48B in funding across
125 deals in 2015. It was the second straight year of $1B+
invested in European fintech companies, as deal activity rose
28% on a year-over-year basis.

Asia fintech funding quadruples 2014 total. In 2015,
funding to VC-backed fintech companies in Asia exploded to
hit $4.52B across 130 deals. The spike is attributable to anotable rise in $50M+ fintech deals, which included One97,
Dianrong, and BankBazaar, among others.

Early-stage deal sizes fall in second half: Early-stage
median deal size in Europe fell below $2M in Q3’15 and Q4’15
after a spate of larger Series As pushed Q2’15’s median to$6.7M.

Q4’15 falls back after $1B+ quarters: After hitting $1B+ inboth Q2’15 and Q3’15, Asian fintech funding fell $1B in
Q4’15 from the quarter prior. The steep drop came despite asmaller decrease of just 18% in deal activity.

UK dominates Germany fintech funding in 2015: UK fintech
funding outpaced that of Germany by 398% in 2015 thanks, inpart, to large deals to Funding Circle, WorldRemit and Ebury,
among others.

Fintech mega-rounds spike in Asia: After taking fewer than
10 $50M+ deals between 2011 and 2014, Asia saw 17 $50M+
deals to venture-backed fintech startups in 2015.

Corporates less prominent in Europe fintech deals:
Corporates have participated in less than 15% of VC-backed
fintech deals in 4 of the past 5 quarters, including just 10% in
Q4’15.
Lack of Europe fintech mega-rounds: 2015 saw Asia garner
113% more $50M+ fintech deals than in Europe and 375%
more mega-rounds in North America than in Europe.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Corporates extend reach in Asia fintech: With the presenceof Alibaba, Tencent, Baidu, Rakuten, and others, corporates
participated in 40% of all financing deals to Asian VC-backed
fintech companies in Q4’15. Corporates participated in nearly
half of all deals to Asian VC-backed fintech companies in Q3’15.
Asia fintech seed deal share falls: Asia fintech activity has
shifted toward the mid-stage as Q4’15 saw Series B and Series
C stage activity combine to take 29% of activity. In the samequarter, fintech seed deal share fell to a 5-quarter low of 16%.

#FINTECH7

In 2015 VC-backed fintech companies
raised$13.8B
across653 deals©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

8

Fintech taking center stage globally
In 2015, innovations in banking took center stage in the fintech space. Across the world, investors were drawn to the potential of fintech –not only as a disruptor to big banks, but as an enabler for big banks to kick-start their own innovation.
The force of change is becoming impossible to ignore, with mobile-enabled consumers having more options than ever. The rising tide ofmillennials is demanding more personalized and convenient services. This is a big concern for banks, which recognize that trust withmillennials is difficult to establish. The reality is this demographic seems more interested in advice from friends, family and their social
networks than they are from corporate financial advisers.

It’s a challenging but exciting time. It’s hard to imagine how fintech will evolve next. Geographic diversification has led to fintech hubs
rising in numerous locations – London, Sydney, Tel Aviv, Singapore and Hong Kong to name a few. Embracing fintech is not simply aboutlooking to Silicon Valley. Different geographies are putting their own spin on fintech, creating new sub-sectors almost every day. While therise in mobile in Asia opens the door to reaching unbanked and under-banked communities, in Europe fintech seems more focused on
creating efficiency, cost-effectiveness and just-in-time personalized services to meet growing customer demand.
Given the diverse factors driving the evolution of fintech globally, it’s not surprising that investment into VC-backed fintech companies
soared to $13.8 billion in 2015. This increase of more than 100% is even more significant given that 2011 fintech investment was only
$2.1 billion.
Deal volume also increased, from 586 in 2014 to 653 in 2015 – although the rise was nowhere near as significant as the increase in deal
value. This highlights that interest in fintech is gaining momentum, with average deal size going up dramatically compared to historicallevels. It appears VC investors are committing more money to fintech with the belief that banking and insurance are industries ripe forchange.
Other key global trends in 2015 included:
Payments and lending options lead the fintech space – but insurance poised for growth
The traditional banking functions of payments and lending have been the key sub-sectors driving fintech historically. In fact, of the 19
fintech unicorns globally (VC-backed companies valued at over $1 billion), the vast majority are focused on either payments processing oron lending technologies. Companies like Stripe on the payments side and SoFi on the lending side have been making serious waves
among VC investors. However, payments and lending may not stand alone for much longer. Interest in insurance-focused startups is
growing quickly, with unicorns Zenefits, Oscar and Gusto all reflecting new models of insurance, payroll or benefits provision.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

9

Fintech taking center stage globally (cont.)
Deal size growing across regions
While fintech deal numbers are up year over year, the most significant changes have been in the value of deals. Marketplace lender
SoFi’s $1 billion Series E funding highlights the significant attention that up-and-coming fintech companies are attracting. Kabbage,
Dianrong and a number of others also achieved significant funding rounds. The rise of $50m+ mega-rounds across the world reflectincreasing interest in established entrepreneurs and business models that could be quick-to-market.
Corporates playing a big role in fintech – especially in Asia
While VC investors may be becoming more cautious overall, corporates are expected to keep interest in fintech high over the next few
quarters. While big banks have long seen fintech companies as potential competitors, in the last year they have begun to see them as
potential enablers. For many, major tech giants such as Google and Apple are becoming much more of a threat than fintech startups,
pushing banks to work with the latter to get out ahead of the former. Given this shift, it’s not surprising that corporate participation in global
deals to VC-backed fintech companies accounted for 25 percent of investment –although this number varies dramatically, from 40 percent
in Asia to just 10 percent in Europe.
Fintech investment may have slowed in Q4’15, but not expected to be held back for long
As investors grew more cautious toward the end of 2015, total global VC investment dropped significantly – from $38.7 billion to $27.2
billion between Q3 and Q4. Fintech also experienced a similar decrease – from $4.7 billion to $1.7 billion over the same period. This drop
was likely a reflection of growing caution across all areas of VC investment, rather than a concern with fintech in particular.
While caution is expected to continue to be a trend over the next few quarters, fintech interest is not likely to be held back for long. For the
short-term, corporate investment in fintech will likely take center stage as corporates pursue longer term objectives associated with theperceived value that fintech can provide to their own organizations.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

10

VC-BACKED FINTECH COMPANIES TAKE 73% OF
OVERALL FINTECH FUNDING IN 2015
VC-backed fintech companies are taking a greater portion of overall fintech investment. In 2014, VCbacked companies made up 55% of overall fintech investment dollars.

Annual Global Fintech Financing Trend

VC-Backed Fintech Companies vs. Overall Fintech Investment*, 2011 - 2015
1400

$25.0

1162
$20.0

933
759

$15.0

607
$10.0

457

298
$5.0

$-

397

484

587

1000

$19.1
653

$12.2

400

$3.9

$2.8

$2.1

$2.4

$2.8

$6.7

$13.8

2011

2012

2013

2014

2015

Overall Fintech Investment ($B)

800
600

$2.4

VC-Backed Fintech Investment ($B)

1200

200

VC-Backed Fintech Deals

0Overall Fintech Deals*Overall investment includes fintech funding by angel investors, angel groups, private equity firms, mutual funds, hedge funds, VC, corporate and corporate VC investors.

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH11$13.8B DEPLOYED ACROSS 653 DEALS TO VENTURE
CAPITAL-BACKED FINTECH COMPANIES IN 2015
Limiting the data to equity funding involving VC-backed fintech companies shows 2015 reached a multiyear high, topping 2014’s VC-backed total by 106%. Deal activity grew 11% compared to 2014 and awhopping 119% compared to 2011.

Annual Global Financing Trends to VC-Backed Fintech Companies
2011 – 2015

653

$16.0

587

$14.0

500

397

$10.0
$8.0

600

484

$12.0

400

298

300

$6.0

200

$4.0

100

$2.0
$-

700

$2.1

$2.4

$2.8

$6.7

$13.8

2011

2012

2013

2014

2015

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

12

26 LARGEST FINTECH DEALS OF 2015

#FINTECH©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firm visà-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All
rights reserved.

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB#Q4VC
Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No
member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

13

Q4’15 FINTECH FUNDING SEES STEEP DROPOFF AS
DEALS SEE LOWEST QUARTERLY TOTAL OF 2015
After mega-rounds including a $1B round to marketplace lender SoFi buoyed Q3’15, fintech funding cooled
off in Q4’15. Funding fell 64% amid a drop in $100M+ round activity vs. the previous quarter, while deal
activity fell 7%.

