About Techcelerate Ventures
Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
Q2 2020
Sector
Update
Fintech
Important disclosures appear at the back of this report
GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority
GP Bullhound Inc is a member of FINRA
2
We publish this quarterly fintech market report to provide quantitative insights into public and private market valuations across the transaction
spectrum and qualitative insights into company business models, technology and customer trends.
In our Q2 report, we discuss certain trends that highlight some of the COVID tailwinds, such as digital payments and online trading, while also
bringing back to focus insurtech. Additionally, we cover the re-imagining of the finance function through software, as well as feature
CEO/Founder profiles from companies in the wealth management, insurtech and challenger banking spaces.
Based in our London office, Claudio Alvarez heads up our fintech practice, which has completed over 20 transactions involving both equity
and debt. Several of our recent fintech advisory transactions and investments are showcased below:
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and
capital to category leaders
Fintech perspectives
EXECUTIVE SUMMARY
Mambu
INVESTMENT BY
Bessemer Venture Partners
€30 million
Meniga
INVESTMENT BY
Groupe BPCE
Undisclosed
EcoVadis
INVESTMENT BY
CVC Growth Partners
$200 million
GP Bullhound
INVESTMENT IN
Revolut
$10 million
Motif
ACQUIRED BY
Charles Schwab
Undisclosed
3
Key sector takeaways
Recent fintech transaction trends
Public market fintech analyses
Fintech CEO & founder commentary
Appendix A: Fintech trading comparables by category
Appendix B: GP Bullhound fintech credentials & team
1
3
4
5
6
Contents
2
Appendix C: GP Bullhound corporate overview
7
4
Section 1
Key sector takeaways
5
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Digital payments: cash is no longer king
1
2
3
Insurtech: a disrupter and an enabler
Market volatility creates a strong tailwind for trading platforms
4
The CFO's tech stack: how fintech is reinventing the role of the finance function
6
GP Bullhound’s views on current trends in fintech
KEY TRENDS
1
Digital payments: cash is no longer king
Source: Capital IQ, MergerMarket, Pitchbook
(1) As of 30 June 2020
▪ The global payments ecosystem has proven resilient in the face of the
pandemic as many of the sector’s biggest players are spread across
multiple verticals, providing them with something of a hedge.
▪ However, for payments companies targeting the verticals hardest hit by the
lockdowns and social distancing restrictions, such as travel (airlines, OTAs,
and accommodation), restaurants, in-store retail, events and
entertainment, COVID-19 has created immediate challenges. In the short-
term, this is likely to force companies to make changes to their operating
models as total payment volumes shrink and they experience greater
demand on customer service teams.
▪ We expect the pandemic to represent a turning point for the payments
industry, as companies that have heavily invested in digital and mobile
technologies thrive, driven by a positive impact on volumes as e-commerce
penetration explodes with the shift from offline to online commerce
accelerated by 5–10 years. In Europe, shares in Adyen have jumped by
95%(1) in last 12 months, whilst in the US, Shopify has risen by 212% (1).
▪ Long-term, this step change in consumer behaviour should drive digital
innovation, forcing many traditional players to fast-track innovation efforts
and most likely lead to further consolidation in the sector.
JUN-20
PRIVATE PLACEMENT
$150M
APR-20
PRIVATE PLACEMENT
$850M
APR-20
ACQUISITION
$1,200M
MAY-20
PRIVATE PLACEMENT
£19M
7
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ, MergerMarket, Pitchbook
(1) As of 02 July 2020
(2) Forbes, “Fintech Insurer Lemonade Valued At More Than $2 Billion After $300 Million Funding Deal”, April 2019
2
Insurtech: a disrupter and an enabler
▪
In the near-term, we expect the economic slowdown and rise in
unemployment to put the brakes on insurer growth with downward
pressure on premiums driven by fewer policy-buyers.
▪
In a flat market, for insurers to maintain the growth momentum in recent
years, they must continue to focus on improving operational efficiency by
investing in new technology to digitalise key value chain operations and
improve customer experience as distribution continues to trend towards
direct and digital.
▪ Long-term, we believe COVID-19 will accelerate opportunities for many
start-ups as traditional players look to B2B insurtech startups to help
transform their digital capabilities and improve insurer’s competitive
positioning and bottom line.
▪ Full-stack Insurtech innovation and digital adoption curve is often viewed
to be behind that of the broader fintech sector due to the capital-
intensive nature of operations. In recent months, we note a flurry of
fundraisings with start-ups gaining traction with investors as they are now
able to prove their unit economics at scale.
▪ This quarter, Lemonade, the full stack Israeli-based start-up backed by
SoftBank, which is harnessing technology to provide homeowners and
renters insurance, filed to go public and more than doubled its valuation
on the first morning of trading. The valuation of $3.8bn (1) is well beyond the
$2bn valuation Series D fundraise in April 2019 (2).
JUL-20
IPO
APR-20
PRIVATE PLACEMENT
$50M
APR-20
PRIVATE PLACEMENT
$55M
MAY-20
PRIVATE PLACEMENT
$95M
8
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ; MergerMarket; Pitchbook
(1) City AM, “Robinhood delays UK launch amid pandemic popularity”, June 2020
3
Market volatility creates a strong tailwind for trading platforms
▪ The coronavirus pandemic and resulting stock market volatility has proved
fruitful for trading platforms such as Robinhood, which added a record 3m
new customers in Q1 2020 alone and generated $60m in revenue in March
— three times that of the month before.(1) This strong performance in Q1
2020 was in part what allowed Robinhood to raise its $280m Series F at a
valuation of $8.3bn.(1)
▪
In Europe, other platforms like Interactive Investor, Freetrade, BUX and
Trade Republic, which raised €62m in April this year and plans on
expanding into the banking field, intend to build up a European platform
for mobile saving, investing and trading.
▪ Although zero-commission trading has been a US phenomenon for longer,
we believe platforms in Europe will continue to adopt this model to gain
users and volume. However, we see the inability of the UK players to sell
their order flow (as Robinhood does in the US) as a major limiting factor in
the business model. Time will tell how sustainable the commission-free
model is in Europe without having a much broader consumer proposition,
which could be why Trade Republic may want to broaden its market
proposition and challenger banks such as Revolut may be in a better
position to offer trading as a bundled service.
APR-20
PRIVATE PLACEMENT
€62M
JUN-20
ACQUISITION
UNDISCLOSED
MAY-20
CROWDFUNDING
£7M
MAY-20
PRIVATE PLACEMENT
$280M
9
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ, MergerMarket, Pitchbook
4
The CFO's tech stack: how fintech is reinventing the role of the finance function
▪ The difficult trading environment caused by the COVID-19 pandemic has
put pressure on companies to make important strategic decisions on how
to cut costs, manage cash flows and plan resources to keep their
companies afloat. The CFO role has continued to evolve in recent years,
as they are now considered key strategic decision makers alongside CEOs,
and increasing time is spent analysing the vast array of data a business
generates to provide a basis of analysis for the CEO to make these critical
decisions.
▪
In the past decade, we have seen the first wave of fintech platforms
targeting consumers, many of which are now household names. Recently,
we note strong momentum in the B2B market and more specifically in the
‘CFO tooling’ space. We believe these solutions are a catalyst for a
transformative change across all finance functions.
▪ We identify five segments where fintech is playing a big role in the
corporate world: accounting, loans and invoice finance, expense
management, resource planning, and corporate banking. A lot of market
parameters are set to keep these segments growing, such as the use of
open banking data in credit decisions or the high rate of adoption of
cloud platforms.
▪ Fundraising activity this quarter demonstrates the traction that this segment
of fintech is getting. Fundbox, the US-based start-up for a credit and cash
flow management platform, raised $200m, while Brex, which offers a
corporate credit card with an expense management platform, raised
$150m, led by DST and Lone Pine Capital.
JUN-20
PRIVATE PLACEMENT
$210M
MAY-20
PRIVATE PLACEMENT
$150M
MAY-20
PRIVATE PLACEMENT
$200M
JUN-20
PRIVATE PLACEMENT
$50M
10
Section 2
Recent fintech transaction trends
11
0
400
800
1,200
1,600
2,000
0
10
20
30
40
50
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Total capital invested (LHS)
Volume (RHS)
0
50
100
150
200
250
300
350
400
0
20
40
60
80
100
120
140
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Value (LHS)
Volume (RHS)
0%
20%
40%
60%
80%
100%
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Americas
Europe
Asia
Other
M&A deal value by region
Fundraising deal value by region
$bn, number of deals
$bn, number of deals
0%
20%
40%
60%
80%
100%
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Americas
Europe
Asia
Other
Activity levels remain steady despite COVID-19 pandemic
M&A AND FUNDRAISING ACTIVITY BY QUARTER
Transaction M&A deal value and volume
Fundraising deal value and volume
Source: Pitchbook as of 30 June 2020
Note: Data includes all ‘fintech’ M&A & fundraising deals and IPOs as defined by Pitchbook regardless of geography or transaction size
(1) Spike in the M&A value in Q3 2019 was caused by four extraordinarily large transactions with an aggregate value of $94bn (Worldpay/FIS ($35.5bn), First Data/Fiserv ($22bn), Total
System Services/Global Payments ($21.5bn), Refinitiv/LSE ($14.8bn)) (2) Spike in fundraises value in Q2 2018 was caused by an extraordinarily large investment in Ant Financial ($14bn)
(1)(2)With the easing of lockdown restrictions and acceleration of digital adoption as a result of the enforced lockdowns, we believe the
fintech landscape is ripe for further consolidation and investment in new innovations in the coming quarters.
