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State Of Fintech Q2’21 Report: Investment & Sector Trends To Watch 1 WHAT IS CB INSIGHTS? CB Insights helps the world’s leading companies make smarter technology decisions with data, not opinion. Our Technology Insights Platform provides companies with comprehensive data, expert insights and work management tools to drive growth and improve operations with technology. CLICK HERE TO SIGN UP FOR A FREE TRIAL 1 CB Insights has helped Sun Life Financial work more efficiently. It's streamlined our research process and reduced the time it takes for us to get a perspective on an emerging trend. Christopher Collins Assistant Vice President of Digital Partnerships, Sun Life Financial October 5-6, 2021 New York, NY + ONLINE Our Most Popular Client-Exclusive Research Open Banking Outlook: How The API Economy Is Reinventing Financial Services Should Banks Adopt Embedded Lending? The Big Tech In Lending Report: How Amazon, Facebook, Google, & Apple Are Battling For The $3T+ Market Life Insurance From Your Gym? How Embedded Insurance Makes Enrollment More Accessible & Personalized The Big Tech In Fintech Report: How Facebook, Apple, Google, & Amazon Are Battling For The $28.2T Market The US Real Estate Tech Market Map: 130+ Companies Driving Innovation In The Built World 50+ Companies Pushing Buy Now, Pay Later Across The World Challenger Banks Targeting Specific Demographics Are Gaining Millions Of Customers. Here’s Why Incumbents Should Be Paying Attention Challenger Bank Funding Is Skyrocketing. Here’s What Comes Next ESP Vendor Assessment Matrix — Underwriting Data Platforms In Life Insurance ESP Vendor Assessment Matrix — Personal Automobile Telematics In P&C Insurance ESP Vendor Assessment Matrix — Geospatial Analytics In P&C Insurance With A $2.2B Deal, Acorns Is Joining The Wealth Tech SPAC Craze. Here’s What It Means For The Industry 5 Contents 8 Summary 10 Fintech In Review 31 Sector Trends 76 Appendix 6 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 7 Summary of findings Overall fintech trends Q2’21 was the largest funding quarter on record. Across 657 deals, global VC-backed fintech companies raised a record $30.8B, shattering last quarter’s funding record by 30%. This impressive funding growth was accompanied by a modest 2% deal growth quarter-over-quarter (QoQ) and a 29% increase year-over-year (YoY). Funding activity grew in nearly all fintech sectors except for wealth tech and capital markets tech. The digital lending, banking, and SMB fintech sectors saw the most pronounced deal activity growth QoQ. Explosion of mega-rounds drove the funding boom. This quarter, global fintechs raised 88 mega-rounds (deals worth $100M+) — up from 60 in Q1’21 — accounting for 70% of total funding. As a result, the average deal size grew 28% from nearly $37M in Q1’21 to $47M. South America led growth in both funding and deal count. Funding to South America-based fintechs grew dramatically by 153% QoQ, while deal activity on the continent grew 52% QoQ — the largest increase among regions. Deal activity was varied with QoQ growth across North America, South America, and Australia, while Asia, Europe, and Africa all saw deal declines. However, across the board, all continents saw increased funding. Fintech public exits reached new highs. There were 19 public exits (including announced, but not yet completed, deals) for VC-backed fintech companies in Q2’21. In addition to traditional IPOs, a notable portion of these deals represented SPACs, which have become an increasingly popular path for fintechs to enter public markets. This quarter, Grab, Better.com, Dave, and Acorns all announced plans to go public via SPACs. Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, 8 private equity firms, or any debt, secondary, or line-of-credit transactions. All data is sourced from CB Insights. Summary of findings Fintech sector financing trends Payments: Payments companies raised over $8B in Q2’21, a QoQ increase of 25%. Deal activity in the same period fell 5% to 114. There were 24 mega-rounds, which accounted for over 80% of total funding. Banking: Banking companies had a record-breaking quarter. Deal activity grew 59% QoQ and funding grew 43%. There were 16 mega-rounds, which accounted for 68% of total funding. Digital lending: Funding and deal activity to digital lending companies exploded to nearly $7B across 126 deals, representing QoQ growth of 76% and 19%, respectively. Mega-rounds doubled this quarter to 16 from Q1’21. Wealth management: Funding fell by 21% QoQ to $4.4B, while deal activity grew slightly. Wealth tech saw 12 mega-rounds — a new record — making up 77% of total funding in the quarter. Insurance: Insurtech funding surged by 79% in the quarter while deals remained flat, as mega-round activity bolstered funding growth. Mega-rounds represented 66% of total funding in the quarter. Capital markets: Capital markets deal activity fell 10% QoQ, marking the third straight quarter of decline. After a record Q1’21, funding fell by 82% to $5.1B. SMB: Fintechs focused on SMBs had a strong quarter. Funding grew 37% to $5.9B. SMB deal activity was the strongest it’s been in 5 quarters, increasing 47% QoQ to 85 deals. Real estate: Despite a 20% decrease in deals, late-stage mega-rounds pushed funding to a 5-quarter high. Real estate fintech funding increased 25% QoQ to $3.2B. Note: This report focuses on equity rounds to VC-backed fintech companies. This report does not cover companies funded solely by angels, 9 private equity firms, or any debt, secondary, or line-of-credit transactions. All data is sourced from CB Insights. Q2’21 Fintech In Review 10 Q2’21 FINTECH SPOTLIGHT #1 Open banking gains momentum, while new players expand to open finance M&A deal spotlight: Visa to acquire Tink Notable Q2’21 open banking funding deals Tink’s latest valuation: $2.2B (up from $825M) Acquisition overview: After abandoning its acquisition of Plaid due to regulatory challenges, and determined to enter the open banking space, Visa announced its decision to acquire Tink, a UK-based open banking platform, in June 2021. The API platform integrates with