Quarterly Global Financing Trends to VC-Backed Fintech Companies
Q1’11 – Q4’15

$6.0
$5.0

136

$4.0
$3.0

85

92

83
63

101

112
92

106

143

153

135

156
143

165 169 165

180

154

140

120

99

100
80

67

60

$2.0

40

$1.0
$-

160

$0.6 $0.6 $0.4 $0.5 $0.7 $0.5 $0.7 $0.5 $0.5 $0.5 $0.8 $0.9 $1.5 $1.7 $1.1 $2.4 $2.5 $4.9 $4.7 $1.7

Investments ($B)

20
0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

14

SERIES A FINTECH DEALS HIT FIVE-QUARTER HIGH
Fintech deal share to Series A investments hit 27% in Q4’15, after taking 24% of all fintech deals in thesame quarter last year. Seed deal share fell to a five-quarter low in Q4’15 at 27%, after taking 34% of all
fintech activity in Q4’14.

Quarterly Global Fintech Deal Share by Stage
Q4’14 – Q4’15

15%

4%
3%
10%

5%
5%
7%

13%

15%

11%

22%

34%

Q4'14

12%
24%

10%
5%
4%
9%

12%

14%

7%
4%

16%
5%
2%
5%

19%

18%

25%

25%

27%

30%

29%

28%

27%

Q1'15

Q2'15

Q3'15

Q4'15

Seed / Angel

Series A

Series B

Series C

Series D

Series E+

Other

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

15

MEDIAN EARLY-STAGE FINTECH DEAL SIZE REACHESFIVE-QUARTER LOW IN Q4’15
Median early-stage (Seed - Series A) deal size among all VC-backed fintech companies was $2.1M in
Q4’15, down 13% versus the previous quarter and 22% from Q1’15’s high of $2.7M.

Global Early-Stage Fintech Deal Size
Q4’14 – Q4’15

$2.7
$2.3

Q4'14

$2.5

$2.4
$2.1

Q1'15

Q2'15

Q3'15

Q4'15

Median Early-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

16

GLOBAL MEDIAN LATE-STAGE DEAL SIZES FALL OFF
PREVIOUS HIGH IN Q4’15
After multiple $100M+ fintech rounds in Q3’15 boosted the median late-stage deal size (Series D+) to$57.7M, deal sizes fell in Q4’15 to $38.0M. The Q4’15 deal size drop came after two consecutive quartersof rising late-stage median deal sizes.

Global Late-Stage Deal Size
Q4’14 – Q4’15

$57.7

$53.5
$40.0

$38.0

$22.5

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Median Late-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

17

VC-BACKED FINTECH COMPANIES SEE HUGE Q4’15
FUNDING DROP ACROSS CONTINENTS
Fintech funding matched or dropped to five-quarter lows across North America, Asia and Europe in Q4’15. This
despite deal activity remaining relatively level with Q3’15 totals. Funding in that quarter was buoyed by large
mega-rounds to the likes of SoFi, Avant, and Kabbage.

Deal Count by Continent

Investment ($B) by Continent

Q4’14 – Q4’15

99

97

Q4’14 – Q4’15

$2.7

103

89

$2.3

89

$2.2
$1.6

32

36
30

21
Q4'14

Q1'15
North America

36

30

Q2'15

31

Q3'15
Europe

$1.6

$0.9

31

34

27

$1.7

Q4'15
Asia

$0.4

$0.4

$0.4

$0.3

Q4'14

Q1'15
North America

$0.4
$0.4

$0.4

Q2'15

Q3'15
Europe

$0.3
Q4'15
Asia

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

18

CORPORATES PARTICIPATE IN 1 OF EVERY 4 FINTECHDEALSIn the past three quarters, corporations and their venture arms have participated in 25%+ of all global deal
activity to VC-backed fintech companies.

CVC Participation in Global Deals to VC-Backed Fintech Companies
Q4’14 – Q4’15

26%

74%

Q4'14

21%

25%

26%

25%

79%

75%

74%

75%

Q1'15

Q2'15

Q3'15

Q4'15

Other Investors

Corp / CVC Deal Participation

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

19

PAYMENTS TECH VC-BACKED INVESTMENT ACTIVITY
Top Deals & Countries, 2015

Top Deals
Payments Tech Investment Activity

One97 Communications

VC-Backed Companies, Q4’14 – Q4’15$1,200$1,000$575M // Corporate Minority
45

36

39
32

$800

50

Affirm45$275M // Series B

40

Zuora

35

30

30

$600

25
20

$400

$200

$-

$1,019$639$931$1,141

$203

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($M)

$115M // Series F

Top Countries

15

United States

10

60 Deals // $920.7M

5
0

India
21 Deals // $1.39B

Deals

United Kingdom
20 Deals // $291.3M

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

20

LENDING TECH VC-BACKED INVESTMENT ACTIVITY
Top Deals & Countries, 2015

Top Deals
Lending Tech Investment Activity

SoFi

VC-Backed Companies, Q4’14 – Q4’15$2,500$1.35B // Series E
25

22

21

$325M // Series E$2,00020

15$1,50015

12

11$1,000

10

$500

5

$-

$317

$438

$754

$2,009

$383

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investments ($M)

Avant

0

Deals

DianRong$207M // Series H

Top Countries
United States
36 Deals // $2.72B

China
10 Deals // $538M

United Kingdom
7 Deals // $249.2M
Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

21

THE RISE OF FINTECH MEGA-ROUNDS: $50M+ FINTECHDEALS SPIKE IN 2015
Both North America and Asia saw a significant rise in fintech mega-rounds in 2015. After taking fewer than
10 $50M+ deals between 2011 and 2014, Asia saw 17 $50M+ deals to venture-backed fintech startups.
North America saw close to 40 $50M+ deals in 2015, after taking 29 in 2014.

$50M+ Financings to VC-Backed Fintech Companies
North America vs. Asia vs. Europe, Q4’14 – Q4’15

38

29

17

2

1
2011

2

3

8

7

5

4

1
2012

2014

2013
North America

Asia

2015

EuropeSource: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

22

BLOCKCHAIN & BITCOIN INVESTMENT ACTIVITY
Top Deals & Cities, 2015

Top Deals
Bitcoin & Blockchain Investment Activity

21 Inc.

VC-Backed Companies, 2011 – 2015
75

$500

$111M // Series C
74

$450
$400

$250

$75M // Series C

40

$200

26

30

$150

$-

70

50

$300

$50

Coinbase

60

$350

$100

80

2
$3

2011

4
$1

2012

$80

$299

$474

2013

2014

2015

Investments ($M)

Circle Internet
Financial$50M // Series C

Top Cities

20

San Francisco

10

13 Deals // $261.7M

0

New York
5 Deals // $26.3M

Deals

Austin5 Deals // $3.3M
Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH23

“Blockchain is a notable example of an
emerging technology that offers
enormous potential to the financial
services industry, however this needs to
be balanced with the reality that
substantial barriers must be overcome inorder for this potential to be realized...”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Ian Pollari

Global Co-Leader of Fintech,
KPMG International, Partner,
KPMG in Australia#FINTECH

24

BLOCKCHAIN & BITCOIN DEALS MATURE TO MIDSTAGE
2015 saw the first Series C deals in the blockchain & bitcoin space to date. After taking all deal share in2011 and 2012, seed deal share fell to 53% in 2015.

Annual Blockchain & Bitcoin Deal Share By Stage2011 – 2015
11%
4%

6%
3%

15%

26%

17%
5%
7%
18%

100%

100%
70%

2011

2012
Seed / Angel

65%

2013
Series A

Series B

2014
Series C

53%

2015

Other

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

25

Blockchain hitting the big time, but is it ready?
Interest in blockchain technologies grew significantly in 2015, with
VC investment in particular growing from $298 million in 2014 toalmost $460 million this year. This interest in distributed ledger
technologies is remarkable given that 5 years ago, it was barely ablip on investors’ radar, known mostly for underpinning the Bitcoin
digital currency.