12
Slowdown in M&A, but significant transactions still completing
Deal date
Target
Buyer
Target description
EV ($m)
Implied EV/LTM Rev
30-Jun-20
Administrative and financial management platform for
freelance workers
-
-
29-Jun-20
Personal wealth management and financial planning
platform
1,000
8.3x
23-Jun-20
Cloud-based real-time financial data aggregation and
insight platform
985
-
02-Jun-20
Interest free ‘buy now pay later’ payment solutions
269
-
28-May-20
Payment fraud detection and prevention for e-
commerce players
156
-
18-May-20
Financial technology software for the wealth
management industry
120
-
12-May-20
Online financial marketplace to invest in the venture
asset class through mutual funds
160
-
08-May-20
Investment platform for thematic investing
-
-
29-Apr-20
Tech-enabled solutions and services for the back and
middle office administration
116
-
20-Apr-20
POS application enabling and simplifying business
payments
130
-
14-Apr-20
Digital transactions management solutions
160
3.0x
07-Apr-20
Payment processing platform with AI fraud detection
solutions
1,200
12
Selected M&A transactions, April–June 2020
Q2 2020 TRANSACTIONS
Source(s): Pitchbook, Capital IQ, Mergermarket
In Q2 2020, we note a general slowdown in M&A activity as a result of the COVID-19 pandemic. Despite this, well-funded strategics are
still pursuing M&A opportunities, particularly in payments and financial data aggregation sectors
13
Date
Target
Lead
investor(s)
Target description
Capital
raised
($m)
30-Jun-20
API-based Banking-as-a-
Platform
67
26-Jun-20
Health insurance for
businesses and individuals
225
23-Jun-20
Ownership management
and compliance platform
210
22-Jun-20
Online payments solutions
provider
150
16-Jun-20
Internal
Challenger bank
75
03-Jun-20
Challenger bank
241
01-Jun-20
Online investment platform
430
28-May-20
Undisclosed
Card issuance and
processing services
150
28-May-20
Internal
Challenger bank
123
26-May-20
Credit and cash flow
management platform
200
21-May-20
Green financial services for
individuals
135
Date
Target
Lead
investor(s)
Target description
Capital
raised
($m)
19-May-20
Internal
Corporate credit card
solutions
150
05-May-20
Internal
Challenger bank
100
01-May-20
Pet insurance policies
95
29-Apr-20
Personal finance and
investment platform
112
20-Apr-20
Digital health insurance
55
17-Apr-20
Online investment platform
73
16-Apr-20
Payment processing
solutions
850
16-Apr-20
Business banking and
payments solutions
160
16-Apr-20
Online tax assistance
platform
64
15-Apr-20
Identity verification solutions
100
03-Apr-20
Challenger bank
50
Selected fundraisings, April–June 2020
Source(s): Pitchbook, Capital IQ, Mergermarket
Notable number of late-stage fundraisings for fintech leaders
Q2 2020 TRANSACTIONS
In Q2 2020, we broadly note a slowdown in the number of fundraisings, but volume remains robust with established fintechs completing
significant fundraising rounds to bolster balance sheets to stay the course and emerge stronger post the pandemic.
14
Section 3
Public market fintech analyses
15
112.3
48.8
25.5
22.8
12.6
5.9
3.1
3.0
2.9
2.8
0.7
0.2
0.1
92.3
64.5
18.6
23.3
6.4
2.9
8.2
1.7
1.7
1.1
0.1
204.6
113.3
44.1
46.1
19.0
8.8
11.3
4.7
4.6
3.9
0.3
($bn)
Market Cap 31 March 20
Change in Market Cap to 30 June 20
The value of the GP Bullhound’s fintech index increased by ~$220bn in Q2 2020, with payment companies experiencing a significant
bounce back from the lows of Q1 2020.
Strong performance in companies driving digital shift
GP BULLHOUND'S 2020 FINTECH INDEX BY MARKET CAPITALISATION
Source: Capital IQ as at 30 June 2020
Note: Presented on a logarithmic scale
Opening market capitalisation as of 31 March 2020; current market capitalisation as of 30 June 2020
0.3
(0.4)
(0.1)
0.0
Current Market Cap
16
COVID-19 has impacted all subsectors – some more than others – with payments performing especially well through this period
Source: Capital IQ as of 30 June 2020.
Note: EV/Rev multiples except for online lenders, which are computed as Market Cap/Rev multiples. Fintech Index
constituents are PayPal, Shopify, Square, Adyen, Market Axess, Xero, Envestnet, Q2, Blackline, Lending Club, Funding
Circle, Ondeck, and Afterpay
(1) YTD GPB fintech index EV / LTV revenues comparison
Fintech valuations are currently above the 3-year average
GP BULLHOUND FINTECH INDEX VALUATIONS
4x
6x
8x
10x
12x
14x
16x
18x
20x
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
GPB Fintech Index - TEV/LTM Revenues
GPB Fintech Index - TEV/NTM Revenues
Mean: 12.8x
Mean: 10.7x
As of 30 June 2020, the fintech index is trading at 18.4x trailing 12-month revenues, which is 43% above the 3-year average
As of 31 March 2020, the fintech index is trading at 17.6x next 12-month revenues, which is 65% above the 3-year average
Dec 2018: Trade war
with China leads to a
market-wide sell-off
Mar 2020: LTM multiples
were down 22%(1) vs. 3-
year average due to the
effects of COVID-19
17
4x
9x
14x
19x
24x
29x
34x
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
GPB Payments Index - TEV/LTM Revenues
GPB Payments Index - TEV/NTM Revenues
Growing e-commerce volumes and increasing demand for digital payment solutions driving growth of leading payments companies
Source: Capital IQ as of 30 June 2020
Note: Calculated based on TEV/LTM Revenues as at 19 March 2020 and 30 June 2020
Payments players benefit from tailwinds created by COVID-19
GP BULLHOUND FINTECH INDEX VALUATIONS
+89%
% change
in LTM Revenue Multiple
since 19 Mar 2020 (1)
+179%
+88%
+148%
+518%
+211%
increase in payments
index since 19 Mar 2020
18
The trading environment has been difficult, due to the COVID-19 pandemic, with notable volatility in the market throughout Q2 2020.
The snapshot below highlights how certain verticals – especially payments players and financial data & analytics – are trading well
through this period.
60
70
80
90
100
110
120
130
140
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
Source: Capital IQ as of 30 June 2020
Note: Detail on companies included in Appendix
Fintech proving resilient amid COVID-19 pandemic
SHARE PRICE PERFORMANCE – LAST 12 MONTHS
LTM performance
Payments
+30.0%
Nasdaq
+25.6%
Financial Data &
Analytics
+23.9%
Banking Technology
+20.9%
HR & Payroll
+13.1%
Performance
1 Month
3 Months
6 Months
1 Year
Payments
7.5%
46.0%
18.5%
30.0%
Nasdaq
6.0%
29.4%
12.4%
25.6%
Financial Data & Analytics
2.9%
27.8%
14.9%
23.9%
Banking Technology
0.8%
31.7%
12.0%
20.9%
HR & Payroll
6.5%
37.0%
8.5%
13.1%
19
11.3x
31.3x
28.3%
HR &
Payroll
1.8%
Increased focus on performance given volatility
INDICATIVE TRADING VALUATION BENCHMARKS
EV/ 2020E
revenue (1)
EV/2020E
EBITDA (1)
2020E EBITDA
margin (1)
Selected companies
Verticals
2020E revenue
growth (1)
9.2x
23.0x
34.5%
Financial Data &
Analytics
3.6%
13.4x
31.7x
32.1%
Banking
Technology
10.4x
22.9x
34.3%
Payments
26.5%
12.5%
Source: Capital IQ as of 30 June 2020
Note: Only selected logos shown, detail on companies included in Appendix
(1) Mean
Regulators have urged public companies to provide as much information as is practicable regarding their current financial and
operating status, as well as their future operational and financial planning to facilitate robust disclosure and engagement.
20
Section 4
Fintech CEO & founder commentary
21
CEO profile
Moneyfarm at a glance
Moneyfarm is a digital wealth manager with over £1bn in assets under management and 45,000
active customers across the UK, Italy and Germany. First launched in 2011 and headquartered
in London, it simplifies investments and offers advice via its online platform and app, with
diversified portfolios to deliver sustainable growth through a range of asset classes.
Moneyfarm’s approach to investment combines human empathy and financial expertise with
the latest technology to deliver cost-effective advice and investment solutions to each user.
In September 2019, Moneyfarm raised £36m in a Series C funding round, led by Poste Italiane
and Allianz Asset Management.
“We believe in empowering our customers to make confident
investment decisions with their money – it’s a crucial step in
building a more financially secure future for themselves and their
families. Simplicity and quality are at the core of our offering,
allowing us to build a long-term relationship with our customers.
We know it’s important to have the right level of guidance,
knowledge and support, so our hybrid service model blends
technology with access to institutional-level investment advice at
a fraction of the cost.”
Giovanni Daprà
CO-FOUNDER & CEO
22
Co-founder profile
YuLife at a glance
YuLife is the first digital life insurance platform on a mission to inspire life. YuLife transforms old-
fashioned employee benefits into life-enhancing experiences every employee will value and
use. The YuLife app uses behavioural science and game mechanics to reward people for living
well and provides direct access to virtual GP's and mental health support. The result is a highly
engaging proposition that drives lasting healthy habits, as well as actionable HR insights for
businesses.
YuLife was founded in 2016 and is backed by serial investors and top VCs including Creandum,
MMC Ventures, Notion Capital, LocalGlobe and Anthemis Exponential Ventures. The company
is headquartered in London.
“The life insurance industry is ripe for change. For too many years,
life insurance has focused on death, rather than life. YuLife is
pioneering a new type of group life insurance by encouraging
members to live their best lives every single day, using life
insurance as a tool to enhance their physical, mental and
financial wellbeing.
Our members access rewards and bonuses from the UK’s leading
brands in return for completing everyday wellness challenges,
such as walking, cycling, meditation and mindfulness – thus
incentivizing healthy and holistic lifestyles. I believe that businesses
will see how workplaces become healthier, happier and more
productive by replacing transitory perks with benefits that provide
long-term lasting value.”
Jonathan Roomer
CO-FOUNDER
23
CEO profile
Bnext at a glance
Bnext is the #1 mobile bank in the Spanish speaking world with over 400k users, targeting a $9tn
market. The company is a full-service bank offering services such as lending, mortgages,
investing and everyday banking solutions.
Through its marketplace, users have access to a wide range of financial products from other
fintechs and banks. The offering suppliers are meticulously selected in order to best fit the
client's needs.
In September 2019, Bnext raised $25m in a Series A funding round, led by Speedinvest, DN
Capital and Redalpine.
“With our financial marketplace, we have managed to bring
together the best specialist fintechs in each vertical and offer all
these services in an aggregate manner on a single site. This not
only makes it easier for the user but also allows them to choose the
product that's right for them, which gives them confidence that
traditional financial entities have gradually lost.
In addition, we have complemented this offer with a Freemium
Account model, thanks to which we give people the freedom to
bet on the product they like and need the most. And, recently, we
have launched a new loyalty program that allows users to save
with every purchase they make with their card. Therefore, this has
allowed us to offer another savings solution to our users on
purchases they were already making, while we are adding more
brands to the program to make it even easier for them to save
daily.”