more than 3,400 banks and financial institutions, reaches 250M bank customers across 18 markets, and is used by over 10,000 developers. Company Funding $425M Series D $70M Series D $43M Series A Description Select investors San Francisco-based Plaid is a data aggregation platform that enables developers to connect to users’ bank accounts via APIs. London-based TrueLayer enables developers to connect to bank data via APIs. Altimeter, Ribbit Capital, New Enterprise Associates Addition, Anthemis, Connect Ventures Mouro Capital, Northzone, Temasek Deal date Apr ’21 Apr ‘21 Mexico City-based Belvo is a developer-first API platform focused on open finance* applications in Latin America. Future Positive Capital, Kibo Ventures, FJ Labs, Y Combinator Jun ‘21 *In addition to open banking, which focuses on enabling third-party access to bank account data, the industry is increasingly interested in unlocking 11 opportunities associated with other financial data like mortgages, credit, payroll, 401K, insurance, and others. This is known as open finance. Q2’21 FINTECH SPOTLIGHT #2 Robinhood’s long-awaited public debut nears Key highlights: • On July 1, retail stock brokerage firm Robinhood filed for an IPO on the Nasdaq stock market under the symbol “HOOD.” • In 2020, Robinhood reported $7M in net income, up from a $107M net loss in 2019, and $959M in revenue, up from $278M the prior year. • Robinhood’s trading platform has enticed large numbers of first-time retail investors and more than doubled its monthly active users (MAU) from 8.6M in Q1’20 to 17.7M in Q1’21. • The company’s revenue grew 4x to $522M in Q1’21 compared to the same period last year. • In Q1’21, Robinhood derived 81% of its revenue from payment for order flow (PFOF), a method that has been under scrutiny from the SEC. The regulator claims PFOF poses a conflict of interest to brokerages. Source: Company filing 12 Q2’21 FINTECH SPOTLIGHT #3 Funding to LatAm fintech companies has soared since 2016 Latin America-based fintech funding has grown at a 57% CAGR since 2016 Brazil-based fintechs represent 70% of total funding between 2016 and 2021 YTD Funding amount ($M) $5,000 $4,000 $3,000 159 133 113 $2,000 63 Deal count 200 141 160 120 94 80 $1,000 40 $279 $296 $709 $1,893 $2,803 $4,246 $0 0 2016 2017 2018 2019 2020 2021 YTD Colombia Uruguay 3% 4% Argentina 4% Other* 2% Ecuador 1% Mexico 17% Brazil 70% Note: Data as of 06/28/2021. *Other includes Chile, Peru, Puerto Rico, Dominican Republic, and Honduras. Latin America estimates cover South 13 America and Mexico. Q2’21 FINTECH SPOTLIGHT #4 Blockchain funding hits record high — several crypto-focused startups top the deal table Blockchain funding crosses $4B in Q2’21 for the first time Funding amount ($M) Deal count $5,000 217 250 $4,000 160 187 200 $3,000 132 135 126 150 $2,000 100 $1,000 50 $0 $817 $492 $712 $813 $2,892 $4,379 0 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 Top 5 Q2’21 deals raised by blockchain fintechs Company Deal date // Amount raised ($M) Description Select investors May ‘21 // $440M Circle helps businesses accept and send payments through blockchain infrastructure. Fidelity, Valor Capital, Breyer Capital, Digital Currency Group Jun ‘21 // $380M Ledger leverages encrypted chip technology to build security solutions & hardware wallets for crypto & blockchain. Digital Currency Group, Felix Capital, 10T Fund, Uphold Ventures Apr ‘21 // $300M Paxos delivers blockchain solutions for global financial institutions and investors. FT Partners, Liberty City Ventures, PayPal Ventures May ‘21 // $300M Block.one’s open-source blockchain software provides developers and businesses with tools to build blockchain infrastructure. Founders Fund, Nomura, Galaxy Digital May ‘21 // $250M Bitso is a regulated Mexicobased crypto exchange. Tiger Global, Coatue, QED Investors, Kaszek Ventures, Bond 14 Q2’21 FINTECH SPOTLIGHT #5 Southeast Asia’s super apps focus on expanding share of users’ wallets SPAC ANNOUNCEMENT MERGER MEGA-ROUND Q2’21 activity: SPAC announcement (currently delayed) Valuation: $39.6B HQ: Singapore Super app products and services Mobile payments, insurance, investing, merchant payments, ride-hailing, food and grocery delivery, package delivery, hotel booking, gift cards and rewards, and enterprise services. Q2’21 activity: Merged with Tokopedia Latest funding: $300M Corporate Minority-III Total funding: $5B HQ: Indonesia Latest funding: $121M Private Equity-IV Total funding: $503M HQ: Philippines Mobile payments, bill pay, buy now, pay later (BNPL), donations, insurance, investing, merchant payments, point-of-sale (POS), business management and expenses, ridehailing, food and grocery delivery, package delivery, moving, healthcare, shopping, and entertainment. Mobile payments, virtual cards, online shopping, bill pay, remittances, merchant payments, POS, payroll, flight booking, game purchasing, ticket purchasing, and music streaming. 15 BIG TECH IN FINTECH Big tech in fintech Q2’21 updates • Product: WhatsApp launched P2P money transfers in India and Brazil to increase its market share in digital payments in emerging markets. • Partnership: The company’s rebranded crypto project, “Diem,” announced Silvergate Capital as the exclusive issuer of the Diem US dollar stablecoin, which will be launched in 2021. • Product: Apple introduced Apple Family Card to help families manage shared finances in a single app, including money management services for parents, teens, and children. • Product: Google revamped Google Pay and launched Google Plex, a mobile bank account. • Partnership: Google partnered with Shopify to give its 1.7M merchants access to consumers on Google Search. • Partnership: Google partnered with Western Union and Wise to offer international money transfer services in India and Singapore. • Product: Amazon shared plans to scale its contactless checkout system Just Walk Out (JWO) to Whole Foods in Washington state. • Investment: Amazon led a $10M funding round to the India-based trade receivables fintech M1xchange. 