Interest in blockchain gaining momentum
These days, a wide range of companies are exploring blockchain as
the potential solution to numerous challenges both inside andoutside the banking sector. During 2015, Citibank, Santander, Wells
Fargo, HSBC and numerous other big banks announced
partnerships with fintech companies looking to leverage blockchain
to make banking processes more efficient, timely and secure. At thesame time, IBM moved forward with an open source blockchain
initiative in tandem with numerous partners, from the London Stock
Exchange to technology companies like Cisco and Intel.
These organizations, along with a number of others, believe thepotential disruption blockchain could create – in terms of decreasingtransaction times, self-automating smart contracts, loweringtransaction costs, minimizing fraud, and opening the door to microtransactions – is impossible to ignore. As a result, interest inblockchain is gaining momentum, with investment expected to growinto 2016.
Being honest about the challenges with blockchain
But does the potential live up to the hype? While blockchain’s
potential is interesting, there are substantial barriers that must be
overcome in order to implement it successfully within banking andcapital markets. Regulatory and market changes, in particular, could
hamper blockchain’s use on a global scale. Some analysts alsosuggest that blockchain has been burdened with excessive investor©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

expectations that cannot realistically be fulfilled. At the rate
investment is growing, it’s possible that investors looking for
immediate, short-term success may be disappointed.
Corporate investors need to qualify their expectations when it comesto blockchain and the obstacles associated with achieving value.
The technology is not a silver bullet that can solve every problem
tomorrow.To get the most value from blockchain, corporate
investors need to be less hopeful and more pragmatic. They need toencourage industry-focused engineers to define the problems
blockchain can help resolve, find the best and most cost effective
technology solutions and work through limitations to scope,scalability, velocity and usability. There are significant challenges
with respect to each of these areas when it comes to applying thestatus quo application of distributed ledger solutions to themainstream components of the banking system.
For example, right now, blockchain is not scalable to a degree that it
can fundamentally replace large scale, high availability platforms.
Nor does it provide the speed, ubiquity, APIs, or controls
environment needed by banks to conduct day-to-day activities. In
addition, many banks continue to work with antique legacy IT
systems, which may not be capable of supporting blockchain
initiatives. The technology, after all, typically consumes morecomputing power and resources than the status quo solutions usedby many banks and related vendors for areas such as payments.
These issues could significantly impact their decisions and plans tomove to new distributed ledger platforms.
On top of these and other challenges, there is still a long way to go
to gain widespread regulatory acceptance for blockchain.
Short-term blockchain opportunities do exist
In spite of these challenges, there are still many reasons tocontinue to pursue innovation in distributed ledger technologies#FINTECH

26

Blockchain hitting the big time, but is it ready? (cont.)
as the potential benefits associated with a breakthrough down theroad are great. One area where the technology offering may be ofparticular benefit in the short term is digital identity or what others
are calling a digital financial passport. Many banks are excitedabout this opportunity and can see positive improvements related to
how digital identity is currently being facilitated and enabled atbanks. Improvements in this area could enable better choice andportability of customers between financial institutions and ultimately
higher customer satisfaction as individuals are able to take control
over and gain benefit from their own identity. Beyond digital identity,
there are a number of other important niches where blockchain
could make early gains as well.
Now is the time for experimentation
Given how the technology is evolving, as advisers we believe that
now is the time for experimentation, not for wholesale technology
implementation. Corporates that encourage use-case testing –whether for the securities trading lifecycle, the processing of a loan,
or digital identify verification – and who can learn from thisexperimentation can be better positioned to adjust course andachieve the most value. More widespread implementation at thisstage could have serious financial consequences should thetechnology not live up to expectations.

In regard to testing, some early examples of this trend seem to be
taking hold in the marketplace. A great number of the major financial
services institutions that KPMG’s network of firms work with have
Proof of Concept (POC) and prototype initiatives underway related
to blockchain. Larger financial institutions, such as JP Morgan
Chase, are now considering how to test for scalability, validate initial
hypotheses, build longer term target operating models and enhancebusiness cases based on their POC/prototype results.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

There’s also work being done related to enhanced international
payment capabilities as well as the application of distributed ledger
principles to needs for identity management and other areas. It
seems clear that the move to test and experiment with distributed
ledger technologies is well underway in financial services.

A balanced approach
Having said that, investors need to take a balanced approach totheir blockchain investment strategies. To be the disruptor investors
envision, blockchain protocols and solutions must evolve to support
the reliability, efficiency and scalability requirements expected in theindustry. It also needs to be a differentiator, rather than simply an
enabler. And, it needs to be adoptable by all parties in the banking
supply chain – a fact that will require significant collaboration acrossindustry, regulatory bodies and those supporting potential solutions.
There’s little doubt that investment in blockchain has taken off
recently, but relative to other fintech areas, such as robo advisory,machine learning or alternative lending – the scale of investment isstill modest. The ability for blockchain to become a true gamechanger is still in progress. Investors need to look beyond the hypeand ensure that any technology solution is underpinned by
exceptional engineering, a full understanding of the barriers, andclear economics on the cost and benefits associated with thetechnology.
In this regard, many organizations and engineers are now
undertaking deeper analysis on blockchain and a more balanced
and pragmatic view is emerging. KPMG’s network of firms see
ourselves as part of this group and advocate toward selective andtargeted experimentation as a first priority that will yield greater
benefit down the road.

#FINTECH

27

14 OF FINTECH’S GLOBAL UNICORNS FOCUSED IN
PAYMENTS OR LENDING

Unicorns represent companies
valued at $1 billion or more©2016 KPMGInternational(“KPMG2015
International”),
a Swiss entity.
Memberfirms of theof
KPMG
Source:The
PulseCooperativeof Fintech,in Review,
GlobalAnalysis
Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
network of independent firms are affiliated with KPMG International. KPMG International provides no client©2016 KPMGInternational
Cooperative(“KPMGInternational”),
a Swiss
entity. Member
firms ofthe KPMG
services.
No member
firm has
any authority
to obligate
or bind KPMGInternationalor any othermemberfirm
vis-à-vis
parties, norfirms
doesare
KPMG
International
haveInternational.
any such authority
obligate or bind
any member
network thirdof independent
affiliatedwith KPMG
KPMGtoInternational
providesno clientfirm.
All rights
services.
No reserved.
member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Fintech companies valued at $1 billion or more#Q4VC #Q4VC

28

“Over the past year, there has been ashift as banks have moved from seeing
fintech companies as disruptors to cocreators. Banks are increasingly
collaborating with fintechs to embed newservices and technologies that improvecustomer experience and drive
efficiency.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

Dorel Blitz
Head of Fintech,
KPMG in Israel

29

CITIGROUP, GOLDMAN SACHS LEAD MAJOR BANKINVESTORS INTO VC-BACKED FINTECH STARTUPS
Citigroup and its venture arm, Citi Ventures, have been the most active major bank investor over the past
5 years, followed by Goldman Sachs, which has made investments into Circle Internet Financial, Motif
Investing and Square, among others.

Major Bank Investments to VC-backed Fintech Companies
2011 – 2015

13

10

5
3

Citigroup

Goldman Sachs JPMorgan Chase Morgan Stanley

3

Wells Fargo

2

2

Bank of America

Credit Suisse

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

30

“Banking has permanently shifted: ATM
cards, teller windows and cash are
increasingly less relevant. Now, every
major bank has a digital solutions
strategy to take their products andservices (wealth management, lending,payments) mobile.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Fiona Grandi

Financial Services Fintech
Leader, KPMG in the U.S.

#FINTECH

31

NOTABLE ‘REST OF WORLD’ VC-BACKED FINTECHFINANCINGS: Q4’14 – Q4’15
Company

RoundCountry

Select Investors

Prospa$60M(Series B)

Australia

Entrée Capital, AirTree Ventures, Ironbridge Capital,
The Carlyle Group

Nubank$3M(Series B)

BrazilTechnisys$13M(Series B)

Argentina

Alta Ventures Mexico, Endeavor Global, Intel
Capital, Kaszek Ventures, Holdinvest
Technology Fund

SocietyOne$10M(Series B)

Australia

Australian Capital Equity, Consolidated Press
Holdings, News Corp.