Guillermo Vicandi
CO-FOUNDER & CEO
24
Appendix A: Fintech trading comparables
by category
25
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Financial Data & Analytics
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Financial Data & Analytics
S&P Global
79,372
84,420
2.7%
4.9%
7.3%
6.6%
50.2%
52.5%
53.3%
12.6x
12.3x
11.7x
25.1x
23.4x
21.9x
48.4x
32.6x
30.3x
42%
Moody's
51,516
56,849
(1.2%)
8.2%
(2.2%)
11.4%
47.0%
46.5%
47.9%
11.8x
11.9x
11.0x
25.0x
25.6x
23.0x
44.1x
32.8x
29.4x
39%
Thomson Reuters
33,618
36,592
1.1%
4.1%
70.8%
7.3%
18.5%
31.3%
32.2%
6.2x
6.1x
5.9x
33.4x
19.6x
18.3x
n.m
38.3x
34.7x
9%
Experian
31,674
35,901
0.0%
7.1%
1.6%
7.1%
33.8%
34.4%
34.4%
7.2x
7.2x
6.7x
21.2x
20.9x
19.5x
34.9x
35.7x
31.7x
17%
IHS Markit
29,959
35,542
(2.8%)
7.3%
18.2%
9.8%
35.1%
42.7%
43.6%
8.1x
8.3x
7.7x
22.9x
19.4x
17.7x
66.8x
27.5x
24.1x
17%
Verisk Analytics
27,617
30,743
6.4%
6.0%
23.6%
7.7%
40.5%
47.0%
47.7%
11.8x
11.1x
10.5x
29.2x
23.6x
21.9x
63.2x
35.8x
32.3x
15%
MSCI
27,906
30,192
6.8%
8.9%
12.2%
10.2%
52.7%
55.4%
56.0%
19.4x
18.2x
16.7x
36.8x
32.8x
29.8x
72.9x
47.6x
42.4x
39%
Equifax
20,864
24,045
4.1%
4.4%
47.6%
9.1%
23.0%
32.6%
34.1%
6.9x
6.6x
6.3x
29.8x
20.2x
18.5x
89.7x
33.2x
29.9x
27%
TransUnion
16,520
20,115
(3.4%)
8.0%
(3.3%)
15.4%
36.5%
36.6%
39.1%
7.6x
7.8x
7.3x
20.7x
21.4x
18.6x
58.5x
34.8x
28.8x
18%
FICO
12,125
13,069
2.1%
4.1%
38.2%
6.6%
24.2%
32.7%
33.5%
10.9x
10.7x
10.3x
45.2x
32.7x
30.7x
87.9x
51.5x
46.7x
32%
Black Knight
11,276
12,895
0.0%
6.8%
45.8%
10.4%
33.7%
49.2%
50.8%
11.0x
10.9x
10.3x
32.5x
22.3x
20.2x
105.7x
37.5x
32.8x
20%
FactSet
12,440
12,839
3.6%
4.1%
4.2%
4.3%
35.3%
35.4%
35.5%
8.9x
8.5x
8.2x
25.1x
24.1x
23.1x
46.1x
31.0x
30.0x
15%
CoreLogic
5,338
7,004
(1.7%)
(0.7%)
42.3%
(1.6%)
21.0%
30.4%
30.1%
4.0x
4.0x
4.1x
18.9x
13.3x
13.5x
55.0x
22.2x
22.8x
59%
Morningstar
6,033
6,386
n.a.
n.a.
n.a.
n.a.
20.9%
n.a.
n.a.
5.4x
n.a.
n.a.
25.9x
n.a.
n.a.
54.4x
n.a
n.a
(3%)
Envestnet
3,935
4,562
5.9%
10.3%
137.3%
15.5%
9.5%
21.4%
22.4%
5.1x
4.8x
4.3x
53.1x
22.4x
19.4x
n.m
35.6x
30.8x
8%
BlackLine
4,675
4,472
17.8%
19.2%
n.a.
51.7%
(4.0%)
10.9%
13.9%
15.5x
13.1x
11.0x
n.m.
n.m.
79.4x
n.m
n.m
n.m
56%
LiveRamp
2,786
2,089
15.5%
20.8%
n.a.
n.a.
(51.9%)
(6.6%)
3.5%
5.9x
5.1x
4.2x
n.m.
n.m.
n.m.
n.m
n.m
n.m
(10%)
Mean
3.6%
7.7%
31.7%
11.4%
25.1%
34.5%
36.1%
9.3x
9.2x
8.5x
29.7x
23.0x
25.0x
63.7x
35.4x
31.9x
25.5%
Median
2.4%
7.0%
20.9%
9.1%
33.7%
34.9%
34.9%
8.1x
8.4x
8.0x
25.9x
22.3x
20.2x
58.5x
35.2x
30.5x
19.0%
26
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Banking Technology
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Banking Technology
MarketAxess
18,990
18,694
28.0%
8.3%
41.5%
4.5%
53.9%
59.6%
57.4%
36.6x
28.6x
26.4x
68.0x
48.1x
46.0x
115.1x
70.6x
66.7x
55%
Jack Henry
14,100
14,113
6.7%
7.3%
22.9%
3.3%
27.7%
31.9%
30.7%
8.7x
8.1x
7.6x
31.3x
25.4x
24.6x
61.6x
47.2x
43.0x
35%
Temenos
11,187
12,209
(1.9%)
12.7%
53.4%
11.4%
27.7%
43.4%
42.9%
12.6x
12.8x
11.4x
45.3x
29.5x
26.5x
80.8x
43.8x
39.4x
(16%)
Q2
4,565
4,925
25.4%
23.6%
n.a.
95.8%
(10.4%)
4.4%
7.0%
15.6x
12.5x
10.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
12%
Bottomline Technologies
2,230
2,259
4.3%
11.1%
150.9%
19.6%
8.8%
21.1%
22.7%
5.2x
5.0x
4.5x
59.8x
23.9x
19.9x
n.m
45.1x
33.5x
16%
Mean
12.5%
12.6%
67.1%
26.9%
21.5%
32.1%
32.1%
15.7x
13.4x
12.0x
51.1x
31.7x
29.3x
85.8x
51.7x
45.7x
20.2%
Median
6.7%
11.1%
47.4%
11.4%
27.7%
31.9%
30.7%
12.6x
12.5x
10.1x
52.6x
27.5x
25.6x
80.8x
46.2x
41.2x
15.5%
27
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Payments
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Payments
High Growth Omnichannel Payments
PayPal
204,574
203,129
13.7%
17.2%
58.8%
23.1%
19.2%
26.8%
28.1%
11.4x
10.1x
8.6x
59.7x
37.6x
30.5x
112.4x
52.1x
42.2x
51%
Shopify
113,303
111,083
37.5%
35.4%
n.a.
94.2%
(7.2%)
2.6%
3.8%
n.m.
n.m.
37.8x
n.m.
n.m.
n.m.
n.m
n.m
n.m
212%
FIS
82,845
102,039
19.9%
9.1%
54.4%
16.3%
32.9%
42.4%
45.2%
9.9x
8.2x
7.6x
30.0x
19.4x
16.7x
78.3x
24.6x
20.0x
8%
Fiserv
65,355
88,130
45.7%
6.4%
57.3%
12.0%
34.7%
37.5%
39.4%
8.7x
5.9x
5.6x
24.9x
15.8x
14.1x
55.1x
22.2x
18.3x
6%
Square
46,106
45,770
11.0%
24.7%
120.6%
187.3%
1.8%
3.5%
8.1%
9.7x
8.7x
7.0x
n.m.
n.m.
86.8x
n.m
n.m
111.7x
43%
Adyen
44,078
42,169
67.4%
42.5%
31.5%
49.6%
71.3%
56.0%
58.8%
n.m.
n.m.
42.2x
n.m.
n.m.
71.8x
n.m
n.m
103.5x
95%
Afterpay
11,287
11,296
97.0%
54.7%
n.a.
144.3%
(7.9%)
7.7%
12.1%
n.m.
26.5x
17.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
150%
StoneCo
10,739
11,212
176.3%
33.3%
n.m.
46.4%
7.9%
55.7%
61.1%
n.m.
19.6x
14.7x
n.m.
35.2x
24.1x
63.5x
70.5x
42.6x
34%
Pageseguro
11,584
10,904
87.7%
24.7%
n.a.
36.1%
(2.2%)
35.8%
39.0%
16.4x
8.7x
7.0x
n.m.