16 FINTECH EXIT ACTIVITY Fintech IPOs heat up across the globe April 14, 2021 (began trading) HQ: California, US IPO valuation: $65.3B Crypto exchange Coinbase launched its IPO. The company priced its shares at $250 and began trading at $381. April 14, 2021 (began trading) HQ: Texas, US IPO valuation: $1.9B Banking software firm Alkami launched its IPO. The company priced its shares at $30 and began trading a little over $41. May 26, 2021 (began trading) HQ: Massachusetts, US IPO valuation: $2.4B US-based foreign exchange payments company Flywire launched its IPO. The company priced its shares at $24 and began trading at $34. June 3, 2021 (began trading) HQ: Montevideo, Uruguay IPO valuation: $6.2B Payments platform company dLocal launched its IPO. The company priced its shares at $21 and began trading at $31— reflecting a $9B valuation. Note: Select IPO transactions. June 9, 2021 (began trading) HQ: California, US IPO valuation: $14.3B Modern card issuer Marqeta launched its IPO. The company priced its shares at $27 and began trading at $32.50 — reflecting a $15.2B valuation. June 17, 2021 (announced) HQ: London, UK IPO valuation: $11B Cross-border payment company Wise, formerly known as TransferWise, announced plans to go public on the London Stock Exchange via direct listing. 17 FINTECH INVESTMENT TRENDS Q2 funding grows 30% QoQ, setting new record Global VC-backed fintech funding ($M), Q2’18 – Q2’21 192% 30% $14,000 $8,375 $14,000 $8,359 $9,681 $11,273 $9,206 $13,284 $10,468 $11,760 $10,542 $10,525 $11,018 $23,630 $30,792 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 18 FINTECH INVESTMENT TRENDS Deal activity increased 29% YoY to surpass Q1’21’s record Global VC-backed fintech deal activity, Q2’18 – Q2’21 29% 602 620 585 634 554 634 580 545 508 511 574 646 657 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 19 FINTECH INVESTMENT TRENDS Funding YTD exceeds total funding in 2020 by 24% Global VC-backed deal activity and funding ($M), 2016 – 2021 YTD (6/30/21) Funding amount ($M) $60,000 $50,000 $40,000 $30,000 1,630 $20,000 $10,000 $0 $23,642 2016 1,994 $23,185 2017 2,437 $48,587 2018 2,402 $44,231 2019 Deal count 24% 3,000 2,138 1,303 2,500 2,000 1,500 1,000 $43,845 2020 $54,421 202012Y1TD 500 0 20 FINTECH INVESTMENT TRENDS Mega-rounds surged, fueling 70% total funding Global VC-backed fintech mega-round deals and % of total funding, Q2’18 – Q2’21 Mega-rounds 100 80 60 Mega-round funding % of total funding 88 100% 80% 60 60% 40 20 15 18 21 21 26 26 21 22 30 23 31 40% 20% 79% 45% 58% 57% 52% 59% 50% 63% 50% 56% 44% 69% 70% 0 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 Note: Mega-rounds are deals worth $100M+. 2020 2021 21 FINTECH INVESTMENT TRENDS Mid- and late-stage deal share grew by 8 percentage points QoQ % of quarterly deal activity by deal stage, Q2’18 – Q2’21 100% 75% 7% 14% 7% 15% 5% 13% 7% 13% 6% 14% 7% 16% 9% 15% 6% 16% 11% 17% 6% 16% 9% 18% 8% 10% 15% 8% 12% 26% 24% 30% 26% 30% 23% 25% 29% 23% 19% 50% 25% 24% 25% 23% 25% 43% 42% 42% 43% 37% 43% 40% 37% 34% 40% 35% 34% 28% Series E+ Series D Series C Series B Series A Seed / Angel 0% Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Note: Early-stage deals include Seed/Angel and Series A, mid-stage rounds include Series B and C, and late-stage deals include Series D and E+. 22 FINTECH INVESTMENT TRENDS Mid-stage deals saw significant growth QoQ Quarterly deal activity by deal stage, Q2’18 – Q2’21 4% 8% 172 145 Seed / Angel Series A Series B Series C Series D Series E+ 115 25% Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 72 26% 49 30 Series E+ rounds grew the most, 76% QoQ Q2'21 Note: Early-stage deals include Seed/Angel and Series A, mid-stage rounds include Series B and C, and late-stage deals include Series D and E+. 23 FINTECH INVESTMENT TRENDS North & South America saw most stark growth Quarterly deals by continent, Q2’20 – Q2’21 320 281 250 North 200 208 America 149 Asia 132 136 157 148 Europe 122 129 133 155 128 Q2 Q3 Q4 2020 Q1 Q2 2021 South 21 America 10 Africa Australia 6 Q2 21 17 4 Q3 2020 4% 8% 32 28 21 19 21 16 13 11 8 Q4 Q1 Q2 2021 24 FINTECH INVESTMENT TRENDS South America funding grew 153% QoQ Quarterly funding ($M) by continent, Q2’20 – Q2’21 $45 4% $193 $999 $72 $281 8% $2,523 $7,257 $15 $314 $405 $2,046 $1,941 $5,821 $15 $42 $726 $2,240 $1,795 $5,707 $48 $334 $534 $1,956 $1,908 $6,239 $5,532 $3,707 $13,154 $4,097 $16,560 Q2 Q3 Q4 Q1 Q2 2020 North America Asia Europe South America Australia 2021 Africa +153% QoQ in South America 25 FINTECH INVESTMENT TRENDS 50% of top deals went to Europe-based cos Top fintech deals of Q2’21 Company Deal date // Total disclosed Amount raised ($M) funding ($M) Select investors HQ Description May ’21 // $900M $987M Founders Fund, Technology Project A Ventures, Accel, Sequoia Capital Germany Trade Republic is a mobile-only and commission-free broker. Jun ‘21 // $800M $934M Blackstone, Technology Crossover Ventures, HMI Capital Netherlands Mollie builds payment products, commerce solutions, and APIs that allow users to accept online and mobile payments for small online stores and Fortune 500 companies. Jun ’21 // $750M $2,545M CPP Investments, Berkshire Hathaway, Sunley House Capital Management Brazil Nubank is a challenger bank that offers digital savings accounts, no-fee credit cards, and personal loans to customers. Jun ’21 // $650M $924M Jupiter Asset Management, LGT Group Stiftung, ACE & Company, Germany wefox enables customers, insurance brokers, and insurance providers to transact and manage insurance products digitally. Jun ‘21 // $639M $3,472M SoftBank Group, Honeycomb Asset Management, WestCap Group Sweden Klarna offers a buy now, pay later solution to consumers who shop online. The company offers 0% interest, pay-in-4 installments that have no credit impact and an instant approval process. 