ContaAzul$9.3M(Series C)

BrazilRibbit Capital, Valar Ventures, 500 Startups,
Tiger Global Management, Monashees Capital

GuiaBolso$7M(Series B)

BrazilRibbit Capital, QED Investors, Omidyar Network,
e.Bricks Digital, Kaszek Ventures

Kopo Kopo$2.1M(Series A)

Kenya

Khosla Impact, Javelin Venture Partners, Bamboo
Finance, Venture Lab

PromisePay$2M(Seed VC)

Australia

Cultivation Capital, Reinventure

BitPesa$1.1M(Seed VC)

Kenya

Blockchain Capital, Pantera Capital, FuturePerfect
Ventures, Digital Currency Group, Stephens
Investment Management

Simply Wall Street$.43M(Seed VC)

Australia

Innovation Capital Limited, Sydney Angels©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Kaszek Ventures, QED Investors, Sequoia Capital,
Tiger Global Management#FINTECH

32

SELECT VC-BACKED FINTECH EXITS IN NORTH AMERICA:
Q4’14 – Q4’15
Company
Lending Club

SquareOnDeck Capital

Shopify

PayEaseExit Type
IPO

IPO

IPO

IPO

Acquisition(Mozido)Valuation Select Investors$5.4B

Canaan Partners, Norwest
Venture Partners,
Morgenthaler Ventures,Foundation Capital$4.7B

SV Angel, Khosla Ventures,
Sequoia Capital, Visa,
Kleiner Perkins Caufield &
Byers

$1.3B

First Round Capital, RRE
Ventures, Village
Ventures, Contour
Venture Partners,
Sapphire Ventures$1.3B

Bessemer VenturePartners, Felicis
Ventures, FirstMark
Capital, GeorgianPartners$750M©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

WI Harper Group,
Capinfo, Plainfield AssetManagement“We've already been deploying[our services] around the worldand now we’ve made a major
move into China with acompany that is alreadyestablished and has marqueecustomers.”

Michael Liberty
Founder, Mozido

Quote source: MobilePaymentsToday.com
Image source: Mozido#FINTECH33

In 2015

NORTH
AMERICAN

VC-backed fintech companies raised$7.7 billion©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

34

2015 a banner year for fintech in North America
Fintech activity in North America accounted for more than half offintech deals globally in 2015, making it the undisputed leader in thespace last year. The region can’t rest on its laurels, however. Fintech
interest is rising exponentially in Asia, which could see that region
eclipsing North America in the years ahead.
While fintech investment rose 73 percent in 2015 in North America, aslower fourth quarter, combined with the prospect of further interest
rate increases in the US, may impact investment in the short term andresult in a slight shift in the players. While corporate investors will
likely continue to invest in fintech in order to drive their own internalinnovation and ability to compete with non-traditional market entrants,
some institutional investors may shift away from fintech investing inthe short term due to lower perceived rates of return.
Corporates driven by rising tide of millennials and threat of tech giants
A number of forces are driving investment in fintech in North America,
rapidly shifting demographics being one of the most predominant. The
millennial generation – the biggest demographic population since thebaby boomers – is making significant waves in the banking sector with
their increasing demand for personalized services, just-in-timebanking and a desire for more control over their own finances. Theirtrust in traditional banking is limited, with many preferring to seek
advice from their friends and family, and even social networks, rather
than from financial advisers.
Corporate VC participation rebounds at the end of 2015
Corporate VC participation as a percentage of all fintech deals was up
to 25 percent in Q4’15 following a dip down to 18 percent in Q3. The
significant interest from corporate investors in North America
highlights a growing mindset shift in banking to look at fintech
companies more as enablers than disruptors. While companies like
Stripe and Square are continuing to gain traction in the market, big©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

banks are coming to recognize that these companies may not be their
only significant threat. There are also the tech giants such as Apple
and Amazon.
According to the Millenial Disruption Index, 75 percent of millennials
would be more excited about a new financial services offering from
Amazon, Google, Apple or Paypal than from an offering from theirincumbent bank. Numbers like these are very concerning to traditionalbanks. Threat of competition from the tech sector is driving banks toinvest rapidly in fintech companies to enable their own innovation,ability to respond to millennial needs and to solidify their place in themarket before the tech giants take a bite out of their market share.
Mega-rounds buoying growth of US fintech
Of the $7.7 billion in fintech funding in North America, $7.3 billion was
raised by fintech companies operating in the United States – making
them the undisputed leader of fintech globally. Total funding volumerose dramatically from $4.3 billion in 2014, buoyed primarily by anumber of significant mega-rounds, including SoFi’s $1 billion Series E
funding round. Actual deal volume rose by only 15 deals year overyear, suggesting a significant increase in deal size. This likely reflects
growing interest in more established entrepreneurs and businessmodels with the ability to move to market quickly.
In Q4’15, Series B deals accounted for over 20% of all US fintech
funding – a significant 5 quarter high. At the same time, late stage E+
deals fell for the second quarter to just 7% of total deals. The lack ofsignificant mega-deals in the US over the quarter accounted for the
total drop in US based VC investment to below $1 billion for the firsttime in over 5 quarters.

#FINTECH

35

NORTH AMERICA: $7.67B ACROSS 378 FINTECH DEALSIN 2015
In North America, 2015 reached a 5-year funding high for fintech, reaching $7.67B across 378 deals
buoyed by mega-rounds to SoFi, Affirm, and Credit Karma among others. Funding was up 73%, while
deals rose 6% versus the previous year.

North American Annual Financing Trends to VC-Backed Fintech Companies
2011 – 2015

$9.0

328

$8.0
$7.0

$6.0

355

378

350
300

271
237

250

$5.0

200

$4.0

150

$3.0

100

$2.0

$1.0
$-

400

50

$1.6

$1.8

$2.2

$4.4

$7.7

2011

2012

2013

2014

2015

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

36

OVERALL INVESTMENT TO VC-BACKED NORTHAMERICAN FINTECH STARTUPS PLUNGES IN Q4’15
Deal activity to VC-backed North American fintech companies in Q4’15 matched Q3’15’s low of 89 deals.
While funding rose to $2.7B in Q3’15, Q4’15 saw a major drop-off, falling 64% versus Q3’15 to under $1B.

North American Quarterly Financing Trends to VC-Backed Fintech Companies
Q4’14 – Q4’15

120

$3.0
$2.5

99

97

103
89

89

100

$2.0

80

$1.5

60

$1.0

40

$0.5

20

$-

$1.6

$1.7

$2.3

$2.7

$0.9

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

37

“The millennial generation is at theforefront of all the changes that are
occurring. They have grown up with theinternet, are more tech savvy thanprevious generations and like to do
everything on-demand from their smart
phones. These characteristics are
driving a lot of disruption across allindustries, especially fintech.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Brian Hughes

Co-Leader, KPMG EnterpriseInnovative Startups Network, andNational Co-Lead Partner, KPMG
Venture Capital Practice,
KPMG in the US#FINTECH

38

SERIES B DEAL SHARE RISES TO 5-QUARTER HIGH AS
SEED DECREASESIn Q4’15, Series B activity took 22% of all fintech deals in North America, a 5-quarter high. VC-backed
seed deal share in fintech fell to 27% in the same quarter, matching a 5-quarter low.

North American Quarterly Deal Share by Stage
Q4’14 – Q4’15

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

39

EARLY-STAGE FINTECH DEAL SIZES STAY LEVEL INNORTH AMERICAMedian early-stage fintech deals were $3.0M in Q4’15, matching a 5-quarter high and 20% higher than thesame quarter a year prior.

North American Early-Stage Fintech Deal Size
Q4’14 – Q4’15

$2.5

$2.8

$3.0

$3.0

Q3'15

Q4'15

$2.0

Q4'14

Q1'15

Q2'15
Median Early-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

40

LATE-STAGE FINTECH DEAL SIZES COME BACK TO
EARTH IN NORTH AMERICA IN Q4’15
After mega-rounds including SoFi’s $1B financing pushed Q3’15’s median deal size to $75.0M, medianlate-stage deal sizes fell back in Q4’15 to $38.0M.

North American Late-Stage Fintech Deal Size
Q4’14 – Q4’15

$75.0
$57.0
$40.0

$38.0

$32.3

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Median Late-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

41

THE 10 LARGEST FINTECH ROUNDS OF 2015 TOTALED OVER
$3.3B, NEARLY 44% OF FUNDING IN NORTH-AMERICA
SoFi
Peer-to-peer lending service
Series D, E, E - II
Avant
Online lending service
Series E

Zenefits
HR software and insurance broker
Series C$1.350B

AffirmInstallment loans and credit scoring
Series B$500M

21 IncBitcoin mining hardware andsoftware support
Series C

$275M
$111M
$175M

$325M

$165M
$115M

Prosper Marketplace
Peer-to-peer lending service
Growth Equity - II

Zuora
Subscription billing and finance solutions
Series F

$225M
$135M

AvidXchange
Automated bill payment solutions
Growth Equity
Kabbage
Online small business lender
Series E

Credit Karma
Online credit and financial management platform
Growth Equity - III©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firmvis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member
firm. All rights reserved.