24.4x
17.9x
39.0x
41.6x
31.0x
(8%)
Mean
61.8%
27.6%
64.5%
67.7%
16.7%
29.8%
32.9%
11.2x
12.5x
16.4x
38.2x
26.5x
37.4x
69.7x
42.2x
52.8x
66%
Median
45.7%
24.7%
57.3%
46.4%
7.9%
35.8%
39.0%
9.9x
8.7x
8.6x
30.0x
24.4x
24.1x
63.5x
41.6x
42.2x
43%
General Payments & Services
Global Payments
50,734
59,305
34.2%
12.7%
55.4%
20.2%
39.2%
45.4%
48.4%
12.1x
9.0x
8.0x
30.8x
19.8x
16.5x
74.2x
27.5x
21.7x
4%
Worldline
15,868
16,816
(1.5%)
9.7%
18.7%
17.6%
20.6%
24.8%
26.6%
6.3x
6.4x
5.8x
30.5x
25.7x
21.8x
59.8x
46.9x
37.9x
21%
Nexi
10,880
13,760
(37.2%)
9.5%
51.4%
15.4%
22.7%
54.7%
57.6%
7.5x
11.9x
10.8x
32.9x
21.7x
18.8x
n.m
39.5x
33.4x
69%
Ingenico
9,971
11,943
(18.3%)
17.3%
10.3%
12.4%
15.6%
21.1%
20.2%
3.2x
3.9x
3.3x
20.2x
18.3x
16.3x
46.2x
31.8x
27.4x
83%
ACI Worldwide
3,129
4,442
10.0%
7.5%
70.2%
18.0%
16.0%
24.8%
27.3%
3.5x
3.2x
3.0x
22.0x
12.9x
10.9x
53.1x
21.5x
15.5x
(22%)
Cielo
2,284
4,106
0.7%
5.9%
(27.3%)
18.1%
25.5%
18.4%
20.5%
1.9x
1.9x
1.8x
7.6x
10.4x
8.8x
6.4x
17.0x
12.1x
(31%)
Network International
2,730
3,053
(15.2%)
20.7%
(20.7%)
35.3%
43.9%
41.1%
46.0%
9.1x
10.8x
8.9x
20.8x
26.2x
19.4x
40.4x
52.7x
30.7x
(25%)
EVO Payments
944
1,835
(12.5%)
16.2%
7.3%
24.5%
25.0%
30.7%
32.8%
3.8x
4.3x
3.7x
15.1x
14.1x
11.3x
77.1x
53.4x
33.8x
(23%)
Mean
(5.0%)
12.4%
20.7%
20.2%
26.1%
32.6%
34.9%
5.9x
6.4x
5.7x
22.5x
18.6x
15.5x
51.0x
36.3x
26.6x
9%
Median
(7.0%)
11.2%
14.5%
18.1%
23.8%
27.7%
30.1%
5.0x
5.3x
4.8x
21.4x
19.1x
16.4x
53.1x
35.7x
29.0x
(9%)
Payment Networks
Visa
411,263
423,053
(6.9%)
15.3%
(8.6%)
19.0%
68.2%
67.0%
69.2%
18.0x
19.3x
16.8x
26.4x
28.8x
24.2x
43.4x
38.9x
31.4x
11%
Mastercard
296,806
298,688
(6.3%)
19.5%
(12.4%)
29.3%
60.4%
56.4%
61.1%
17.7x
18.9x
15.8x
29.3x
33.5x
25.9x
50.3x
44.2x
33.6x
11%
Mean
(6.6%)
17.4%
(10.5%)
24.2%
64.3%
61.7%
65.1%
17.8x
19.1x
16.3x
27.8x
31.2x
25.1x
46.85
41.5x
32.5x
11.0%
Median
(6.6%)
17.4%
(10.5%)
24.2%
64.3%
61.7%
65.1%
17.8x
19.1x
16.3x
27.8x
31.2x
25.1x
46.85
41.5x
32.5x
11.0%
Mean (ALL)
26.5%
20.1%
31.1%
43.1%
25.7%
34.3%
37.1%
9.3x
10.4x
11.9x
26.9x
22.9x
25.6x
57.1x
39.0x
38.1x
36%
Median (ALL)
11.0%
17.2%
31.5%
23.1%
22.7%
35.8%
39.0%
9.1x
8.7x
8.0x
26.4x
21.7x
18.8x
54.1x
39.5x
31.4x
11%
28
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – HR & Payroll
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
HR & Payroll
Intuit
77,238
73,930
5.6%
10.7%
27.8%
14.5%
29.7%
35.9%
37.1%
10.4x
9.8x
8.9x
34.9x
27.3x
23.9x
62.9x
41.6x
35.8x
12%
ADP
63,989
64,745
2.8%
5.0%
(6.4%)
10.1%
26.2%
23.9%
25.0%
4.6x
4.5x
4.3x
17.7x
18.9x
17.2x
32.4x
27.5x
23.9x
(11%)
Workday
44,061
43,562
15.6%
16.6%
n.a.
18.1%
(6.2%)
23.1%
23.4%
12.0x
10.4x
8.9x
n.m.
44.9x
38.0x
n.m
83.0x
68.4x
(12%)
Paychex
27,173
27,309
(1.0%)
3.0%
(5.4%)
3.0%
42.0%
40.1%
40.1%
6.9x
7.0x
6.8x
16.5x
17.4x
16.9x
30.6x
26.9x
25.7x
(9%)
SS&C
14,473
21,737
(0.8%)
3.4%
4.8%
6.0%
36.4%
38.4%
39.4%
4.7x
4.7x
4.6x
12.9x
12.3x
11.6x
43.8x
14.5x
13.4x
(4%)
Coupa Software
18,582
18,594
26.2%
25.5%
n.a.
48.7%
(11.5%)
14.9%
17.7%
47.7x
37.8x
30.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
112%
Paycom
17,789
17,661
11.8%
21.0%
33.5%
26.4%
33.8%
40.4%
42.2%
23.9x
21.4x
17.7x
70.8x
53.0x
42.0x
126.2x
86.7x
67.9x
36%
The Sage Group
9,072
9,366
(4.5%)
(3.3%)
(13.0%)
0.4%
27.5%
25.1%
26.1%
3.9x
4.0x
4.2x
14.0x
16.1x
16.1x
23.6x
26.9x
25.5x
(17%)
Xero
8,817
8,791
20.1%
23.9%
265.6%
42.6%
6.8%
20.8%
23.9%
20.5x
17.1x
13.8x
n.m.
82.0x
57.5x
n.m
n.m
n.m
47%
Paylocity
7,832
7,735
17.1%
16.9%
92.1%
24.8%
15.3%
25.1%
26.8%
15.5x
13.3x
11.4x
n.m.
52.9x
42.4x
n.m
98.1x
79.0x
50%
TriNet
4,101
4,197
(75.0%)
(3.9%)
26.3%
(3.7%)
7.7%
38.9%
38.9%
1.1x
4.4x
4.5x
14.2x
11.2x
11.7x
25.3x
18.0x
18.0x
(11%)
Blucora
546
850
3.5%
9.3%
(16.9%)
41.9%
16.4%
13.1%
17.1%
1.2x
1.1x
1.0x
7.2x
8.7x
6.1x
15.6x
10.3x
6.2x
(62%)
Mean
1.8%
10.7%
40.8%
19.4%
18.7%
28.3%
29.8%
12.7x
11.3x
9.7x
23.5x
31.3x
25.8x
45.0x
43.3x
36.4x
10.9%
Median
4.6%
10.0%
15.5%
16.3%
21.3%
25.1%
26.4%
8.6x
8.4x
7.8x
15.3x
18.9x
17.2x
31.5x
27.2x
25.6x
(6.5%)
29
Appendix B: GP Bullhound fintech
credentials & team
30
Experience across key fintech verticals
DEEP FINTECH EXPERIENCE
ACQUIRED BY
IPO
€343m
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
Payments
Financial Services Software / Digital Banking
Lending
31
Authors
Alexis Majos
ANALYST
Alexis.Majos@gpbullhound.com
Adam Page
VICE PRESIDENT
Adam.Page@gpbullhound.com
Claudio Alvarez
PARTNER
Claudio.Alvarez@gpbullhound.com
32
Section 8
Appendix C: GP Bullhound corporate overview
33
We partner with global tech
leaders to build the future
34
GP BULLHOUND
FUND III
GP BULLHOUND
FUND IV
GP BULLHOUND
FUND V
GP BULLHOUND
FUND IV
GP BULLHOUND
FUND IV
A leading technology advisory and investment firm
ABOUT GP BULLHOUND
(1) League table data represents selected transaction advisors. Time period is 2016-Q4 2019. Global M&A transactions
between $10m and $300m
ESSENCE
BALTIC CLASSIFIEDS
GROUP
FALCON.IO
JELLYFISH
SPOTIFY
SLACK
REVOLUT
GLOVO
INNOGAMES
DELIVERY HERO
SIGNAVIO
PRODIGY FINANCE
TECHNOLOGY
PREDICTIONS
TITANS
OF TECH
SUMMIT
MARBELLA
INVESTOR
ALLSTARS
Mergers & Acquisitions
Investments
Capital Transactions
Insights & Events
We are the no. 1 global advisor (1) to leading technology
companies in competitive international sale and acquisition
processes.
The firm has completed 420 successful M&A transactions to date,
worldwide, with a total value of over $18bn.
Through our investment team, we provide investors with access to
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2
We publish this quarterly fintech market report to provide quantitative insights into public and private market valuations across the transaction
spectrum and qualitative insights into company business models, technology and customer trends.
In our Q2 report, we discuss certain trends that highlight some of the COVID tailwinds, such as digital payments and online trading, while also
bringing back to focus insurtech. Additionally, we cover the re-imagining of the finance function through software, as well as feature
CEO/Founder profiles from companies in the wealth management, insurtech and challenger banking spaces.
Based in our London office, Claudio Alvarez heads up our fintech practice, which has completed over 20 transactions involving both equity
and debt. Several of our recent fintech advisory transactions and investments are showcased below:
GP Bullhound is a leading technology advisory and investment firm, providing transaction advice and
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Fintech perspectives
EXECUTIVE SUMMARY
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3
Key sector takeaways
Recent fintech transaction trends
Public market fintech analyses
Fintech CEO & founder commentary
Appendix A: Fintech trading comparables by category
Appendix B: GP Bullhound fintech credentials & team
1
3
4
5
6
Contents
2
Appendix C: GP Bullhound corporate overview
7
4
Section 1
Key sector takeaways
5
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Digital payments: cash is no longer king
1
2
3
Insurtech: a disrupter and an enabler
Market volatility creates a strong tailwind for trading platforms
4
The CFO's tech stack: how fintech is reinventing the role of the finance function
6
GP Bullhound’s views on current trends in fintech
KEY TRENDS
1
Digital payments: cash is no longer king
Source: Capital IQ, MergerMarket, Pitchbook
(1) As of 30 June 2020
▪ The global payments ecosystem has proven resilient in the face of the
pandemic as many of the sector’s biggest players are spread across
multiple verticals, providing them with something of a hedge.
▪ However, for payments companies targeting the verticals hardest hit by the
lockdowns and social distancing restrictions, such as travel (airlines, OTAs,
and accommodation), restaurants, in-store retail, events and
entertainment, COVID-19 has created immediate challenges. In the short-
term, this is likely to force companies to make changes to their operating
models as total payment volumes shrink and they experience greater
demand on customer service teams.
▪ We expect the pandemic to represent a turning point for the payments
industry, as companies that have heavily invested in digital and mobile
technologies thrive, driven by a positive impact on volumes as e-commerce
penetration explodes with the shift from offline to online commerce
accelerated by 5–10 years. In Europe, shares in Adyen have jumped by
95%(1) in last 12 months, whilst in the US, Shopify has risen by 212% (1).
▪ Long-term, this step change in consumer behaviour should drive digital
innovation, forcing many traditional players to fast-track innovation efforts
and most likely lead to further consolidation in the sector.
JUN-20
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APR-20
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MAY-20
PRIVATE PLACEMENT
£19M
7
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ, MergerMarket, Pitchbook
(1) As of 02 July 2020
(2) Forbes, “Fintech Insurer Lemonade Valued At More Than $2 Billion After $300 Million Funding Deal”, April 2019
2
Insurtech: a disrupter and an enabler
▪
In the near-term, we expect the economic slowdown and rise in
unemployment to put the brakes on insurer growth with downward
pressure on premiums driven by fewer policy-buyers.
▪
In a flat market, for insurers to maintain the growth momentum in recent
years, they must continue to focus on improving operational efficiency by
investing in new technology to digitalise key value chain operations and
improve customer experience as distribution continues to trend towards
direct and digital.
▪ Long-term, we believe COVID-19 will accelerate opportunities for many
start-ups as traditional players look to B2B insurtech startups to help
transform their digital capabilities and improve insurer’s competitive
positioning and bottom line.