26 FINTECH INVESTMENT TRENDS 50% of top deals went to Europe-based cos Top fintech deals of Q2’21 (continued) Company Deal date // Total disclosed Amount raised ($M) funding ($M) Select investors HQ Description May ’21 // $610M $712M Meritech Capital Partners, Aubrey Drake Graham, Kelly Olynyk Canada Wealthsimple is a technology-driven investment manager that combines a robo-advisor platform with access to live advisors. Apr ’21 // $600M $954M Boston Capital Ventures, UOB Venture Management, Yunfeng Capital China Xingyun Group provides a full-link cross-border commodity integrated service that integrates brand services, imported commodity agency services, supply chain trade financing services, and cross-border logistics services. Apr ’21 // $500M $777M Tiger Global Management, UK Hedosophia SaltPay operates as a financial technology company that specializes in payments, ePOS, and management tools. Apr ’21 // $500M $905M Apr ’21 // $485M $488M SoftBank Group US Ribbit Capital, Bond Capital, D1 Capital Partners, Founders Fund Mexico Better provides consumers access to digital mortgages, real estate, title, and homeowners insurance. Kavak is an online used car marketplace that aims to offer transparent pricing, financing, and security to car buyers and sellers. 27 The most active fintech VCs from Q2’20 – Q2’21 By number of unique fintech company investments (new or follow-on) Rank Investor Select fintech investments 1* 2 2 4 5 *Sequoia includes its US, China, Israel, and India funds. 28 The most active fintech VCs from Q2’20 – Q2’21 By number of unique fintech company investments (new or follow-on) Rank Investor 5 Select fintech investments 7 7 9 10 29 Globally there are 131 FINTECH UNICORNS Valued in aggregate at $516B 30 Q2’21 Fintech Sector Trends 31 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 32 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 33 PAYMENTS Funding grew 25% QoQ, while deals fell slightly Global VC-backed payments deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $10,000 $8,000 $6,000 92 $4,000 $2,000 $0 $3,337 Q2 101 $3,856 Q3 2020 85 $2,213 Q4 Deal count 160 120 114 120 80 40 $6,421 Q1 $8,031 0 Q2 2021 34 LatAm payments cos saw a surge in funding Top Latin America fintech deals by funding amount, Q2’21 Company HQ Deal date // Q2’21 funding ($M) Total disclosed funding ($M) Select investors Brazil Jun ’21 // $430M private equity $460M FTV Capital, Endeavor, Advent International Description EBANX is an integrated financial services company that offers cross-border payment processing across Latin America. Mexico Jun ’21 // $250M Series D $397M SoftBank Group, Viking Global Investors, General Atlantic, Alta Ventures Mexico Clip offers a smart phone plug-in for accepting payments and a risk management system to manage merchants and process transactions. Brazil May ’21 // $190M Series B $195M Coatue Management, DST Global, FIS, Valor Capital Group, The Hive CloudWalk is an open payment platform for creating and managing POS, hardware-agnostic payments apps. Uruguay Apr ’21 // $150M undisclosed $350M Alkeon Capital Management, Tiger Global Management, D1 Capital Partners, Bond, General Atlantic dLocal is a payments platform designed to handle mass online payments, operating as the payments processor and merchant of record. Ecuador Jun ’21 // $86M Series B $86M SoftBank Group, Kaszek Ventures, Dila Capital, Magma Partners, Conexo Kushki offers merchants a secure payment processing service. Platform features are enabled through its fully PCI Level I-compliant payment APIs. 35 E-commerce companies combating payment fraud raised late-stage mega-rounds Q2’21 Funding: $300M Series F Select Investors: Tiger Global Management, Bessemer Venture Partners, Sequoia Capital, Scale Venture Partners Focus: New York-based Forter provides a plug-and-play fraud solution technology for e-commerce that automates the review process by instantly analyzing profile data, behavioral data, and cyber intelligence, enabling the ability to decline fraudsters and approve consumers in real time. Q2’21 Funding: $205M Series E Select Investors: Owl Rock Capital Partners, CPP Investments, FIS, Neuberger Berman, Menlo Ventures, Bain Capital Ventures Focus: San Jose-based Signifyd combines machine learning with human work to eliminate online payment fraud for e-commerce companies. The company leverages big data, machine learning, and domain expertise to provide a financial guarantee against fraud on approved orders that later turn out to be fraudulent. 36 Early-stage virtual corporate card & expense management companies attracted investment Select fintech deals by funding amount, Q2’21 Deal date // Company HQ Q2’21 funding ($M) Total funding ($M) Select investors Description US Apr ’21 // Series A $44M QED Investors, Partners for Growth, Endeavor, Global Ventures, BECO Capital, Endure Capital Tribal Credit is a corporate card designed to meet the needs of underserved startups in emerging markets. UK Apr ’21 // $20M Series A Ireland May ’21 // $12.2M angel Saudi Arabia Apr ’21 // $1.7M Series A $24.5M $20.7M $3.3M QED Investors, Earlybird Venture Capital Gareth Lambe ANZi Payhawk issues company cards and aims to help companies manage their expenses by combining credit cards, payments, expenses, and cash into one integrated platform. CleverCards is a global payments platform that enables businesses and governments to send digital Mastercards instantly to employees, customers, or suppliers by SMS, WhatsApp, or email. DiviPay is a virtual corporate card and expense management platform that aims to help businesses eliminate the need for reimbursements, credit card sharing, and expense reporting. 37 Momentum is growing for corporate cards as fintechs launch unique card offerings Source: CB Insights — news mentions of “corporate card” AND “fintech” 38 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 39 BANKING Funding grew 43% QoQ, while deals jumped 59% Global VC-backed banking deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $6,000 Deal count 119 120 82 $4,000 73 75 75 80 $2,000 $0 $2,520 Q2 $2,304 Q3 2020 $2,736 Q4 40 $4,175 Q1 $5,953 0 Q2 2021 40 Bank compliance requires new approaches in the age of crypto Wells Fargo: US bank set to offer crypto fund to rich clients May 19, 2021 | 41 Startups leverage machine learning and data to help FIs combat AML and crypto crime Q2'21 Funding: $100M Series E at a $4.2B valuation Select Investors: Coatue, Benchmark, Accel, Addition, Dragoneer, Altimeter Focus: Chainalysis is a blockchain analysis company that helps banks, businesses, and governments investigate and prevent cryptocurrency crime and money laundering. Chainalysis supports over 100 digital assets, encompassing ~90% of daily market volume including Bitcoin, Ethereum, Litecoin, XRP, and the most popular ERC-20 tokens and stablecoins. Q2'21 Funding: $27.1M Series B Select Investors: Aspect Ventures, Third Point Ventures, Neotribe Ventures Focus: CipherTrace offers crypto anti-money laundering, forensics, and blockchain threat intelligence solutions that can protect cryptocurrency companies and financial institutions from security and compliance risks. CipherTrace leverages proprietary clustering algorithms and covers more than 2,000 cryptocurrency entities. 