#FINTECH

42

CORPORATE DEAL SHARE OF VC-BACKED NORTHAMERICAN FINTECH COMPANIES RISES FROM Q3 LOW
After dropping to 18% in Q3’15, corporate investor participation in VC-backed fintech deals rose in Q4’15
to 25%. Corporates have participated in 20%+ of all North American fintech deals in 4 of the past 5
quarters.

CVC Participation in North American Deals to VC-Backed Fintech Companies
Q4’14 – Q4’15

23%

20%

77%

80%

Q4'14

Q1'15

18%

26%

82%

74%

Q2'15
Other Investors

Q3'15

25%

75%

Q4'15

Corp / CVC Deal Participation

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

43

“Some of the more traditionalorganizations see how quickly
alternative models, like Square or Stripe
in the payments space, or Xoom in themoney transfer space have evolved andthey have a choice – to either adjust andadapt or lose market share.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Conor Moore

National Co-Lead Partner,
KPMG Venture Capital Practice
KPMG in the US#FINTECH

44

ANDREESSEN HOROWITZ IS THE MOST ACTIVE VC
INVESTOR IN NORTH AMERICA FINTECH
Andreessen Horowitz has been the most active investor in North America fintech companies since 2011,
followed by SV Angel, 500 Startups, and Google Ventures.

Most Active VC Investors in North America Fintech Companies
2011 – 2015

Rank

Investor

Rank

Investor1

Andreessen Horowitz

9

Spark Capital2

SV Angel

10

Kleiner Perkins Caufield & Byers

3

500 Startups

11

Blockchain Capital

3

Google Ventures

12

QED Investors

5

RRE Ventures

13

New Enterprise Associates

6

Khosla Ventures

13

General Catalyst Partners

7

First Round Capital

15

Crosslink Capital

7

Plug and Play Ventures

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH45

US FINTECH FUNDING JUMPS 72% IN 2015 DESPITEMINOR DEAL INCREASE
Fintech startups in the US took $7.39B in equity funding in 2015, a 72% rise from 2014’s total. The spike in
US fintech funding came despite a minor increase of just 15 deals from 2014 as mega-rounds buoyed thefunding total.

US Annual Financing Trends to VC-Backed Fintech Companies
2011 – 2015

$8.0
$7.0

307

$6.0
$5.0

336

229

351

400
350
300

253

250

$4.0

200

$3.0

150

$2.0

100

$1.0

50

$-

$1.6

$1.7

$2.0

$4.3

$7.4

2011

2012

2013

2014

2015

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

46

US FINTECH DEAL ACTIVITY FALLS TO FIVE-QUARTER
LOW IN Q4’15
US fintech startups saw a $1.64B decrease in funding in Q4’15 as deals dropped for the second
consecutive quarter. The $894M in fintech funding in Q4’15 was a 44% decrease from the same quarterlast year.

US Quarterly Financing Trends to VC-Backed Fintech Companies
Q4’14 – Q4’15

$3.0

92

90

94

100

84

$2.5

83

90
80
70

$2.0

60
$1.5

50
40

$1.0

30
20

$0.5

$-

$1.6

$1.7

$2.3

$2.5

$0.9

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($B)

10

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

47

SERIES B FINTECH DEAL SHARE HITS A 5-QUARTERHIGH IN Q4’15
Series B deals took over one-fifth of all US fintech deals in Q4’15, a 5-quarter high. Series E+ deal sharefell for the second consecutive quarter in Q4’15 to 7% as a lack of mega-deals contributed to an overallfunding drop.

Quarterly US Fintech Deal Share by Stage
Q4’14 – Q4’15
8%

10%

10%

11%
3%

9%

16%

8%
4%
7%

15%

16%

7%
4%
13%
7%
21%

34%

Q4'14

10%

16%
7%
2%

15%

22%

27%

25%

13%

12%
17%

23%

27%

26%

29%

28%

Q1'15

Q2'15

Q3'15

Q4'15

Seed / Angel

Series A

Series B

Series C

Series D

Series E+

Other

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

48

CALIFORNIA VENTURE-BACKED FINTECH INVESTMENTACTIVITY
Top Deals & Cities, 2015

Top Deals
California Fintech Investment Activity

SoFi

VC-Backed Companies, Q4’14 – Q4’15$1B // Series E$2,0006052$1,80047$1,600$1,400$1,200

50

35

35

34

40

$275M // Series B

30

$800
20

$600

$400

$-

$500M // Series C

Affirm$1,000$200

Zenefits

10$635$1,177$1,795$1,522

$623

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($M)

Top Cities
San Francisco
79 Deals // $3.7B

0

Deals

Palo Alto
12 Deals // $322.9M

Los Angeles
8 Deals // $156.5M
Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

49

NEW YORK VENTURE-BACKED FINTECH INVESTMENTACTIVITY
Top Deals & Cities, 2015

Top Deals
New York Fintech Investment Activity

Betterment

VC-Backed Companies, Q4’14 – Q4’15

17

$180

$160

$60M // Series D

15

15

15

18

ShopKeep

16$60M // Series D

$140

14

$120

12

$100

10

8

$80

8

$60

6

$40

4

$20
$-

$46

$97

$74

$162

$122

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($M)

2

CommonBond$35M // Series B

Top Cities
New York
50 Deals // $442.4B

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH50

In 2015

EUROPEAN
VC-backed fintech companies raised$1.5 billion©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

51

Second straight year of $1B+ investment in European fintech
European VC investment in fintech hit $1.5 billion in 2015, making it
the second year in a row that fintech companies have achieved over
$1 billion in funding in the region. While Europe represents a smaller
amount of VC investment than North America or Asia, the significant
growth year-over-year suggests that fintech interest is increasing
rapidly.
Part of Europe’s fintech challenge historically has been the ability togrow businesses to scale. With a wide variety of cultures, languages
and regulatory environments – the ability to grow startups issomewhat hindered. This has been slowly easing as a result of
growing collaboration aimed at reducing regulatory barriers andincreasing banking sector efficiencies across Europe. Initiatives likethe Single Euro Payment Area, the Payment Services Directive 2
and the promotion of a single digital market are helping to create astronger environment for fintech companies to thrive in the future.
While regulatory issues are being addressed, individual countries
are working to create and foster fintech ecosystems with the beliefof the sector’s massive potential. Business accelerators andincubators – such as the Copenhagen Fintech Innovation Research
Association, Holland Fintech, Fintech France and Level39 in London
are working to not only foster fintech companies, but to increase
collaboration across the fintech space in Europe.
Late-stage deal size grows in Q4
Somewhat unexpectedly, average late-stage deal size grew inEurope in Q4, reaching a 5-quarter high of $18.6 million and making
the third straight quarter where average deal size topped $15
million. This highlights a growing trend toward late-stage financings– a fact that bodes well for European fintech. As fintech becomes
more prevalent in Europe, late stage financings may continue togrow in size.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Corporate participation in fintech minimal in Europe
When it comes to VC investment in fintech in Europe, corporates
account for only a very small portion. In fact, for 4 of the last 5
quarters, corporates accounted for under 15 percent of all fintech
deals – much less than in North America and in Asia. Q4 saw
corporate investment in fintech sink to a new low of 10 percent. This
lack of involvement of corporates could reflect banks’ focus on othermajor monetary issues in Europe beyond technology innovation.
Shifting the view – fintech as an enabler
It is only in the last year or so that some major banks have begun
looking to fintech as potential enablers of change within their own
organizations. Many of the big banks in Europe have ringfenced
funds to invest in fintech, although those funds have been slow toflow as banks work out related governance issues. At the sametime, some banks are going with different models, becoming
customers of fintech companies rather than investors in thosecompanies. In these cases, funding to fintech may be flowing
through their digital spend rather than through their VC arms.
Looking ahead
Over the next few years, fintech investment is expected to continue
to grow in Europe, with corporate investors potentially taking moreinterest as other monetary and macroeconomic issues in Europe
settle down. At the same time, insurance-tech as an industry is likely
to grow, with many insurance companies in Europe ripe for thesame levels of transformation as banking.

#FINTECH

52

VC-BACKED EUROPEAN FINTECH FUNDING HITS NEW
HIGH
VC-backed fintech companies in Europe raised $1.48B in funding across 125 deals in 2015. It was thesecond straight year of $1B+ invested in European fintech companies as deal activity rose 30% on a yearover-year basis.

