Q2

2022

EMERGINGTECHRESEARCH

FintechReport

VCtrendsandemergingopportunities

REPORTPREVIEW

Thefullreportisavailablethrough

thePitchBookPlatform.

Contents

Verticaloverview

Q22022timeline

Fintechlandscape

FintechVCecosystemmarketmap

VCactivity

Emergingopportunities

On-chaincreditprotocols

Non-dilutivefinancingforstartups

Selectcompanyhighlights

Percent

Parafin

OpenNode

Celo

Q22022FintechReport

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InstitutionalResearchGroup

Analysis

RobertLeSeniorAnalyst,EmergingTechnology

robert.le@

pbinstitutionalresearch@

Data

TJMeiDataAnalyst

Publishing

ReportandcoverdesignedbyDrewSanders

PublishedonAugust3,2022

ThisreportservesasaquarterlysnapshotofthefintechverticalinQ22022.Foracomprehensive,detailedanalysisofthefintechindustrybysegment,pleaseseeourlatest

annualreport.

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News

VCdeal

News

Apr1

May1

Jun1

News

VCdeal

VCexit

Jun30

Q22022timeline

May10

KuCoin,acentralizedcryptoexchange,closesa$150.0millionSeriesBata$10.0billionpost-moneyvaluationasthecryptomarketsbegintonosedive.ThedealisledbyJumpCryptowithparticipationfromCircleVentures,IDGCapital,andMatrixPartners.

June10

WhileMasterCardandVisahaveforgedaheadwithmultipleservicesandpartnershipsinthecryptospaceinrecentyears,AmericanExpresslaunchesitsfirstpartnershipwithAbraforacryptorewardscreditcard.

April12

StripeteamsupwithAlphabet,Meta,Shopify,andMcKinseytocommitnearly$1.0billiontobuycarbonoffsetsbyaggregatingdemandandsupplyviaadvancecommitments.

June23

TelAviv-basedPagaya,anAIcredittechnologyplatform,completestheonlymajorfintechpubliclistingforthequarter,a$8.5billiondeSPAContheNASDAQ.

May7

ThealgorithmicstablecoinTerraUSD,whichwaspeggedto$1,beginstodepeg,fallingtounder30centsoverthefollowingweek.ThebroaderLunaecosystemcollapsesoverthenextfewweeks,draggingdownlargepartsofthecryptoindustry.

May11

Deel,apayrollplatformforglobaldistributedteams,raisesa$50.0millionSeriesD3ata$12.1billionpost-moneyvaluation.Thecompanyraiseda$14.0millionSeriesAata$59.0millionvaluationatthebeginningofthepandemicinMay2020.

Q2VCdealcountsummary

1,103

totaldeals

-24.4%

QoQgrowth

-19.0%

YoYgrowth

Q2VCdealvaluesummary

$24.1B

totaldealvalue

-17.8%

QoQgrowth

-15.9%

YoYgrowth

Q22022FintechReport

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2

4

7

5

6

3

Fintech

landscape

1Alternativelending

2Capitalmarkets

3Consumerfinance

4Digitalassets

5FinancialservicesIT

6Payments

7Regtech

8Wealthtech

1

8

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VCactivity

InQ22022,fintechcompaniesgloballyraised$24.1billioninventurecapital(VC)across1,103deals,representinga17.8%decreaseinquarter-over-quarterdealvalue.ThisisthelargestpercentagedropindealvaluesinceQ32018.Paymentscompaniescontinuetoleadthelargestportionofdealvalue,at$7.6billion,yetthissumwas18.7%lowerthanthe$9.3billioninQ1.