42 Teen-focused challenger banks deepened their war chests Q2'21 Funding: $260M Series D Valuation: $2.3B Select Investors: Andreessen Horowitz, Owl Ventures, Canapi Ventures, Fin Venture Capital, Wells Fargo Strategic Capital, Bond Focus: Atlanta-based Greenlight offers a smart debit card for kids. Parents can preload the card with funds from a mobile app and limit where children can spend their money. The company says it has more than tripled its YoY revenue. 3M children and parents are on its platform. Q2'21 Funding: $220M Series D Valuation: $2.2B Select Investors: Andreessen Horowitz, Foundation Capital, Tiger Global Focus: New York-based Current builds collaborative banking solutions and began by offering a teen banking product. The challenger bank now has over 3M users and has tripled its valuation since its last raise. Current targets its teen banking product, which costs $36 per year, directly to parents. Note: Clients interested in learning more can check out our brief on segment-focused banking. Q2'21 Funding: $100M Series C Select Investors: General Catalyst, Coatue, Stripe, Charli D’Amelio, The Chainsmokers Focus: Palo Alto-based Step provides financial tools to teens and families. The company grew to 1.5M users within 6 months of its launch. Unlike Current, Step appeals directly to its target audience (13- to 18-year-olds) through endorsements from social media influencers and celebrities such as Charli D’Amelio, Josh Richards, The Chainsmokers, Steph Curry, and Justin Timberlake. 43 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 44 DIGITAL LENDING Funding jumped 76% QoQ as deals grew 19% Global VC-backed lending deals and funding ($M), Q2’20 – Q1’21 Funding amount ($M) $8,000 $6,000 Deal count 160 126 106 120 $4,000 $2,000 $0 66 $1,745 Q2 70 $2,008 Q3 2020 60 $1,369 Q4 $3,981 Q1 2021 $6,991 Q2 80 40 0 45 BNPL expands beyond retail into healthcare, wedding planning, ride-hailing, & streaming Q2’21 Funding: $130M Series D HQ: California, US Select Investors: Group 11, Migdal Insurance, AltaIR Capital, Zeev Ventures, More Investment House, Harel Group Focus: Sunbit offers in-store and online financing solutions for over 7,300 merchants, ranging from auto dealership service centers to optical practices and dentist offices. After this last raise, the company reached a $1.1B valuation. Q2’21 Funding: $0.83M seed HQ: New York, US Select Investors: Y Combinator, Acrobator Ventures Focus: Maroo provides a payment platform and buy now, pay later solution for weddings. The company allows newlyweds to spread the cost of their wedding into monthly installments at 0% APR for 24 months while also providing financial planning advisory services. Note: Clients can read CB Insights’ market outlook on buy now, pay later (BNPL) here. Q2’21 Funding: $3M seed HQ: Mexico City, Mexico Select Investors: Homebrew, Susa Ventures, Unpopular Ventures, Rogue Capital, Crossbeam Venture Partners Focus: Nelo is a buy now, pay later mobile app that allows people to pay in installments for services like ride-hailing (Uber), streaming (Netflix), and telephone usage (AT&T). 46 Companies provide white-label BNPL services & POS financing solutions to lenders Q2’21 Funding: Incubator/accelerator Select Investors: Mastercard Start Path Focus: Jifiti offers an end-to-end consumer financing solution for banks and lenders to quickly launch a white-labeled buy now, pay later solution requiring zero point-of-sale integration. Q2’21 Funding: $99M Series D Select Investors: WestCap Group, Goldman Sachs, Invus Group, Barclays Bank, Hanaco Venture Capital Focus: Amount helps banks and financial institutions digitize their financial infrastructure through a modern API framework. The company provides retail banking and point-of-sale financing solutions. 47 Early-stage pay advance companies saw investor attention across the world Select fintech deals by funding amount, Q2’21 Company Deal date // Country Q2’21 funding ($M) Total disclosed funding Select investors Description India Jun ’21 // $16M Series A $20.1M QED Investors, XYZ Ventures, Jigsaw, DST Global, RTP Global Refyne is an earned wage access platform that empowers full-time and contracted employees with real-time access to pay. US Jun ’21 // $15M Series A $19.5M Upfront Ventures, Founder Collective, Walkabout Ventures, Thrive Capital Clair provides instant pay access as a service for human capital management platforms and the gig economy. Indonesia Jun ’21 // $5.6M seed $5.6M Integra Partners, Trihill Capital, Global Founders Capital, 1982 Ventures, ADB Ventures Wagely allows employees to get instant access to their earned wages, without making any changes to their processes or payroll. Pakistan Jun ’21 //$2M seed $2M Village Global, i2i Ventures, Zayn Capital, VEF Abhi provides employees with salary advances based on accrued wages. France Apr ’21 // $1.8M angel $1.8M Undisclosed Rosaly is an on-demand payroll management and financial education system for employees. 48 Early-stage startups offer borrowers alternative ways to access and build credit Q2’21 Funding: $0.13M seed Select Investors: Y Combinator, Core Innovation Capital, OVO Fund Focus: US-based PingLend allows anyone to get a credit card regardless of their credit score by collateralizing assets such as gold, jewelry, watches, and handbags. Q2’21 Funding: $2.2M seed Select Investors: Unpopular Ventures, DV Collective, Canaan Partners, Amino Capital, JG Digital Equity Ventures, Ignite Impact Fund Focus: Philippines-based Plentina creates an alternative to credit scoring and lending essentials for emerging markets. Q2’21 Funding: $0.02M seed Select Investors: Startupbootcamp AfriTech - ASIP Accelerator Program Focus: Kenya-based Weza offers a microlending app and digital platform featuring lending and credit scoring services. 