European Annual Financing Trends to VC-Backed Fintech Companies
2011 – 2015

$1,600125$1,400120

96$1,200$1,000

70

$800
$600

$400

100

80

70

60

35

40
20

$200
$-

140

$360

$270

$246

$1,111$1,477

2011

2012

2013

2014

2015

Investment ($M)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

53

FINTECH FUNDING AND DEALS IN EUROPE DROP IN
Q4’15
Q4’15 a 5-quarter funding low in Europe as funding activity fell 31% from the quarter prior. Deals havetrended at 30+ to VC-backed fintech companies for the past 4 quarters.

European Quarterly Financing Trends to VC-Backed Fintech Companies
Q4’14 – Q4’15

$500

40

34

$450

30

$400

31

30

30

$350
$300

25

21

$250

20

$200

15

$150

10

$100
$50

$-

35

5

$379

$344

$384

$442

$306

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($M)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH54

“Access to different exit strategies is
attractive to VCs. As the level of interest
from banks and insurers grows, this will
mean there are far more exit strategies. It
won’t just be an IPO play.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Warren Mead
Global Co-Leader of Fintech,
KPMG International, Partner,
KPMG in the UK#FINTECH

55

EUROPEAN FINTECH SEED DEAL SHARE SPIKES IN
Q4’15
Seed deal share in European fintech companies rose for the second consecutive quarter to 42% in Q4’15.
Series A activity took one-fifth of all fintech deals in Q4’15, after taking 30%+ of all deals in 3 of the past 4
quarters.

European Quarterly Deal Share by Stage
Q4’14 – Q4’15

10%
5%
14%

10%
3%
3%
10%

17%
3%
7%

12%
9%

24%

38%
40%

30%

33%

Q4'14

23%

23%

Q1'15

Q2'15

Seed / Angel

6%
6%
6%
3%

9%

10%

20%

16%

Series A

Series B

Series C

19%

18%
42%

29%

Q3'15
Series D

Series E+

Q4'15
Other

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

56

EUROPEAN EARLY-STAGE FINTECH DEAL SIZES FALL
IN SECOND HALF OF 2015
Early-stage median deal size in Europe fell below $2M in Q3’15 and Q4’15 after a spate of larger Series
A’s pushed Q2’15’s median to $6.7M.

European Early-Stage Fintech Deal Size
Q4’14 – Q4’15
$5.4

$5.2
$4.1

Q4'14

Q1'15

Q2'15

$1.6

$1.7

Q3'15

Q4'15

Median Early-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

57

EUROPEAN LATE-STAGE FINTECH DEAL SIZESMINISCULE COMPARED TO NORTH AMERICA’SMedian late-stage fintech deal sizes in Europe have stayed under $20M in each of the last 5-quarters.
North America median fintech deal sizes have topped $30M in each of the same 5 quarters.

European Late-Stage Fintech Deal Size
Q4’14 – Q4’15

$19.5

$19.5

$15.0

$14.0

$12.0

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Median Late-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

58

THE 10 LARGEST EUROPEAN FINTECH ROUNDS OF 2015
REPRESENTED OVER $746M IN FUNDING

iZettleMobile payments company
Series D$67.3M

Atom Bank
Online-only bank
Series B
RateSetter
Peer-to-peer lending service
Unattributed-II
TransferWise
Online money transfer
Series C
Ebury Partners
FX/currency services forbusinesses
Private Equity
WorldRemit
Online money transfer
Series B

Kreditech
Online lender
Series C$128M$92.2M

RaisinMarketplace for term deposits
Series B$22M$29.6M
$58M
$83M
$100M
$150M

$34.4M

Funding Circle
Peer-to-peer lending service
Series E
Pret d'Union
Online credit marketplace
Series D©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firmvis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member
firm. All rights reserved.

#FINTECH

59

CORPORATE PARTICIPATION IN EUROPEAN FINTECHDEALS DROPS TO 10% IN Q4’15
While corporates participated in one-quarter of all deals to VC-backed fintech companies, participation
was much smaller in Europe, where corporate participation has fallen below 15% in 4 of the past 4
quarters outside of a rise in corporate participation in Q3’15.

CVC Participation in European Deals to VC-Backed Fintech Companies
Q4’14 – Q4’15

14%

14%

10%

86%

86%

90%

Q4'14

Q1'15

Q2'15

10%
28%

90%

72%

Other Investors

Q3'15

Q4'15

Corp / CVC Deal Participation

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

60

INDEX VENTURES, BALDERTON CAPITAL ARE MOST
ACTIVE VC INVESTORS IN EUROPEAN FINTECH
No investor was more active in European fintech since 2011 than Index Ventures and Balderton Capital,
which invested in Transferwise, Funding Circle and iZettle among others. Accel Partners rounded out the
top three most active European fintech VCs.

Most Active VC Investors in European Fintech Companies
2011 - 2015

Rank

Investor

Rank

Investor

1

Index Ventures

8

Point Nine Capital

1

Balderton Capital

8

83North3

Accel Partners

8

Draper Esprit

4

Northzone Ventures

8

Route 66 Ventures

4

Octopus Ventures

13

Anthemis Group

4

Holtzbrinck Ventures

13

Passion Capital

4

SpeedInvest

13

Notion Capital

8

High-Tech Gruenderfonds

13

General Atlantic

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

61

“Regulators seem very open to newalternatives when dealing with financial
services. Sure, they need to put inchecks and balances, but I don’t think
regulators will be barrier to adoption of
new technologies.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Arik Speier

Co-Leader, KPMG EnterpriseInnovative Startups Network andHead of Technology,
KPMG in Israel#FINTECH

62

UK VC-BACKED FINTECH INVESTMENT ACTIVITY
Top Deals & Cities, 2015

Top Deals
UK Fintech Investment Activity

Funding Circle

VC-Backed Companies, 2011 – 2015

$1,200$150M // Series E
61$1,000

42

$800

31

$600

32

70

Atom Bank

60$128M // Series B

50

WorldRemit

40$100M // Series B

30
$400

16

20

$200
$-

10

$162

$158

$101

$409

$962

2011

2012

2013

2014

2015

Investment ($M)

Top Cities
London50 Deals // $743.7M

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

63

GERMANY VC-BACKED FINTECH INVESTMENT ACTIVITY
Top Deals & Cities, 2015

Top Deals
Germany Fintech Investment Activity

Kreditech

VC-Backed Companies, 2011 – 2015$92.2M // Series C

$250

25

21

$22M // Series B

$200

20

15

$150

12
9

$100

$50

$-

5

$13

$18

$44

$101

$193

2011

2012

2013

2014

2015

Smava

15

$16M // Series C

10

Top Cities

5

Investment ($M)

RaisinBerlin10 Deals // $79.1M

0Hamburg
5 Deals // $109.7M

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

64

“We are seeing greater cooperation at alllevels and a rapid build-up of fintech
ecosystems, both locally and acrossEurope. By way of a local example, theFintech & Payments Association of
Ireland was founded in September and isalready making tremendous progress
bringing together fintechs, financial
institutions, policy makers andgovernment to collaboratively drive
solutions and promote growth.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Anna ScallyPartner, Head of Technology, Mediaand Telecommunications,and Fintech Leader,
KPMG in Ireland#FINTECH

65

In 2015

ASIAN
VC-backed fintech companies raised$4.5 billion©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

66

Mega-rounds propel Asia to quadruple fintech investment
in 2015
Asia’s fintech investment jumped significantly in 2015, rising from $1.1 billion to $4.5 billion year-over-year. Much of this investment camein Q2 and Q3, when investment reached $2.2 billion and $1.6 billion respectively. These substantial quarters were buoyed by a significant
rise in $50m+ deals, including One97, Dianrong, BankBazaar and others.
Similar to other regions of the world, fintech investment in Asia slowed during the last quarter of 2015, falling from $1.6 billion down to just$400 million; although this slowdown is not expected to affect fintech for long given investor interest all over Asia. While China and India
are leaders in Asia, Singapore and Hong Kong represent burgeoning fintech hubs as well. Even Japan and Taiwan, considered laggards
in fintech investment, are coming around. Their local regulators are currently investigating fintech opportunities in order to see how they
can use fintech to accelerate innovation.
Corporates focusing on under-banked and non-banked populations
When it comes to fintech, companies in Asia are spurred by a diverse range of market drivers and incentives. While corporates in moremature regions of the world typically see fintech companies as a disruptor to traditional banking, in Asia there is a much broader focus on
fintech as an enabler for existing companies to extend their market share and to gain customers among the non-banked and underbanked populations. Companies in Singapore and India have been leading this charge – propelled by digital opportunities and theincreasing use of mobile, even in remote regions.
As a result, corporate investment in Asia is significantly higher than in Europe and even the US. In Q4, corporates participated in 40
percent of VC deals in Asia – down from a high of 47 percent in Q4.
China explodes onto fintech scene
During 2015, China’s fintech investment exploded – growing from just above $600 million in investment in 2014 to almost $2.7 billion in
2015. The significant rise can be attributed to numerous $100+ deals, including Zhong An ($931m in PE funding), Lu.com ($485 million in
PE funding) and Dianrong ($207 million in Series C funding). While many of China’s deals focused on Beijing, Shanghai and Shenzhenalso accounted for significant deals, suggesting that fintech hubs may grow in several Chinese locations.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