▪ Full-stack Insurtech innovation and digital adoption curve is often viewed
to be behind that of the broader fintech sector due to the capital-
intensive nature of operations. In recent months, we note a flurry of
fundraisings with start-ups gaining traction with investors as they are now
able to prove their unit economics at scale.
▪ This quarter, Lemonade, the full stack Israeli-based start-up backed by
SoftBank, which is harnessing technology to provide homeowners and
renters insurance, filed to go public and more than doubled its valuation
on the first morning of trading. The valuation of $3.8bn (1) is well beyond the
$2bn valuation Series D fundraise in April 2019 (2).
JUL-20
IPO
APR-20
PRIVATE PLACEMENT
$50M
APR-20
PRIVATE PLACEMENT
$55M
MAY-20
PRIVATE PLACEMENT
$95M
8
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ; MergerMarket; Pitchbook
(1) City AM, “Robinhood delays UK launch amid pandemic popularity”, June 2020
3
Market volatility creates a strong tailwind for trading platforms
▪ The coronavirus pandemic and resulting stock market volatility has proved
fruitful for trading platforms such as Robinhood, which added a record 3m
new customers in Q1 2020 alone and generated $60m in revenue in March
— three times that of the month before.(1) This strong performance in Q1
2020 was in part what allowed Robinhood to raise its $280m Series F at a
valuation of $8.3bn.(1)
▪
In Europe, other platforms like Interactive Investor, Freetrade, BUX and
Trade Republic, which raised €62m in April this year and plans on
expanding into the banking field, intend to build up a European platform
for mobile saving, investing and trading.
▪ Although zero-commission trading has been a US phenomenon for longer,
we believe platforms in Europe will continue to adopt this model to gain
users and volume. However, we see the inability of the UK players to sell
their order flow (as Robinhood does in the US) as a major limiting factor in
the business model. Time will tell how sustainable the commission-free
model is in Europe without having a much broader consumer proposition,
which could be why Trade Republic may want to broaden its market
proposition and challenger banks such as Revolut may be in a better
position to offer trading as a bundled service.
APR-20
PRIVATE PLACEMENT
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JUN-20
ACQUISITION
UNDISCLOSED
MAY-20
CROWDFUNDING
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MAY-20
PRIVATE PLACEMENT
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9
GP Bullhound’s views on current trends in fintech
KEY TRENDS
Source: Capital IQ, MergerMarket, Pitchbook
4
The CFO's tech stack: how fintech is reinventing the role of the finance function
▪ The difficult trading environment caused by the COVID-19 pandemic has
put pressure on companies to make important strategic decisions on how
to cut costs, manage cash flows and plan resources to keep their
companies afloat. The CFO role has continued to evolve in recent years,
as they are now considered key strategic decision makers alongside CEOs,
and increasing time is spent analysing the vast array of data a business
generates to provide a basis of analysis for the CEO to make these critical
decisions.
▪
In the past decade, we have seen the first wave of fintech platforms
targeting consumers, many of which are now household names. Recently,
we note strong momentum in the B2B market and more specifically in the
‘CFO tooling’ space. We believe these solutions are a catalyst for a
transformative change across all finance functions.
▪ We identify five segments where fintech is playing a big role in the
corporate world: accounting, loans and invoice finance, expense
management, resource planning, and corporate banking. A lot of market
parameters are set to keep these segments growing, such as the use of
open banking data in credit decisions or the high rate of adoption of
cloud platforms.
▪ Fundraising activity this quarter demonstrates the traction that this segment
of fintech is getting. Fundbox, the US-based start-up for a credit and cash
flow management platform, raised $200m, while Brex, which offers a
corporate credit card with an expense management platform, raised
$150m, led by DST and Lone Pine Capital.
JUN-20
PRIVATE PLACEMENT
$210M
MAY-20
PRIVATE PLACEMENT
$150M
MAY-20
PRIVATE PLACEMENT
$200M
JUN-20
PRIVATE PLACEMENT
$50M
10
Section 2
Recent fintech transaction trends
11
0
400
800
1,200
1,600
2,000
0
10
20
30
40
50
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Total capital invested (LHS)
Volume (RHS)
0
50
100
150
200
250
300
350
400
0
20
40
60
80
100
120
140
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Value (LHS)
Volume (RHS)
0%
20%
40%
60%
80%
100%
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Americas
Europe
Asia
Other
M&A deal value by region
Fundraising deal value by region
$bn, number of deals
$bn, number of deals
0%
20%
40%
60%
80%
100%
Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Americas
Europe
Asia
Other
Activity levels remain steady despite COVID-19 pandemic
M&A AND FUNDRAISING ACTIVITY BY QUARTER
Transaction M&A deal value and volume
Fundraising deal value and volume
Source: Pitchbook as of 30 June 2020
Note: Data includes all ‘fintech’ M&A & fundraising deals and IPOs as defined by Pitchbook regardless of geography or transaction size
(1) Spike in the M&A value in Q3 2019 was caused by four extraordinarily large transactions with an aggregate value of $94bn (Worldpay/FIS ($35.5bn), First Data/Fiserv ($22bn), Total
System Services/Global Payments ($21.5bn), Refinitiv/LSE ($14.8bn)) (2) Spike in fundraises value in Q2 2018 was caused by an extraordinarily large investment in Ant Financial ($14bn)
(1)(2)With the easing of lockdown restrictions and acceleration of digital adoption as a result of the enforced lockdowns, we believe the
fintech landscape is ripe for further consolidation and investment in new innovations in the coming quarters.
12
Slowdown in M&A, but significant transactions still completing
Deal date
Target
Buyer
Target description
EV ($m)
Implied EV/LTM Rev
30-Jun-20
Administrative and financial management platform for
freelance workers
-
-
29-Jun-20
Personal wealth management and financial planning
platform
1,000
8.3x
23-Jun-20
Cloud-based real-time financial data aggregation and
insight platform
985
-
02-Jun-20
Interest free ‘buy now pay later’ payment solutions
269
-
28-May-20
Payment fraud detection and prevention for e-
commerce players
156
-
18-May-20
Financial technology software for the wealth
management industry
120
-
12-May-20
Online financial marketplace to invest in the venture
asset class through mutual funds
160
-
08-May-20
Investment platform for thematic investing
-
-
29-Apr-20
Tech-enabled solutions and services for the back and
middle office administration
116
-
20-Apr-20
POS application enabling and simplifying business
payments
130
-
14-Apr-20
Digital transactions management solutions
160
3.0x
07-Apr-20
Payment processing platform with AI fraud detection
solutions
1,200
12
Selected M&A transactions, April–June 2020
Q2 2020 TRANSACTIONS
Source(s): Pitchbook, Capital IQ, Mergermarket
In Q2 2020, we note a general slowdown in M&A activity as a result of the COVID-19 pandemic. Despite this, well-funded strategics are
still pursuing M&A opportunities, particularly in payments and financial data aggregation sectors
13
Date
Target
Lead
investor(s)
Target description
Capital
raised
($m)
30-Jun-20
API-based Banking-as-a-
Platform
67
26-Jun-20
Health insurance for
businesses and individuals
225
23-Jun-20
Ownership management
and compliance platform
210
22-Jun-20
Online payments solutions
provider
150
16-Jun-20
Internal
Challenger bank
75
03-Jun-20
Challenger bank
241
01-Jun-20
Online investment platform
430
28-May-20
Undisclosed
Card issuance and
processing services
150
28-May-20
Internal
Challenger bank
123
26-May-20
Credit and cash flow
management platform
200
21-May-20
Green financial services for
individuals
135
Date
Target
Lead
investor(s)
Target description
Capital
raised
($m)
19-May-20
Internal
Corporate credit card
solutions
150
05-May-20
Internal
Challenger bank
100
01-May-20
Pet insurance policies
95
29-Apr-20
Personal finance and
investment platform
112
20-Apr-20
Digital health insurance
55
17-Apr-20
Online investment platform
73
16-Apr-20
Payment processing
solutions
850
16-Apr-20
Business banking and
payments solutions
160
16-Apr-20
Online tax assistance
platform
64
15-Apr-20
Identity verification solutions
100
03-Apr-20
Challenger bank
50
Selected fundraisings, April–June 2020
Source(s): Pitchbook, Capital IQ, Mergermarket
Notable number of late-stage fundraisings for fintech leaders
Q2 2020 TRANSACTIONS
In Q2 2020, we broadly note a slowdown in the number of fundraisings, but volume remains robust with established fintechs completing
significant fundraising rounds to bolster balance sheets to stay the course and emerge stronger post the pandemic.
14
Section 3
Public market fintech analyses
15
112.3
48.8
25.5
22.8
12.6
5.9
3.1
3.0
2.9
2.8
0.7
0.2
0.1
92.3
64.5
18.6
23.3
6.4
2.9
8.2
1.7
1.7
1.1
0.1
204.6
113.3
44.1
46.1
19.0
8.8
11.3
4.7
4.6
3.9
0.3
($bn)
Market Cap 31 March 20
Change in Market Cap to 30 June 20
The value of the GP Bullhound’s fintech index increased by ~$220bn in Q2 2020, with payment companies experiencing a significant
bounce back from the lows of Q1 2020.
Strong performance in companies driving digital shift
GP BULLHOUND'S 2020 FINTECH INDEX BY MARKET CAPITALISATION
Source: Capital IQ as at 30 June 2020
Note: Presented on a logarithmic scale
Opening market capitalisation as of 31 March 2020; current market capitalisation as of 30 June 2020
0.3
(0.4)
(0.1)
0.0
Current Market Cap
16
COVID-19 has impacted all subsectors – some more than others – with payments performing especially well through this period
Source: Capital IQ as of 30 June 2020.