Ramp,anexpensemanagementplatform,raisedthelargestroundofthequarterinthesegment,a$748.3millionSeriesCatan$8.1billionpost-moneyvaluation.Othernotablepaymentdealsofthequarterincludepoint-of-salesoftwareandhardwaredeveloperSumUp(a$626.6millionlate-stageroundatan$8.5billionvaluation),tworoundsfromapplicationprogramminginterface(API)-basedpaymentscompanies:Scalapay,whichraiseda$524.0millionSeriesB,andGoCardless,whichraiseda$312.0millionSeriesGata$2.1billionpost-moneyvaluation.Alternativelendingalsohadastrongquarter,raising$4.7billionacross176deals.Thesedealsincludea$306.0millionSeriesAforItaliansoftware-as-a-service(SaaS)financingplatformBloom,a$270.0millionSeriesCata$750.0millionvaluationforIndian-basedconsumerlenderStashfin,anda$170.0millionSeriesBforcommercialrealestatefinancingplatformLev.FinancialservicesITandregtechcompanieshadthelargestVCinvestmentincreaseduringthequarter,up83.8%and3.2%,respectively.Thesefundraisessupportourviewthatfintechcompanieswithcontract-basedrecurringrevenuesfromenterprises,banks,andotherfinancialinstitutionswilllikelythriveinthecurrentenvironment.

Duringthequarter,themedianpre-moneyvaluationforVC-backed,late-stagefintechcompaniesdecreased40.6%to$153.0millionfromQ1’s$257.5million.Thisisroughlyaflatvaluationcomparedto2021’sfull-yearfigureof$151.3million.Early-stagemedianpre-moneyvaluations

Q22022FintechReport

FintechVCdealactivity

5,594

3,423

3,421

2,667

2,562

2,250

2,130

1,530

1,036

672

$121.8

20122013201420152016201720182019202020212022*

Dealvalue($B)Dealcount

$54.0

$20.6

$25.8

$53.5

$47.4

$46.1

$21.7

3,412

$3.6

$2.5

$9.9

Source:PitchBook|Geography:Global|*AsofJune30,2022

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VCACTIVITY

Keyfintechlate-stageVCdeals*

CompanyClosedate(2022)SubsegmentStageDealsize($M)Leadinvestor(s)Valuationstep-up

TradeRepublicJune3BrokerageLate-stageVC$1,152.7OntarioTeachers'PensionPlan,SequoiaCapitalN/A

Ramp

April1

Businessproducts&servicespayments

Late-stageVC

$748.3

FoundersFund

2.0x

SumUpJune22PaymentplatformsandPOSLate-stageVC$626.6BainCapitalTechOpportunitiesN/A

LiquidityGroupApril5AlternativecapitalLate-stageVC$475.0

ApolloGlobalManagement,MUFGInnovationPartners

N/A

ConsenSys

April1

Institutionalservicesandinfrastructure

Late-stageVC

$450.0

ParaFiCapital

2.1x

Circle

April12

Institutionalservicesandinfrastructure

Late-stageVC

$400.0

BlackRock

N/A

GoCardlessMay9PaymentplatformsandPOSLate-stageVC$312.0Permira6.9x

SpotOnMay18PaymentplatformsandPOSLate-stageVC$300.0DragoneerInvestmentGroup1.1x

XenditMay19PaymentplatformsandPOSLate-stageVC$300.0CoatueManagement,InsightPartnersN/A

Stashfin

June21CreditandBNPLLate-stageVC$270.0

AbstractVentures,FasanaraCapital,UncorrelatedVentures

N/A

Source:PitchBook|Geography:Global|*AsofJune30,2022

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VCACTIVITY

KeyfintechVCexits*

CompanyClosedate(2022)SubsegmentExitsize($M)ExittypeAcquirer(s)/indexPost-moneyvaluation($M)

Qwil

May26

Businessproducts&servicespayments

N/A

Buyout

AresCapitalCorporationBDC,LSQFundingGroup,LovellMinnickPartners,Techstars

N/A

PagayaJune23PlatformsandAPIs$8,500.0PubliclistingEJFAcquisition$8,500.0

Finxact

April1

Enterprisearchitecture

$650.0

Acquisition

Fiserv

$650.0

StreetSharesApril1PlatformsandAPIsN/AAcquisitionMeridianLinkN/A

Embed

June21

PlatformsandAPIs

N/A

Acquisition

FTXUS

N/A

SentieoMay11Advisortech$185.0AcquisitionAlphaSenseN/A

OrderBird

May12

PaymentplatformsandPOS

N/A

Acquisition

Nexi

N/A

Superhero

June8

Brokerage

$1,060.4

Acquisition

Swyftx

$1,060.4

ErisX

May2

Cryptocurrencywalletsandexchanges

$400.0

Acquisition

CboeGlobalMarkets

N/A

Finiata

May4CommerciallendingN/ABuyoutMantaRayVenturesN/A

Source:PitchBook|Geography:Global|*AsofJune30,2022

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SELECTCOMPANYHIGHLIGHTS

Totalraised:Lastfinancingvaluation:

$18.5M$45.5Mpost-

moneyvaluation

Lastfinancing:

Raised$12.5MinaSeriesA

BCapitalGroup,WhiteStarCapital,RechargeThematicVentures,RevelPartners

Founded

2018

Located

Leadinvestors:

NewYork,NY

Overview

Percentisaprivatecreditinvestmentplatformforindividualandinstitutionalinvestors.Theplatformenablesinvestorstoaccessahistoricallyhard-to-reachandopaque$1.2trillionassetclass.8Thedemandforinvestinginprivatecredithasincreasedsignificantlyinrecentyears,primarilybecauseprivatecreditisoneofthehighestyieldingassetclasses,comeswithinvestorprotections(covenants),isviewedashavinginflationprotectionduetofloatingrates,andistypicallylowerinvolatilityduetoilliquidity.9Percent’splatformconnectsborrowers,investors,andunderwriters—streamliningtheprivatecreditdealprocessforeachstakeholder.

Borrowershaveaccesstoaplatformthatprovidesreal-timemarketdata.Thatwaytheycanviewtheirofferingagainstothersonthemarket,includingtermsandassetperformance.Onceaborrower’sdealgoeslive,itcangaugeinvestorinterestduringsyndicationwithaliveviewoftheorderbook.Investorswithaccesstotheplatformcanviewalllivedealsandcaninvestinsome

dealswithaslittleas$1,000.Underwritershaveaccesstoaplatformthatsupportstheentiredealprocess,includingsourcing,structuring,syndicating,andservicing.

InJune2022,PercentpartneredwithDeFiprivatecreditprotocolAnzentoprovideaCDS-likeprotectionforsomeoftheassetsonPercent’splatform.Anzenprovidesthelossprotectionthroughitsstablecoinreservetreasuryandstakingpools.Percenthasseenstronggrowthoverthelast12months,havingroughlydoubledthevolumeofprivatecredittransactionsonitsplatformtomorethan$900million,witha3xincreaseonrevenueandannualrecurringrevenueduringthetimeperiod.

Leadership

PercentwasfoundedbyCEONelsonChu.ChupreviouslyworkedatBankofAmericainwealthmanagementandatBlackRockinfixedincome.ChuisalsocofounderofMySupport,aplatformacquiredbyRISEServicesthatisdesignedtohelpseniorsandpeoplewithdisabilitiesonMedicaid.

8:“PrivateCredit’sRapidGrowth:ASecularTrend,”Blackstone,April2022.

9:“PrivateCreditOutlook,”JPMorganAssetManagement,MegMcClellan,etal.,January12,2022.

Seed

June2018

Totalraised:

$300,000

Pre-moneyvaluation:

$1.0M

Leadinvestor(s):

N/A

Seed

April2019

Totalraised:

$1.7M

Pre-moneyvaluation:

$6.3M

Leadinvestor(s):

RechargeThematicVentures

Seed

April2020

Totalraised:

$4.0M

Pre-moneyvaluation:

$11.0M

Leadinvestor(s):

RevelPartners

SELECTCOMPANYHIGHLIGHTS

Financinghistory

SeriesA

March2021

Totalraised:

$12.5M

Pre-moneyvaluation:

$33.0M

Leadinvestor(s):

BCapitalGroup,WhiteStarCapital

Q22022FintechReport

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AboutPitchBookEmergingTechResearch

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investorstounderstandtheindustries,sectorsandcompaniesdrivingtheassetclass.

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