67

Mega-rounds propel Asia to quadruple fintech investment
in 2015 (Cont.)
Partnership and collaboration is seen as a major driver of fintech in China – with many banks and insurance providers active in the space.
In particular, Chinese banks are focusing their strategies around the small and mid-sized enterprise space, an area that has been
underserviced by large banks in the past. At the same time, there’s also increasing interest in fintech companies that offer alternative
financing arrangements, giving consumers alternatives beyond traditional banks. This is especially true in remote areas where large
percentages of the population are under-banked.
The Chinese government is taking a particular interest in driving fintech in a responsible manner. The government is conscious of theneed to stabilize the market while enabling companies to innovate and expand. It is expected that over time, there will be more
consolidation within fintech in China as non-performing startups fade away and larger ones grow and prosper as a result of corporate
investment and partnerships.
Opportunities abound in India’s fintech market
In tandem with China, India’s fintech investment also grew exponentially from $247 million in 2014 to over $1.5 billion in 2015. Mumbai
and Bangalore attracted the most fintech investment. India’s growth may be somewhat linked to the positive take the country’s banking
regulator has taken on alternative banking providers. In 2015, it issued 21 banking licenses primarily to companies looking to harness
technology to serve underbanked and non-banked populations.
India’s traditional banks have also increased their focus on fintech opportunities and using fintech to spur internal innovation. The largest
bank in India, in particular, set up a special fintech branch. It has exposed their APIs to fintech companies and has said if companies
come forward with a related revenue generation model, it will look to implement it within the bank.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

68

ASIA: 2015 FINTECH FUNDING TOPS $4.5B;
QUADRUPLES 2014 TOTAL
Funding to VC-backed fintech companies in Asia exploded to hit $4.52B in 2015 across 130 deals. The
spike was attributed to a notable rise in $50M+ fintech deals, which included One97, Dianrong, and
BankBazaar, among others.

Asian Annual Financing Trends to VC-Backed Companies
2011 – 2015

$5.0

130

119

$4.5

140
120

$4.0

100

$3.5
$3.0

71

80

$2.5
60

49

$2.0
$1.5
$1.0
$0.5

$-

40

21
20

$0.2
2011

$0.3

$0.3

$1.1

$4.5

2012

2013

2014

2015

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

69

ASIAN FUNDING DOLLARS TO VC-BACKED FINTECHCOMPANIES DIVES IN Q4’15
After hitting $1B+ in both Q2’15 and Q3’15, Asian fintech funding fell $1B in Q4’15 from the quarter prior.
The steep drop of 75% came despite a smaller decrease of just 18% in deal activity.

Asian Quarterly Financing Trends to VC-Backed Companies
Q4’14 – Q4’15

$2.5

$2.0

36

40

36

32

31

35
30

27

25

$1.5

20
$1.0

15
10

$0.5

5
$-

$0.4

$0.4

$2.2

$1.6

$0.4

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Investment ($B)

0

Deals

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

70

“In the past, companies looked atwestern business models as bestpractices and tried to figure out how toreplicate them in Asia. I think you will
increasingly see new business models
coming out of Asia looking to take onenterprise market or consumer market.
This is being driven by mobile
technologies.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

Irene Chu
Partner, Head of High GrowthTechnology & Innovation Group,
KPMG in Hong Kong

#FINTECH

71

ASIAN FINTECH SEED DEAL SHARE FALLS TO FIVEQUARTER LOW
As fintech emerges in Asia, deal activity has shifted toward the mid-stage as Q4’15 saw Series B and
Series C stage activity combine to take 29% of activity. In the same quarter, fintech seed deal share fell toa 5-quarter low of 16%.

Asian Quarterly Fintech Deal Share by Stage
Q4’14 – Q4’15

10%
3%
3%

11%
3%

22%

22%

31%

8%
6%

16%
3%
7%

14%

11%
11%

25%

26%

31%

Q4'14

39%

26%

Q2'15

Q1'15
Seed / Angel

13%
3%
3%
10%

Series A

Series B

Series C

Series D

22%

19%

31%

35%

19%

16%

Q3'15

Q4'15

Series E+

Other

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

72

EARLY-STAGE FINTECH DEALS RISE FOR FOURTHSTRAIGTH QUARTER IN Q4’15
The median early-stage fintech deal size in Asia rose for the fourth straight quarter to $4.5M in Q4’15. The
Q4’15 deal size high was 543% larger than the median early-stage fintech deal in the same quarter lastyear.

Asian Early-Stage Deal Size
Q4’14 – Q4’15

$4.5
$3.5
$2.3

$2.5

$0.7

Q4'14

Q1'15

Q2'15

Q3'15

Q4'15

Median Early-Stage Deal Size ($M)

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH73

“[In Asia], each country is developing its
own fintech agenda. Some are moremature than others. All are trying tounderstand how they can leverage
fintech to build a sustainable ecosystem
and accelerate their support of regionaland global markets without negatively
impacting existing financial services.”©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

James McKeogh
Partner, Management
Consulting, KPMG in
Hong Kong#FINTECH

74

THE 10 LARGEST ASIAN FINTECH ROUNDS OF 2015
REPRESENT OVER $3.6B IN FUNDING
Meili Jirong
Peer-to-peer lending service
Series A

Qufenqi
Installment-based online
shopping platform
Series D, E

$300M
$158M

Rong360
Online financial
recommendation and search
Series D$65M$84M

JimuBoxPeer-to-peer lending service
Series C$1.255B

$931M

$485M

$207M

DianRong
Peer-to-peer lending service
Series C

$80M

Wacai
Personal finance management app
Series B - II

$77M

Lu.comPeer-to-peer lending service
Private Equity

One97 Communications
Mobile commerce platform
Corporate Minority I, II, III©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firmvis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member
firm. All rights reserved.

Zhong An Insurance
Online property and casualty insurer
Private Equity

Dashu Finance
Online micro loan service
Series B#FINTECH

75

ASIAN CORPORATES REMAIN ACTIVE, ACCOUNT FOR
40% OF ALL FINTECH DEALS
With the presence of Alibaba, Tencent, Baidu, Rakuten and others, corporates participated in 40% of all
financing deals to Asian VC-backed fintech companies in Q4’15. Corporates participated in nearly half ofall deals to VC-backed fintech companies in Q3’15.

CVC Participation in Asian Deals to VC-Backed Fintech Companies
Q4’14 – Q4’15

41%

59%

Q4'14

31%

69%

Q1'15
Other Investors

42%

47%

58%

53%

Q2'15

Q3'15

40%

60%

Q4'15

Corp / CVC Deal Participation

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

76

ACCEL PARTNERS, EAST VENTURES, SEQUOIA CHINA
TOP MOST ACTIVE ASIAN FINTECH VCs
There was a three-way tie for most active VC in Asian fintech companies since 2011 between Accel
Partners, East Ventures, and Sequoia Capital China. 500 Startups and Sequoia India rounded out the top
5.