49 With consumers wary of credit, companies look to debit data to build thin credit files Source: CB Insights — news mentions of “debit card” 50 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 51 WEALTH MANAGEMENT Funding fell 21% QoQ, while deals remained flat Global VC-backed wealth tech deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $6,000 74 $4,000 53 Deal count 87 88 100 70 80 $3,400 60 40 $2,000 $600 $660 20 $1,223 $0 $1,357 $876 $2,179 $4,385 0 Q2 Q3 Q4 Q1 Q2 2020 2021 52 Germany-based retail investing platforms raised mega-rounds from global investors Q2’21 Funding: $900M Series C Valuation: $5.3B Select Investors: Founders Fund, Accel, Sequoia Capital, Project A Ventures, Technology Crossover Ventures, Thrive Capital Focus: Trade Republic is a mobile-only and commission-free broker that offers extended trading hours. Q2’21 Funding: $183M Series E Valuation: $1.4B Select Investors: BlackRock, Tencent Holdings, Holtzbrinck Ventures, HV Capital, MPGI, Tengelmann Ventures Focus: Scalable Capital is an online wealth manager and neobroker that helps users with long-term systematic wealth creation. 53 New alternative investing platforms give users access to non-traditional asset classes Q2’21 Funding: $100M Series C HQ: New York, US Select Investors: Expansion VC, Greycroft, Saturn Partners, Top Tier Capital Partners, Citigroup, Soros Fund Management Focus: YieldStreet provides access to asset classes that are historically unavailable to most investors, such as litigation finance, real estate, etc. Q2’21 Funding: $13M Series B-II HQ: New York, US Select Investors: Accel, Upfront Ventures, Relay Ventures, Porsche Ventures, Social Leverage Focus: Rally is a platform that securitizes unique, high-value assets and offers shares as equity investments to users of all income levels. Q2’21 Funding: $8M Series A HQ: New York, US Select Investors: Andreessen Horowitz, Jeremy Levine, Kevin Durant, AJ Vaynerchuk, Coca-Cola European Partners Focus: StarStock is a marketplace for sports card hobbyists to buy, sell, and invest in their favorite athletes. Q2’21 Funding: $0.1M incubator HQ: Texas, US Select Investors: Envestnet | Yodlee Launchpad, OnRamp Insurance Accelerator Focus: Rocket Dollar allows users to invest in non-traditional assets like startups, peer-topeer lending, small businesses, and real estate. 54 Segment-focused money management apps showed early-stage activity Q2’21 Funding: $6.1M seed HQ: Berlin, Germany Select Investors: EQT Ventures, 468 Capital Focus: Wajve is a Berlin-based financial mobile app for Gen Z that combines banking, advice, and education in one app. Q2’21 Funding: $1.7M pre-seed HQ: San Francisco, CA Select Investors: Undisclosed Focus: B9 offers a suite of app-based financial services to unbanked workers in the US who are underserved by traditional banks, such as first- and secondgeneration immigrants. Q2’21 Funding: $3M seed HQ: Marina del Rey, CA Select Investors: Lerer Hippeau Ventures, TTV Capital, Citi Ventures Focus: Ensemble helps divorced parents to track and manage shared expenses for their children in a single app. 55 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 56 INSURANCE Mega-rounds drove 79% QoQ funding growth Global VC-backed insurance deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $5,000 Deal count 160 $4,000 $3,000 $2,000 $1,000 $0 82 $1,625 Q2 96 $2,208 Q3 2020 96 $2,063 Q4 121 121 120 80 40 $2,477 Q1 $4,440 0 Q2 2021 57 Europe-based insurtech companies raised mega-rounds Q2’21 Funding: $650M Series C HQ: Berlin, Germany Select Investors: Salesforce Ventures, OMERS Ventures, Mundi Ventures Focus: Wefox is a digital insurance platform that enables consumers, brokers, and insurance companies to transact and manage insurance products. The Wefox Group also has its own licensed insurance provider, One, which offers household and personal liability insurance. In 2020, the company generated $140M in revenue. Q2’21 Funding: $350M Series D HQ: London, UK Select Investors: Octopus Ventures, Munich Re Ventures, CommerzVentures, FTV Capital, EQT Partners Focus: Bought By Many is a leading pet insurance startup. The company says it now covers almost half a million pets across the world and has written over $220M in premiums in the past 12 months. Q2’21 Funding: $223M Series D HQ: Paris, France Select Investors: Coatue Management, Index Ventures, Ribbit Capital, Dragoneer Investment Group Focus: Alan provides tech-centric health insurance offerings. Its target audience includes startups, freelancers, and individuals. The company claims to currently cover 160,000 people and produce an annualized revenue of over $118M (€100M). 58 Auto insurance acquisitions highlight interest in telematics and usage-based insurance USAA acquired usage-based auto insurer Noblr USAA, the fifth-largest US personal auto insurer, announced it would acquire San Francisco-based Noblr, a usage-based insurance (UBI) startup, for an undisclosed amount in June. Noblr uses telematics technology to enable customers to pay for their auto insurance based on how far and how safely they drive. USAA already has a similar UBI product called SafePilot, but it will likely use Noblr’s technology to provide its customers with new and improved UBI products. Cambridge Mobile Telematics acquired fellow telematics provider TrueMotion Cambridge Mobile Telematics announced in June that it had agreed to acquire TrueMotion for an undisclosed amount. Both companies operate in a B2B model, selling telematics solutions to insurers to enable them to build their own usage-based insurance products. Note: Clients interested in learning more can check out our ESP Vendor Assessment Matrix — Personal Automobile Telematics In P&C Insurance. 