Note: EV/Rev multiples except for online lenders, which are computed as Market Cap/Rev multiples. Fintech Index
constituents are PayPal, Shopify, Square, Adyen, Market Axess, Xero, Envestnet, Q2, Blackline, Lending Club, Funding
Circle, Ondeck, and Afterpay
(1) YTD GPB fintech index EV / LTV revenues comparison
Fintech valuations are currently above the 3-year average
GP BULLHOUND FINTECH INDEX VALUATIONS
4x
6x
8x
10x
12x
14x
16x
18x
20x
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
GPB Fintech Index - TEV/LTM Revenues
GPB Fintech Index - TEV/NTM Revenues
Mean: 12.8x
Mean: 10.7x
As of 30 June 2020, the fintech index is trading at 18.4x trailing 12-month revenues, which is 43% above the 3-year average
As of 31 March 2020, the fintech index is trading at 17.6x next 12-month revenues, which is 65% above the 3-year average
Dec 2018: Trade war
with China leads to a
market-wide sell-off
Mar 2020: LTM multiples
were down 22%(1) vs. 3-
year average due to the
effects of COVID-19
17
4x
9x
14x
19x
24x
29x
34x
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
GPB Payments Index - TEV/LTM Revenues
GPB Payments Index - TEV/NTM Revenues
Growing e-commerce volumes and increasing demand for digital payment solutions driving growth of leading payments companies
Source: Capital IQ as of 30 June 2020
Note: Calculated based on TEV/LTM Revenues as at 19 March 2020 and 30 June 2020
Payments players benefit from tailwinds created by COVID-19
GP BULLHOUND FINTECH INDEX VALUATIONS
+89%
% change
in LTM Revenue Multiple
since 19 Mar 2020 (1)
+179%
+88%
+148%
+518%
+211%
increase in payments
index since 19 Mar 2020
18
The trading environment has been difficult, due to the COVID-19 pandemic, with notable volatility in the market throughout Q2 2020.
The snapshot below highlights how certain verticals – especially payments players and financial data & analytics – are trading well
through this period.
60
70
80
90
100
110
120
130
140
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
Source: Capital IQ as of 30 June 2020
Note: Detail on companies included in Appendix
Fintech proving resilient amid COVID-19 pandemic
SHARE PRICE PERFORMANCE – LAST 12 MONTHS
LTM performance
Payments
+30.0%
Nasdaq
+25.6%
Financial Data &
Analytics
+23.9%
Banking Technology
+20.9%
HR & Payroll
+13.1%
Performance
1 Month
3 Months
6 Months
1 Year
Payments
7.5%
46.0%
18.5%
30.0%
Nasdaq
6.0%
29.4%
12.4%
25.6%
Financial Data & Analytics
2.9%
27.8%
14.9%
23.9%
Banking Technology
0.8%
31.7%
12.0%
20.9%
HR & Payroll
6.5%
37.0%
8.5%
13.1%
19
11.3x
31.3x
28.3%
HR &
Payroll
1.8%
Increased focus on performance given volatility
INDICATIVE TRADING VALUATION BENCHMARKS
EV/ 2020E
revenue (1)
EV/2020E
EBITDA (1)
2020E EBITDA
margin (1)
Selected companies
Verticals
2020E revenue
growth (1)
9.2x
23.0x
34.5%
Financial Data &
Analytics
3.6%
13.4x
31.7x
32.1%
Banking
Technology
10.4x
22.9x
34.3%
Payments
26.5%
12.5%
Source: Capital IQ as of 30 June 2020
Note: Only selected logos shown, detail on companies included in Appendix
(1) Mean
Regulators have urged public companies to provide as much information as is practicable regarding their current financial and
operating status, as well as their future operational and financial planning to facilitate robust disclosure and engagement.
20
Section 4
Fintech CEO & founder commentary
21
CEO profile
Moneyfarm at a glance
Moneyfarm is a digital wealth manager with over £1bn in assets under management and 45,000
active customers across the UK, Italy and Germany. First launched in 2011 and headquartered
in London, it simplifies investments and offers advice via its online platform and app, with
diversified portfolios to deliver sustainable growth through a range of asset classes.
Moneyfarm’s approach to investment combines human empathy and financial expertise with
the latest technology to deliver cost-effective advice and investment solutions to each user.
In September 2019, Moneyfarm raised £36m in a Series C funding round, led by Poste Italiane
and Allianz Asset Management.
“We believe in empowering our customers to make confident
investment decisions with their money – it’s a crucial step in
building a more financially secure future for themselves and their
families. Simplicity and quality are at the core of our offering,
allowing us to build a long-term relationship with our customers.
We know it’s important to have the right level of guidance,
knowledge and support, so our hybrid service model blends
technology with access to institutional-level investment advice at
a fraction of the cost.”
Giovanni Daprà
CO-FOUNDER & CEO
22
Co-founder profile
YuLife at a glance
YuLife is the first digital life insurance platform on a mission to inspire life. YuLife transforms old-
fashioned employee benefits into life-enhancing experiences every employee will value and
use. The YuLife app uses behavioural science and game mechanics to reward people for living
well and provides direct access to virtual GP's and mental health support. The result is a highly
engaging proposition that drives lasting healthy habits, as well as actionable HR insights for
businesses.
YuLife was founded in 2016 and is backed by serial investors and top VCs including Creandum,
MMC Ventures, Notion Capital, LocalGlobe and Anthemis Exponential Ventures. The company
is headquartered in London.
“The life insurance industry is ripe for change. For too many years,
life insurance has focused on death, rather than life. YuLife is
pioneering a new type of group life insurance by encouraging
members to live their best lives every single day, using life
insurance as a tool to enhance their physical, mental and
financial wellbeing.
Our members access rewards and bonuses from the UK’s leading
brands in return for completing everyday wellness challenges,
such as walking, cycling, meditation and mindfulness – thus
incentivizing healthy and holistic lifestyles. I believe that businesses
will see how workplaces become healthier, happier and more
productive by replacing transitory perks with benefits that provide
long-term lasting value.”
Jonathan Roomer
CO-FOUNDER
23
CEO profile
Bnext at a glance
Bnext is the #1 mobile bank in the Spanish speaking world with over 400k users, targeting a $9tn
market. The company is a full-service bank offering services such as lending, mortgages,
investing and everyday banking solutions.
Through its marketplace, users have access to a wide range of financial products from other
fintechs and banks. The offering suppliers are meticulously selected in order to best fit the
client's needs.
In September 2019, Bnext raised $25m in a Series A funding round, led by Speedinvest, DN
Capital and Redalpine.
“With our financial marketplace, we have managed to bring
together the best specialist fintechs in each vertical and offer all
these services in an aggregate manner on a single site. This not
only makes it easier for the user but also allows them to choose the
product that's right for them, which gives them confidence that
traditional financial entities have gradually lost.
In addition, we have complemented this offer with a Freemium
Account model, thanks to which we give people the freedom to
bet on the product they like and need the most. And, recently, we
have launched a new loyalty program that allows users to save
with every purchase they make with their card. Therefore, this has
allowed us to offer another savings solution to our users on
purchases they were already making, while we are adding more
brands to the program to make it even easier for them to save
daily.”
Guillermo Vicandi
CO-FOUNDER & CEO
24
Appendix A: Fintech trading comparables
by category
25
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Financial Data & Analytics
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Financial Data & Analytics
S&P Global
79,372
84,420
2.7%
4.9%
7.3%
6.6%
50.2%
52.5%
53.3%
12.6x
12.3x
11.7x
25.1x
23.4x
21.9x
48.4x
32.6x
30.3x
42%
Moody's
51,516
56,849
(1.2%)
8.2%
(2.2%)
11.4%
47.0%
46.5%
47.9%
11.8x
11.9x
11.0x
25.0x
25.6x
23.0x
44.1x
32.8x
29.4x
39%
Thomson Reuters
33,618
36,592
1.1%
4.1%
70.8%
7.3%
18.5%
31.3%
32.2%
6.2x
6.1x
5.9x
33.4x
19.6x
18.3x
n.m
38.3x
34.7x
9%
Experian
31,674
35,901
0.0%
7.1%
1.6%
7.1%
33.8%
34.4%
34.4%
7.2x
7.2x
6.7x
21.2x
20.9x
19.5x
34.9x
35.7x
31.7x
17%
IHS Markit
29,959
35,542
(2.8%)
7.3%
18.2%
9.8%
35.1%
42.7%
43.6%
8.1x
8.3x
7.7x
22.9x
19.4x
17.7x
66.8x
27.5x
24.1x
17%
Verisk Analytics
27,617
30,743
6.4%
6.0%
23.6%
7.7%
40.5%
47.0%
47.7%
11.8x
11.1x
10.5x
29.2x
23.6x
21.9x
63.2x
35.8x
32.3x
15%
MSCI
27,906
30,192
6.8%
8.9%
12.2%
10.2%
52.7%
55.4%
56.0%
19.4x
18.2x
16.7x
36.8x
32.8x
29.8x
72.9x
47.6x
42.4x
39%
Equifax
20,864
24,045
4.1%
4.4%
47.6%
9.1%
23.0%
32.6%
34.1%
6.9x
6.6x
6.3x
29.8x
20.2x
18.5x
89.7x
33.2x
29.9x
27%
TransUnion
16,520
20,115
(3.4%)
8.0%
(3.3%)
15.4%
36.5%
36.6%
39.1%
7.6x
7.8x
7.3x
20.7x
21.4x
18.6x
58.5x
34.8x
28.8x
18%
FICO
12,125
13,069
2.1%
4.1%
38.2%
6.6%
24.2%
32.7%
33.5%
10.9x
10.7x
10.3x
45.2x
32.7x
30.7x
87.9x
51.5x
46.7x
32%
Black Knight
11,276
12,895
0.0%
6.8%
45.8%
10.4%
33.7%
49.2%
50.8%
11.0x
10.9x
10.3x
32.5x
22.3x
20.2x
105.7x
37.5x
32.8x
20%
FactSet
12,440
12,839
3.6%
4.1%
4.2%
4.3%
35.3%
35.4%
35.5%
8.9x
8.5x
8.2x
25.1x
24.1x
23.1x
46.1x
31.0x
30.0x
15%
CoreLogic
5,338
7,004
(1.7%)
(0.7%)
42.3%
(1.6%)
21.0%
30.4%
30.1%
4.0x
4.0x
4.1x
18.9x
13.3x
13.5x
55.0x
22.2x
22.8x
59%
Morningstar
6,033
6,386
n.a.
n.a.
n.a.
n.a.
20.9%
n.a.
n.a.
5.4x
n.a.
n.a.
25.9x
n.a.
n.a.
54.4x
n.a
n.a
(3%)
Envestnet
3,935
4,562
5.9%
10.3%
137.3%
15.5%
9.5%
21.4%
22.4%
5.1x
4.8x
4.3x
53.1x
22.4x
19.4x
n.m
35.6x
30.8x
8%
BlackLine
4,675
4,472
17.8%
19.2%
n.a.
51.7%
(4.0%)
10.9%
13.9%
15.5x
13.1x
11.0x
n.m.
n.m.
79.4x
n.m
n.m
n.m
56%
LiveRamp
2,786
2,089
15.5%
20.8%
n.a.
n.a.