Most Active VC Investors in Asian Fintech Companies
2011 – 2015

Rank

Investor

Rank

Investor

1

Accel Partners

7

IDG Capital Partners

1East Ventures

10

Blume Ventures1

Sequoia Capital China

10

GMO Venture Partners

4500 Startups

10

Jungle Ventures4

Sequoia Capital India

10

AppWorks Ventures

6

Life.Sreda

10

Kalaari Capital

7

Golden Gate Ventures

15

Mitsubishi UFJ Capital

7

CyberAgent Ventures

Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

77

CHINA VC-BACKED FINTECH INVESTMENT ACTIVITY
Top Deals & Cities, 2015

Top Deals
China Fintech Investment Activity

Zhong An

VC-Backed Companies, 2011 – 2015

$3,000$931M // Private Equity

37$2,50026$2,000$1,500

$500
$-

35

$485M // Private Equity

30

Dianrong

25$207M // Series C

15

10
5
$108
2011

Lu.com20

16$1,000

40

$205

$198

$619

$2,675

2012

2013

2014

2015

Investment ($M)

Top Cities

10

Beijing5

12 Deals // $704M

0Shanghai
5 Deals // $1.6B

Deals

Shenzhen
2 Deals // $127M
Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

78

INDIA VC-BACKED FINTECH INVESTMENT ACTIVITY
Top Deals & Cities, 2015

Top Deals
India Fintech Investment Activity

One97

VC-Backed Companies, 2011 – 2015

$680M // Corporate Minority$1,60043$1,40045$60M // Series C

35$1,000

30

25

$800
$600

15

25

17

20
15

7

10

$200
$-

BankBazaar

40$1,200

$400

50

$31

$17

$24

$247

$1,502

2011

2012

2013

2014

2015

Investment ($M)

PolicyBazaar$40M //Series D

Top Cities
Bangalore

5

11 Deals // $57M

0

MumbaiDeals

9 Deals // $79M

Gurgaon
6 Deals // $32M
Source: The Pulse of Fintech, 2015 in Review, Global Analysis of Fintech Venture Funding, KPMG International and CB Insights (data provided by CB Insights) March 9th, 2016.
©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

#FINTECH

79

METHODOLOGY – WHAT’S INCLUDED? WHAT’S NOT?
CB Insights and KPMG International encourage you to review the methodology and definitions employed
to better understand the numbers presented in this report. If you have any questions about the definitions
or methodological principles used, we encourage you to reach out to CB Insights directly. Additionally, if
you feel your firm has been under-represented, please send an email to info@cbinsights.com and we canwork together to ensure your firm’s investment data is up-to-date.
What is included:

What is excluded:– Equity financings into emerging fintech companies. Fundings must be
put into VC-backed companies, which are defined as companies who
have received funding at any point from either: venture capital firms,
corporate venture group or super angel investors.

– No contingent funding. If a company receives a commitment for $20M
subject to hitting certain milestones but first gets $8M, only the $8M is
included in our data.

– Fundings of only private companies. Funding rounds raised by publiccompanies of any kind on any exchange (including Pink Sheets) areexcluded from our numbers even if they received investment by aventure firm(s).
– Only includes the investment made in the quarter for tranchedinvestments. If a company does a second closing of its Series B roundfor $5M and previously had closed $2M in a prior quarter, only the $5M
is reflected in our results.
– Round numbers reflect what has closed – not what is intended. If a
company indicates the closing of $5M out of a desired raise of $15M,
our numbers reflect only the amount which has closed.

– Only verifiable fundings are included. Fundings are verified via(1) various federal and state regulatory filings; (2) direct confirmation
with firm or investor; or (3) press release.
– Previous quarterly VC reports issued by CBI have exclusively included
VC-backed rounds. In this report any rounds raised by VC-backed
companies are included, with the exceptions listed.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

– No business development / R&D arrangements whether transferable
into equity now, later or never. If a company signs a $300M R&D
partnership with a larger corporation, this is not equity financing nor is itfrom venture capital firms. As a result, it is not included.
– No buyouts, consolidations and recapitalizations. All three of thesetransaction types are commonly employed by private equity firms andare tracked by CB Insights. However, they are excluded for the
purposes of this report.
– No private placements. These investments, also known as PIPEs(Private Investment in Public Equities), even if made by a venture
capital firm(s).
– No debt / loans of any kind (except convertible notes). Venture debt or
any kind of debt / loan issued to emerging, startup companies, even if
included as an additional part of an equity financing is not included. If a
company receives $3M with $2M from venture investors and $1M in
debt, only the $2M is included in these statistics.
– No government funding. Grants, loan or equity financings by the federal
government, state agencies or public-private partnerships to emerging,startup companies are not included.

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KPMG ENTERPRISE INNOVATIVE STARTUP NETWORK.
FROM SEED TO SPEED WE’RE HERE THROUGHOUTYOUR JOURNEY

Contact us:
Brian Hughes

Co-Leader, KPMG EnterpriseInnovative Startups Network
E: bfhughes@kpmg.com

Arik Speier

Co-Leader, KPMG EnterpriseInnovative Startups Network
E: aspeier@kpmg.com©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

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81

KPMG Fintech Global Network

Netherlands
IrelandGermanyUK
Luxembourg

IsraelUSA
Hong Kong

Contact us:
India

Warren Mead
Global Co-Leader of Fintech,
KPMG International
E: warren.mead@kpmg.co.uk

Ian Pollari

Global Co-Leader of Fintech,
KPMG International
E: ipollari@kpmg.com.au©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

South Africa
Australia#FINTECH

82

AboutKPMG Enterprise
You know KPMG, you might not know KPMG Enterprise.
KPMG Enterprise advisers in member firms around the world are dedicated to working with businesses like yours. Whether you’rean entrepreneur looking to get started, an innovative, fast growing company, or an established company looking to an exit, KPMG
Enterprise advisers understand what is important to you and can help you navigate your challenges – no matter the size or stage ofyour business. You gain access to KPMG’s global resources through a single point of contact – a trusted adviser to your company.
It’s a local touch with a global reach.
The KPMG Enterprise global network for innovative startups has extensive knowledge and experience working with the startup
ecosystem. Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory
requirements - we can help. From seed to speed, we’re here throughout your journey.
KPMG Fintech
In today’s fast-paced Financial Services(FS) sector, technology-based businesses and solutions offer Financial Institutions theopportunity to telescope their appetite for innovation and create powerful new business models that can enhance bottom line
performance for customers and shareholders alike. KPMG professionals use the combined strength of our renowned FS sector
insight, global network of knowledge and experience and our global relationships with the Fintech startup community to help you
identify the partnership, equity investment or full acquisition opportunities that are specifically focused on your needs andopportunities. Once you have made the strategic decision to transform your organization, KPMG professionals work with you to
implement your transformational agenda at the operational level and help ensure that you realize the full benefits of your fintech
strategy.

©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

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83

Acknowledgements:
We acknowledge the contribution of the following individuals who assisted in the development of this publication:
Dennis Fortnum, Global Head of KPMG Enterprise, KPMG International
Arik Speier, Co-Leader, KPMG Enterprise Innovative Startups Network, and Head of Technology, KPMG in Israel
Brian Hughes, Co-Leader, KPMG Enterprise Innovative Startups Network, and National Co-Lead Partner, KPMG Venture Capital
Practice, KPMG in the US
Ian Pollari, Global Co-Leader of Fintech, KPMG International, Partner and National Sector Leader, Banking, KPMG in Australia
Warren Mead, Global Co-Leader of Fintech, KPMG International, Partner and Head of Challenger Banks, KPMG in the UK
Anna Scally, Partner, Head of Technology, Media and Telecommunications, and Fintech leader, KPMG in Ireland
Conor Moore, National Co-Lead Partner, KPMG Venture Capital Practice, KPMG in the US
Dorel Blitz, Head of Fintech, KPMG in Isreal
Eric Anklesaria, Partner, KPMG in India
Fiona Grandi, Financial Services FinTech Leader, KPMG in the US
Irene Chu, Partner, Head of High Growth Technology & Innovation Group, KPMG in Hong Kong
James McKeogh, Partner, Management Consulting, KPMG in Hong Kong
Jan Reinmueller, Principal Advisor, and Head of Innovation Ventures, KPMG in Singapore
Sven Korschinowski, Partner, Financial Services, KPMG in Germany
Blockchain specialists:
David L. Montes, Partner, KPMG in the US
Eamonn Maguire, Partner, KPMG in the US
Joe Cassidy, Partner, KPMG in the UK©2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.

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FOR ALL DATA INQUIRIES EMAIL CB INSIGHTS AT
INFO@CBINSIGHTS.COM
TO CONNECT WITH A KPMG ADVISER IN YOURREGION EMAIL ENTERPRISE@KPMG.COM

kpmg.com/fintechpulse [website]@kpmg [Twitter]

www.cbinsights.com [website]@cbinsights [Twitter]© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member
firm third parties, nor does KPMG International have any such authority to obligate or bind any member
firm. All rights reserved.
The information contained herein is of a general nature and is not intended to address the circumstances ofany particular individual or entity. Although we endeavor to provide accurate and timely information, there
can be no guarantee that such information is accurate as of the date it is received or that it will continue tobe accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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