59 Investor interest in embedded insurance* spiked in Q2’21 Select fintech deals by funding amount, Q2’21 Company Deal date // Total disclosed Q2’21 funding ($M) funding May ’21 // $260M Series C Jun ’21 // $50M Series C - II $367M June ‘21 // $19.5M Series C $57.6M Select investors GreatPoint Ventures, SoftBank Group, Nationwide Mutual Insurance Company, PayPal Ventures Description Extend offers merchants the capability to add warranty coverage to their e-commerce products. Mundi Ventures, Signals Venture Capital, FinLeap, SBI Life Insurance, MS&AD Ventures Element is a digital risk carrier that offers property & casualty insurance for retail protection products through partners. Apr ’21 // $25M Series B – II $40M Anthemis, Cathay Innovation, Prime Ventures, Alven Capital Qover is a B2B2C provider of insurance products that can be embedded into digital platforms. May ’21 // $20M Series B $37M IA Capital, Nephila Capital, Markel, Greycroft, RRE Ventures, Coatue Management Boost is a managing general agent (MGA) that helps companies build end-to-end insurance products to offer to their customers. May ’21 // $6.5M Series A $13.8M QBN Capital, Guinness Asset Management, Cell Rising Wrisk is a usage-based insurance product provider for ecommerce and digital platforms. *Embedded insurance allows non-insurers across industries to integrate insurance solutions into existing digital products. 60 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 61 CAPITAL MARKETS Deals slid for the third straight quarter Global VC-backed capital markets deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $10,000 91 $8,000 62 $6,000 Deal count 100 85 83 75 80 60 $4,000 40 $2,000 $0 $2,446 Q2 $2,193 Q3 2020 $2,338 Q4 20 $9,334 Q1 $5,119 0 Q2 2021 62 Digital assets crept further into capital markets, gaining institutional interest Morgan Stanley Co-Leads $48 Million Investment To Bring Blockchain To Capital Markets June 21, 2021 | Source: CB Insights — news mentions of (“crypto” OR “digital asset” OR “blockchain” OR “bitcoin”) AND “capital markets” 63 Investors saw opportunities in digital asset security & infrastructure providers Q2’21 Funding: $380M Series C Select Investors: Felix Capital, Samsung Ventures, Draper Dragon, Uphold Ventures Focus: Ledger offers software and hardware solutions for digital asset security for both individual and institutional investors. Q2’21 Funding: $53M Series B Select Investors: Cowen, Blockchain.com, Race Capital Focus: PolySign's custody solution supports the full spectrum of digital assets and is designed to scale to trillions under management. Q2’21 Funding: $34M Series B-III Select Investors: Ripple, Blockchain Capital, IDC Ventures, Morgan Stanley, Coinbase Ventures Focus: Securitize offers a fullstack institutional-grade compliance platform for issuing and managing digital securities. Q2’21 Funding: $25M Series B-II Select Investors: MMC Ventures, Target Global, Dawn Capital, Illuminate Financial Management, LocalGlobe Focus: Copper is a digital asset custodian. Its infrastructure enables institutions to acquire, store, and trade digital assets while managing risks. 64 Compliance and risk management solutions across deal stages raised funding Q2’21 Funding: $120M growth equity Select Investors: Edison Partners, Vista Equity Partners, K1 Capital Focus: US-based ComplySci is a provider of web-based regulatory compliance technology and services for the financial services community. Q2’21 Funding: $36M Series A Select Investors: EIT Digital Venture Program, Graybella Capital Focus: Bulgaria-based Omnio’s solution assists financial institutions with compliance and financial crime regulations. Q2’21 Funding: $20M Series C-II Select Investors: Balderton Capital, Index Ventures, Tech Nation Fintech, Ontario Teachers' Pension Plan, GS Growth Focus: UK-based ComplyAdvantage uses AI, machine learning, and big data to help institutions manage their compliance and risk obligations while preventing financial crime. 65 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 66 SMB Deals grew 47%, pushing funding to new heights Global VC-backed SMB deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $6,000 73 $4,000 67 60 58 Deal count 100 85 80 60 $2,000 $0 $2,979 Q2 $2,120 Q3 2020 $1,346 Q4 40 20 $4,377 Q1 $5,981 0 Q2 2021 67 SMBs’ access to capital and services is a priority for economic recovery Goldman Sachs' Marcus branches further into US SMB lending through C2FO partnership May 19, 2021 | 68 Fintechs focus on offering non-dilutive, account receivables-based financing Q2'21 Funding: $29.3M Series A Select Investors: QED Investors, Bling Capital, SciFi VC, Caffeinated Capital Focus: New York-based Capchase is a provider of nondilutive capital for recurring-revenue companies. Startups upload key details of their customer contracts and financial history to Capchase, and the company uses its underwriting algorithms to assess the quality of those contracts and extend a debt line. Q2'21 Funding: $80M Series B Select Investors: Lakestar, All Iron Ventures, White Star Capital, Global Founders Capital, Mouro Capital Focus: London-based Uncapped offers revenue-based growth financing to startups for a flat fee as low as 6%. The company initially targeted post-revenue businesses looking to fund sales and marketing, but it has since expanded its scope. In 2020, Uncapped began issuing Visa cards, and it plans to expand into banking products and services. 69 France-based companies target SMB pain points across the accounting & finance stack Q2'21 Funding: $100M Series B Select Investors: BlackFin Capital Partners, Greenoaks Capital Management, Partech Partners Focus: Lyon-based Agicap offers a cash management and forecasting solution for smalland medium-sized businesses. Agicap allows SMBs to connect their bank accounts to Agicap for real-time monitoring. Q2'21 Funding: $20M Series A Select Investors: Seventure Partners, ISAI, Silicon Badia, MAIF Avenir Focus: Paris-based Expensya focuses on the management of professional expenses, offering companies and accounting firms cloud, web, and mobile software to report expenses. Q2'21 Funding: $18.4M Series B Select Investors: Sequoia Capital Focus: Saint-Germain-en-Layebased Pennylane is a platform that allows business managers to manage companies’ financial data in real time. The company reports that 1,000 executives are using its services. Q2'21 Funding: $15.8M Series A Select Investors: Serena Capital Focus: Paris-based Memo Bank provides SMBs with financial products and services. The company secured a bank license approval from the ECB and Banque de France. 