(51.9%)
(6.6%)
3.5%
5.9x
5.1x
4.2x
n.m.
n.m.
n.m.
n.m
n.m
n.m
(10%)
Mean
3.6%
7.7%
31.7%
11.4%
25.1%
34.5%
36.1%
9.3x
9.2x
8.5x
29.7x
23.0x
25.0x
63.7x
35.4x
31.9x
25.5%
Median
2.4%
7.0%
20.9%
9.1%
33.7%
34.9%
34.9%
8.1x
8.4x
8.0x
25.9x
22.3x
20.2x
58.5x
35.2x
30.5x
19.0%
26
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Banking Technology
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Banking Technology
MarketAxess
18,990
18,694
28.0%
8.3%
41.5%
4.5%
53.9%
59.6%
57.4%
36.6x
28.6x
26.4x
68.0x
48.1x
46.0x
115.1x
70.6x
66.7x
55%
Jack Henry
14,100
14,113
6.7%
7.3%
22.9%
3.3%
27.7%
31.9%
30.7%
8.7x
8.1x
7.6x
31.3x
25.4x
24.6x
61.6x
47.2x
43.0x
35%
Temenos
11,187
12,209
(1.9%)
12.7%
53.4%
11.4%
27.7%
43.4%
42.9%
12.6x
12.8x
11.4x
45.3x
29.5x
26.5x
80.8x
43.8x
39.4x
(16%)
Q2
4,565
4,925
25.4%
23.6%
n.a.
95.8%
(10.4%)
4.4%
7.0%
15.6x
12.5x
10.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
12%
Bottomline Technologies
2,230
2,259
4.3%
11.1%
150.9%
19.6%
8.8%
21.1%
22.7%
5.2x
5.0x
4.5x
59.8x
23.9x
19.9x
n.m
45.1x
33.5x
16%
Mean
12.5%
12.6%
67.1%
26.9%
21.5%
32.1%
32.1%
15.7x
13.4x
12.0x
51.1x
31.7x
29.3x
85.8x
51.7x
45.7x
20.2%
Median
6.7%
11.1%
47.4%
11.4%
27.7%
31.9%
30.7%
12.6x
12.5x
10.1x
52.6x
27.5x
25.6x
80.8x
46.2x
41.2x
15.5%
27
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – Payments
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
Payments
High Growth Omnichannel Payments
PayPal
204,574
203,129
13.7%
17.2%
58.8%
23.1%
19.2%
26.8%
28.1%
11.4x
10.1x
8.6x
59.7x
37.6x
30.5x
112.4x
52.1x
42.2x
51%
Shopify
113,303
111,083
37.5%
35.4%
n.a.
94.2%
(7.2%)
2.6%
3.8%
n.m.
n.m.
37.8x
n.m.
n.m.
n.m.
n.m
n.m
n.m
212%
FIS
82,845
102,039
19.9%
9.1%
54.4%
16.3%
32.9%
42.4%
45.2%
9.9x
8.2x
7.6x
30.0x
19.4x
16.7x
78.3x
24.6x
20.0x
8%
Fiserv
65,355
88,130
45.7%
6.4%
57.3%
12.0%
34.7%
37.5%
39.4%
8.7x
5.9x
5.6x
24.9x
15.8x
14.1x
55.1x
22.2x
18.3x
6%
Square
46,106
45,770
11.0%
24.7%
120.6%
187.3%
1.8%
3.5%
8.1%
9.7x
8.7x
7.0x
n.m.
n.m.
86.8x
n.m
n.m
111.7x
43%
Adyen
44,078
42,169
67.4%
42.5%
31.5%
49.6%
71.3%
56.0%
58.8%
n.m.
n.m.
42.2x
n.m.
n.m.
71.8x
n.m
n.m
103.5x
95%
Afterpay
11,287
11,296
97.0%
54.7%
n.a.
144.3%
(7.9%)
7.7%
12.1%
n.m.
26.5x
17.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
150%
StoneCo
10,739
11,212
176.3%
33.3%
n.m.
46.4%
7.9%
55.7%
61.1%
n.m.
19.6x
14.7x
n.m.
35.2x
24.1x
63.5x
70.5x
42.6x
34%
Pageseguro
11,584
10,904
87.7%
24.7%
n.a.
36.1%
(2.2%)
35.8%
39.0%
16.4x
8.7x
7.0x
n.m.
24.4x
17.9x
39.0x
41.6x
31.0x
(8%)
Mean
61.8%
27.6%
64.5%
67.7%
16.7%
29.8%
32.9%
11.2x
12.5x
16.4x
38.2x
26.5x
37.4x
69.7x
42.2x
52.8x
66%
Median
45.7%
24.7%
57.3%
46.4%
7.9%
35.8%
39.0%
9.9x
8.7x
8.6x
30.0x
24.4x
24.1x
63.5x
41.6x
42.2x
43%
General Payments & Services
Global Payments
50,734
59,305
34.2%
12.7%
55.4%
20.2%
39.2%
45.4%
48.4%
12.1x
9.0x
8.0x
30.8x
19.8x
16.5x
74.2x
27.5x
21.7x
4%
Worldline
15,868
16,816
(1.5%)
9.7%
18.7%
17.6%
20.6%
24.8%
26.6%
6.3x
6.4x
5.8x
30.5x
25.7x
21.8x
59.8x
46.9x
37.9x
21%
Nexi
10,880
13,760
(37.2%)
9.5%
51.4%
15.4%
22.7%
54.7%
57.6%
7.5x
11.9x
10.8x
32.9x
21.7x
18.8x
n.m
39.5x
33.4x
69%
Ingenico
9,971
11,943
(18.3%)
17.3%
10.3%
12.4%
15.6%
21.1%
20.2%
3.2x
3.9x
3.3x
20.2x
18.3x
16.3x
46.2x
31.8x
27.4x
83%
ACI Worldwide
3,129
4,442
10.0%
7.5%
70.2%
18.0%
16.0%
24.8%
27.3%
3.5x
3.2x
3.0x
22.0x
12.9x
10.9x
53.1x
21.5x
15.5x
(22%)
Cielo
2,284
4,106
0.7%
5.9%
(27.3%)
18.1%
25.5%
18.4%
20.5%
1.9x
1.9x
1.8x
7.6x
10.4x
8.8x
6.4x
17.0x
12.1x
(31%)
Network International
2,730
3,053
(15.2%)
20.7%
(20.7%)
35.3%
43.9%
41.1%
46.0%
9.1x
10.8x
8.9x
20.8x
26.2x
19.4x
40.4x
52.7x
30.7x
(25%)
EVO Payments
944
1,835
(12.5%)
16.2%
7.3%
24.5%
25.0%
30.7%
32.8%
3.8x
4.3x
3.7x
15.1x
14.1x
11.3x
77.1x
53.4x
33.8x
(23%)
Mean
(5.0%)
12.4%
20.7%
20.2%
26.1%
32.6%
34.9%
5.9x
6.4x
5.7x
22.5x
18.6x
15.5x
51.0x
36.3x
26.6x
9%
Median
(7.0%)
11.2%
14.5%
18.1%
23.8%
27.7%
30.1%
5.0x
5.3x
4.8x
21.4x
19.1x
16.4x
53.1x
35.7x
29.0x
(9%)
Payment Networks
Visa
411,263
423,053
(6.9%)
15.3%
(8.6%)
19.0%
68.2%
67.0%
69.2%
18.0x
19.3x
16.8x
26.4x
28.8x
24.2x
43.4x
38.9x
31.4x
11%
Mastercard
296,806
298,688
(6.3%)
19.5%
(12.4%)
29.3%
60.4%
56.4%
61.1%
17.7x
18.9x
15.8x
29.3x
33.5x
25.9x
50.3x
44.2x
33.6x
11%
Mean
(6.6%)
17.4%
(10.5%)
24.2%
64.3%
61.7%
65.1%
17.8x
19.1x
16.3x
27.8x
31.2x
25.1x
46.85
41.5x
32.5x
11.0%
Median
(6.6%)
17.4%
(10.5%)
24.2%
64.3%
61.7%
65.1%
17.8x
19.1x
16.3x
27.8x
31.2x
25.1x
46.85
41.5x
32.5x
11.0%
Mean (ALL)
26.5%
20.1%
31.1%
43.1%
25.7%
34.3%
37.1%
9.3x
10.4x
11.9x
26.9x
22.9x
25.6x
57.1x
39.0x
38.1x
36%
Median (ALL)
11.0%
17.2%
31.5%
23.1%
22.7%
35.8%
39.0%
9.1x
8.7x
8.0x
26.4x
21.7x
18.8x
54.1x
39.5x
31.4x
11%
28
Source: Capital IQ as of 30 June 2020
Note: EV/Revenue multiples in excess of 50.0x, EV/EBITDA multiples in excess of 100.0x and P/E multiples in excess of 150.0x
are considered not-material (“NM”) and are not included in average calculation
Trading comparables – HR & Payroll
Market Cap
(USDm)
EV (USDm)
Revenue Growth
EBITDA Growth
EBITDA Margin
EV / Revenue
EV / EBITDA
P/E
Share Price
Performance
Company
30/Jun/20
30/Jun/20
19/20
20/21
19/20
20/21
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
CY2019
CY2020
CY2021
LTM
HR & Payroll
Intuit
77,238
73,930
5.6%
10.7%
27.8%
14.5%
29.7%
35.9%
37.1%
10.4x
9.8x
8.9x
34.9x
27.3x
23.9x
62.9x
41.6x
35.8x
12%
ADP
63,989
64,745
2.8%
5.0%
(6.4%)
10.1%
26.2%
23.9%
25.0%
4.6x
4.5x
4.3x
17.7x
18.9x
17.2x
32.4x
27.5x
23.9x
(11%)
Workday
44,061
43,562
15.6%
16.6%
n.a.
18.1%
(6.2%)
23.1%
23.4%
12.0x
10.4x
8.9x
n.m.
44.9x
38.0x
n.m
83.0x
68.4x
(12%)
Paychex
27,173
27,309
(1.0%)
3.0%
(5.4%)
3.0%
42.0%
40.1%
40.1%
6.9x
7.0x
6.8x
16.5x
17.4x
16.9x
30.6x
26.9x
25.7x
(9%)
SS&C
14,473
21,737
(0.8%)
3.4%
4.8%
6.0%
36.4%
38.4%
39.4%
4.7x
4.7x
4.6x
12.9x
12.3x
11.6x
43.8x
14.5x
13.4x
(4%)
Coupa Software
18,582
18,594
26.2%
25.5%
n.a.
48.7%
(11.5%)
14.9%
17.7%
47.7x
37.8x
30.1x
n.m.
n.m.
n.m.
n.m
n.m
n.m
112%
Paycom
17,789
17,661
11.8%
21.0%
33.5%
26.4%
33.8%
40.4%
42.2%
23.9x
21.4x
17.7x
70.8x
53.0x
42.0x
126.2x
86.7x
67.9x
36%
The Sage Group
9,072
9,366
(4.5%)
(3.3%)
(13.0%)
0.4%
27.5%
25.1%
26.1%
3.9x
4.0x
4.2x
14.0x
16.1x
16.1x
23.6x
26.9x
25.5x
(17%)
Xero
8,817
8,791
20.1%
23.9%
265.6%
42.6%
6.8%
20.8%
23.9%
20.5x
17.1x
13.8x
n.m.
82.0x
57.5x
n.m
n.m
n.m
47%
Paylocity
7,832
7,735
17.1%
16.9%
92.1%
24.8%
15.3%
25.1%
26.8%
15.5x
13.3x
11.4x
n.m.
52.9x
42.4x
n.m
98.1x
79.0x
50%
TriNet
4,101
4,197
(75.0%)
(3.9%)
26.3%
(3.7%)
7.7%
38.9%
38.9%
1.1x
4.4x
4.5x
14.2x
11.2x
11.7x
25.3x
18.0x
18.0x
(11%)
Blucora
546
850
3.5%
9.3%
(16.9%)
41.9%
16.4%
13.1%
17.1%
1.2x
1.1x
1.0x
7.2x
8.7x
6.1x
15.6x
10.3x
6.2x
(62%)
Mean
1.8%
10.7%
40.8%
19.4%
18.7%
28.3%
29.8%
12.7x
11.3x
9.7x
23.5x
31.3x
25.8x
45.0x
43.3x
36.4x
10.9%
Median
4.6%
10.0%
15.5%
16.3%
21.3%
25.1%
26.4%
8.6x
8.4x
7.8x
15.3x
18.9x
17.2x
31.5x
27.2x
25.6x
(6.5%)
29
Appendix B: GP Bullhound fintech
credentials & team
30
Experience across key fintech verticals
DEEP FINTECH EXPERIENCE
ACQUIRED BY
IPO
€343m
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
INVESTMENT BY
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
ACQUIRED BY
ACQUIRED BY
INVESTMENT BY
ACQUIRED BY
INVESTMENT BY
Payments
Financial Services Software / Digital Banking
Lending
31
Authors
Alexis Majos
ANALYST
Alexis.Majos@gpbullhound.com
Adam Page
VICE PRESIDENT
Adam.Page@gpbullhound.com
Claudio Alvarez
PARTNER
Claudio.Alvarez@gpbullhound.com
32
Section 8
Appendix C: GP Bullhound corporate overview
33
We partner with global tech
leaders to build the future
34
GP BULLHOUND
FUND III
GP BULLHOUND
FUND IV
GP BULLHOUND
FUND V
GP BULLHOUND
FUND IV
GP BULLHOUND
FUND IV
A leading technology advisory and investment firm
ABOUT GP BULLHOUND
(1) League table data represents selected transaction advisors. Time period is 2016-Q4 2019. Global M&A transactions
between $10m and $300m
ESSENCE
BALTIC CLASSIFIEDS
GROUP
FALCON.IO
JELLYFISH
SPOTIFY
SLACK
REVOLUT
GLOVO
INNOGAMES
DELIVERY HERO
SIGNAVIO
PRODIGY FINANCE
TECHNOLOGY
PREDICTIONS
TITANS
OF TECH
SUMMIT
MARBELLA
INVESTOR
ALLSTARS
Mergers & Acquisitions
Investments
Capital Transactions
Insights & Events
We are the no. 1 global advisor (1) to leading technology
companies in competitive international sale and acquisition
processes.
The firm has completed 420 successful M&A transactions to date,
worldwide, with a total value of over $18bn.
Through our investment team, we provide investors with access to
category leading technology companies.
Our five closed-end funds have a total value of more than €280m
and our limited partners include institutions, family offices and
entrepreneurs.
We are a leading global advisor to companies and their owners
on capital related transactions including venture capital, growth
capital, acquisition funding, secondary block trades and initial
public offerings.
The firm has completed 120 rounds of financing for technology
companies to date, with a total value of $2bn.
Our events and speaking activities bring together thousands of
leading digital entrepreneurs and technology investors
throughout the year.
Our thought-leading research is read by thousands of decision-
makers globally and is regularly cited in leading newspapers and
publications.
MARIADB
FILTER
ECOVADIS
NORTHERN
TECH AWARDS
Confidential
35
35
Our focus sectors
DIGITAL
MEDIA
DIGITAL
SERVICES
SOFTWARE
MARKETPLACES
FINTECH
Confidential
36
Natalie Dean
VP FINANCE
Reda Ben Larbi
ANALYST
Per Roman
MANAGING PARTNER
Adam Birnbaum
DIRECTOR
Olivia Hornstein
OFFICE MANAGER
Vincent Wei
ASSOCIATE
Gaia Cibrario
ANALYST
Candice Mostisser
ANALYST
Alon Kuperman
EXECUTIVE
DIRECTOR
Joe Tabberer
VICE PRESIDENT
Jack Chan
DIRECTOR
Michelle Hoo
PERSONAL
ASSISTANT
Manon Rodier
ANALYST
Jaime Moreno
DIRECTOR STRATEGY
Julian Riedlbauer
PARTNER
Simon Miremadi
VICE PRESIDENT
Gioia Cerbelli
ASSOCIATE
Susanna Andersson
OFFICE MANAGER
Maria Sosna
OFFICE MANAGER
Hampus Hellermark
ASSOCIATE
Alessandro Casartelli
EXECUTIVE
DIRECTOR
Miguel Kindelán
EXECUTIVE
DIRECTOR
Erik Andershed
DATA SCIENTIST
Joel-Oskar Raisanen
ANALYST
Ian Carroll
DIRECTOR FINANCE
Ravi Ghedia
DIRECTOR
Sven Raeymaekers
PARTNER
Claudio Alvarez
PARTNER
Victoria Martin
PERSONAL
ASSISTANT
Greg Smith
PARTNER
Fraenze Gade
VP EVENTS
Charlotte Carew-Gibbs
HR MANAGER
Ed Prior
ASSOCIATE
Bulat Mardanov
ASSOCIATE
Sir Martin Smith
CHAIRMAN
Seth Alpert
SENIOR ADVISOR
Joy Sioufi
EXECUTIVE
DIRECTOR
Jon Cantwell
PARTNER
Ben Prade
EXECUTIVE
DIRECTOR
Matthew Finegold
ASSOCIATE
Alexis Majos
ANALYST
Staffan Ingeborn
NON-EXECUTIVE
DIRECTOR
Johannes Akermark
DIRECTOR
Victoria Palma Ehrichs
PERSONAL
ASSISTANT
Marvin Maerz
VICE PRESIDENT
Hugh Campbell
MANAGING PARTNER
Robert Ahldin
PARTNER
Kevin Siagam
ASSOCIATE
Okan Inaltay
ASSOCIATE
Javed Huq
DIRECTOR
Manish Madhvani
MANAGING PARTNER
Geneshe Edelman
OFFICE MANAGER
Joyce Byrne
OFFICE MANAGER
Joy Abiola
VICE PRESIDENT
Dipam Patel
VICE PRESIDENT
Elsa Hu
EXECUTIVE
DIRECTOR
Iman Crisby
EXECUTIVE
DIRECTOR MARKETING
Nikolas Westphal
EXECUTIVE
DIRECTOR
Karl Blomsterwall
ASSOCIATE
Johan Roslund
VICE PRESIDENT
Sandra Núñez
GRAPHIC DESIGNER
Brandon Overmyer
VICE PRESIDENT
Simon Nicholls
PARTNER
Joakim Dal
PARTNER
Alec Dafferner
PARTNER
Guillaume Bonneton
PARTNER
Alexis Scorer
EXECUTIVE
DIRECTOR
Oliver Schweitzer
EXECUTIVE
DIRECTOR
Elena Bocharova
ASSOCIATE
Felix Bratell
VICE PRESIDENT
Evgeny Yakovlev
ANALYST
Bev Boettcher
OFFICE MANAGER
Ashleigh MacDonald
FINANCE MANAGER
Caoimhe Bradley
OFFICE MANAGER
Jade Williams
PERSONAL
ASSISTANT
Maria Lazareva
PERSONAL
ASSISTANT
Joaquin del Rio Briones
ANALYST
Jack Curran
ASSOCIATE
Pierce Lewis-Oakes
ASSOCIATE
Minya Shidhaye
ANALYST
Andrea López
DESIGN COORDINATOR
Carl Wessberg
PARTNER
Freddie Dodge
ANALYST
Cecilia Roman
SENIOR ADVISOR
Praveena Muthukumar
VP FINANCE
Adam Page
VICE PRESIDENT
Matthew Young
ANALYST
Eric Crowley
DIRECTOR
Carolin Drewes
ASSOCIATE
Felix Lutjen
ANALYST
Dave Nish
VP TECHNOLOGY
Jaime Sendagorta
VICE PRESIDENT
Carlos de la Esperanza
ANALYST
David Travis
GENERAL COUNSEL
Jennifer Eller
RESEARCH EDITOR
Confidential
37
Global marquee transactions
Baltic Classifieds Group
ACQUIRED BY
GP Bullhound Fund III
EcoVadis
GP Bullhound Fund III
Innogames
INVESTED IN
INVESTMENT BY
INVESTED IN
INVESTMENT BY
UNDISCLOSED
REALISED
(DIRECT LISTING)
$200M
ACTIVE
€260M VALUATION
Apax Partners
Spotify
CVC Growth Partners
Klarna
Modern Times Group
GP Bullhound Fund IV
INVESTED IN
Jellyfish
GP Bullhound Fund I
Filter
13th Lab
INVESTMENT BY
INVESTED IN
ACQUIRED BY
ACQUIRED BY
Slack
Fimalac Group
Avito
Merkle
REALISED
(DIRECT LISTING)
£500M
REALISED
(ACQUIRED BY NASPERS)
UNDISCLOSED
UNDISCLOSED
Confidential
38
Thought-leading independent technology research –
connecting people in the tech industry
GP BULLHOUND INSIGHTS & EVENTS
Titans of Tech
PANDEMIC PROOF?
Technology
Software
Digital Services
Fintech
PREDICTIONS
GLOBAL MARKET
PERSPECTIVES
GLOBAL MARKET
PERSPECTIVES
GLOBAL MARKET
PERSPECTIVES
Summit
MARBELLA
Northen Tech
Investor
Conference
Market Update
AWARDS
ALLSTARS
RECEPTIONS
WEBINARS
39
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