70 WHAT THE STATE OF FINTECH COVERS PAYMENTS Payments processing, card developers, money transfer platforms, and tracking software BANKING Digital-first banks or companies digitizing banking services for credit and debit DIGITAL LENDING Companies creating new solutions for personal or commercial lending WEALTH MANAGEMENT Personal finance tools, investment and wealth management platforms, and analytics tools INSURANCE Companies selling or distributing insurance digitally or providing data analytics and software for (re)insurers CAPITAL MARKETS Sales and trading, analysis, and infrastructure tools for financial institutions SMB Companies focused on providing solutions to small- and medium-sized businesses REAL ESTATE Mortgage lending, transaction digitization, and financing platforms 71 REAL ESTATE Despite 20% drop in deals, funding grew 25% Global VC-backed real estate deals and funding ($M), Q2’20 – Q2’21 Funding amount ($M) $4,000 77 $3,000 $2,000 $1,000 $0 $1,153 Q2 78 $1,012 Q3 2020 82 $1,882 Q4 Deal count 100 81 80 65 60 40 20 $2,526 Q1 $3,168 0 Q2 2021 72 Online real estate marketplaces raised megarounds in Latin America Q2’21 Funding: $300M Series E HQ: Sao Paulo, Brazil Select Investors: Kaszek Ventures, General Atlantic, SoftBank Group, Maverick Capital, Ribbit Capital, Google for Startups Accelerator Focus: Quinto Andar is an online marketplace for renting or buying residential properties. Q2’21 Funding: $100M Series B HQ: Bogota, Colombia Select Investors: Homebrew, Zigg Capital, Inspired Capital, Tiger Global Management, Softbank Latin America Ventures, Clocktower Technology Ventures Focus: Habi helps middle-class customers buy and sell their homes more efficiently, aiming to remove the uncertainty of traditional real estate transactions. Q2’21 Funding: $100M Series D-II HQ: Sao Paulo, Brazil Select Investors: Andreessen Horowitz, Monashees+, Fifth Wall Ventures, QED Investors, Thrive Capital, Vulcan Capital, Canary VC Focus: Loft is an online real estate marketplace for buying and selling apartments. 73 Home services and amenity providers saw funding activity Select fintech deals by funding amount, Q2’21 Company Deal date // Country Q2’21 funding ($M) Total disclosed funding ($M) India Jun ’21 // $190M Series F-II Apr ’21 // $65M Series F $441M Select investors Description Accel, Tiger Global Management, Bessemer Venture Partners Urban Company is a home services marketplace where customers can book home repair services and amenities. US May ’21 // $50M Series C $80M Moderne Ventures, Wells Fargo Strategic Capital, General Catalyst, Founder Collective Super is a subscription-based service for homeowners that aims to help with home maintenance. US Apr ’21 // $17.2M Series A $24M Bain Capital Ventures, Y Combinator Latchel is a 24/7 maintenance system that takes repair requests directly from tenants and offers ondemand virtual or in-home assistance. US Apr ’21 // Undisclosed Incubator Home Depot, Liberty Mutual Strategic Ventures, Plug and Play Accelerator Homee is an on-demand repair and property maintenance services app that provides customers with instant access to handymen. 74 All-cash offer providers gained traction as competition intensifies in the housing market Q2’21 Funding: $150M Series C Select Investors: Andreessen Horowitz, Fifth Wall Ventures, Pritzker Group Venture Capital Focus: Flyhomes is an online brokerage that helps users buy, sell, or trade up homes through all-cash or guaranteed offers. Q2’21 Funding: $136M Series B-II Select Investors: LiveOak Venture Partners, Adams Street Partners, Javelin Venture Partners, Blackstone Focus: Homeward helps people buy homes faster through alternative financing options such as all-cash offers. Q2’21 Funding: $12M seed Select Investors: Y Combinator, DN Capital, SignalFire Focus: Accept.inc is a digital lender that helps users submit an all-cash offer on a home upon qualifying for a mortgage. 75 Appendix 76 View Our Fintech Expert Collections Fintech Payments Banking Digital Lending Wealth Management Insurance Capital Markets SMB Real Estate 77 Get All The Data Used In This Report Fintech Payments Banking Digital Lending Wealth Management Insurance Capital Markets SMB Real Estate 78 Methodology CB Insights encourages 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 can work 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 that have received funding at any point from venture capital firms, corporate venture groups, or super angel investors. ― Fundings of only private companies. Funding rounds raised by public companies of any kind on any exchange (including Pink Sheets) are excluded from our numbers, even if they received investment by a venture firm. ― Only includes the investment made in the quarter for tranched investments. If a company does a second closing of its Series B round for $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 various federal and state regulatory filings, direct confirmation with firms or investors, or press releases. ― Previous quarterly VC reports issued by CB Insights have exclusively included VC-backed rounds. In this report, any rounds raised by VC-backed companies are included, with the exceptions listed. — 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. — 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 it from a venture capital firm. As a result, it is not included. — No buyouts, consolidations, and/or recapitalizations. All three of these transaction types are commonly employed by private equity firms and are 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), are excluded 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. — No government funding. Grants, loans, or equity financings by the federal government, state agencies, or public-private partnerships to emerging startup companies are not included. 79
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