Gradually,

Then Suddenly:
The Sequel

Suddenly
Has Arrived
1
 About Me
CEO and Co-Founder of CB Insights

- Inc 5000 company &

- 5th fastest growing SaaS co in NYC (47th in USA)

Ran AmEx $50M Chairman’s Innovation Fund

asanwal@cbinsights.com Prior work in VC and M&A

Graduate of Wharton (Finance and Accounting) and the

@asanwal
University of Pennsylvania (Chemical Engineering)

2
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 that
SIGN UP FOR A FREE TRIAL
enable them to discover, understand, and
make technology decisions.

2
A Gradually, Then
Suddenly Recap
#CBIFutureFintech4
 ERNEST HEMINGWAY, THE SUN ALSO RISES

“How did you go bankrupt?”

5
 ERNEST HEMINGWAY, THE SUN ALSO RISES

“Two ways…
Gradually and then suddenly”

6
Corporations are
very vulnerable to
this acceleration
7
Technology is eating every industry
Top 5 publicly traded companies (by market cap) TECH OTHER

2006

2011

2016

Inspired by: Visual Capitalist 8

Technology is eating every industry
Top 5 publicly traded companies (by market cap) TECH OTHER

2006

2011

2016

2021

$1.66T $967.1B
$2.17T $1.82T
$2.36T
Inspired by: Visual Capitalist 9
And technology adoption is getting faster
Monthly active user accounts in millions

123M

54M
0M 52M

Source: (1) comScore Media Metrix, (2) comScore Media Metrix, news, and company filings (3) News and company filings in addition to estimates derived from 10
these sources
And technology adoption is getting faster
Monthly active user accounts in millions

145M

0M

Source: (1) comScore Media Metrix, (2) comScore Media Metrix, news, and company filings (3) News and company filings in addition to estimates derived from 11
these sources
And technology adoption is getting faster
Monthly active user accounts in millions
419M

0M

Source: (1) comScore Media Metrix, (2) comScore Media Metrix, news, and company filings (3) News and company filings in addition to estimates derived from 12
these sources
And technology adoption is getting faster
Monthly active user accounts in millions

250M

0M

13
Alipay adoption
Monthly active user accounts in millions

14
Coinbase user Growth
20.0M

.1M

15
Robinhood user growth

4M

0.3M

16
A MARRIAGE MADE IN HEAVEN

Everyone is a tech company

“We are a technology “We are a technology

company.” company.”
Marianne Lake Lloyd Blankfein

Source: Bloomberg, Business Insider 17

NEW FOES AND NEW FRENEMIES

Nobody is staying in their lane anymore

With new business models and

technologies coming to the market
and incumbent business models
challenged, new competitors
emerge and prior partners start to
resemble competitors.

18
COMPETITIVE LINES BEING REDRAWN

Benz competitors were BMW and Lexus

VS

19
COMPETITIVE LINES BEING REDRAWN

Benz competitors were BMW and Lexus

Now it's Tesla, Uber, Google

VS

20
COMPETITIVE LINES BEING REDRAWN

Walmart competitors were Target, Costco

VS

21
COMPETITIVE LINES BEING REDRAWN

Walmart competitors were Target, Costco

Now it's Amazon, Alibaba

VS

22
COMPETITIVE LINES BEING REDRAWN

Comcast vs. Time Warner vs. Verizon

VS VS

23
COMPETITIVE LINES BEING REDRAWN

Comcast vs. Time Warner vs. Verizon

Now it's them plus Netflix, Youtube

VS VS

VS

24
COMPETITIVE LINES BEING REDRAWN

Amex vs. Visa vs. Mastercard vs. Citi

VS VS VS

25
COMPETITIVE LINES BEING REDRAWN

Amex vs. Visa vs. Mastercard vs. Citi

Now it's them plus PayPal, Stripe, Venmo, Adyen

VS VS VS

VS

26
COMPETITIVE LINES BEING REDRAWN

eTrade vs Ameritrade vs Schwab

VS VS

27
COMPETITIVE LINES BEING REDRAWN

eTrade vs Ameritrade vs Schwab

Now it's Robinhood, Coinbase

VS VS

VS

28
What Suddenly
looks like
#CBIFutureFintech
29
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

Apple launches
1st iPhone

30
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

Apple launches
1st iPhone

Gradually
(21 months)

31
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

Apple launches
1st iPhone

Suddenly
(5 months)

32
EVERYTHING LOOKS GREAT

Nothing to worry about, right?

“BlackBerry is still leader of

“RIM revenue, profits surge”
the pack”
- Business
- CNN Money

“BlackBerry Maker Snags Half “U2 jumps ship from Apple to

of U.S. Smartphone Market” Research in Motion”

33
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

34
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

Gradually
(21 months)

35
GRADUALLY, THEN SUDDENLY IN ACTION

Which company is this?

Suddenly
(5 months)

36
 NOBODY WANTS TO BE THIS GUY

“Neither RedBox nor Netflix

are even on the radar screen in
terms of competition.”
– Jim Keyes, CEO of Blockbuster (2008)

37
What’s behind
Suddenly in
financial services
#CBIFutureFintech
38
MONEY AND CHANGING TECHNOLOGY & BUSINESS MODELS

The forces behind Suddenly

A flood of fintech The great financial

innovation capital services unbundling

39
A flood of fintech
innovation capital
40
NEW BUSINESS MODELS, PRODUCTS, DISTRIBUTION INNOVATIONS COMING QUICK

The insurgent competitors are multiplying

$5,000k

open source and

horizontal scaling

cloud and AWS

Cost to launch
a tech startup

$500k
$50k $5k

2000 2005 2009 2011

Source: Upfront Ventures 41

A TSUNAMI OF CAPITAL IS FLOWING INTO PRIVATE TECHNOLOGY COMPANIES

Global funding to startups hit all time high

$156.2B
Q2 2021
$136.2B

$100.4B 157%
increase YoY
$78.8B $80.4B

$68.7B $70.0B $68.0B $69.2B

$65.3B $63.1B
$62.7B $62.0B $61.1B
$57.9B
$57.3B
$60.7B
Q2 2020
$43.3B
$40.5B $40.0B
$37.0B

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

CB Insights Q2 2021 State of Venture Report 42

UNICORN HERD GETS BIGGER AND BIGGER

Q2'21 shatters previous record for unicorn

births, up 491% YoY
135
136 unicorns
Q2 2021

113

491%
increase YoY
51
46 47
44
37 38 37
34
29 31
26
23 21 23
20
14 13 13
23 unicorns
10 Q2 2020

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

CB Insights Q2 2021 State of Venture Report 43

THE BIG WINNER IN VENTURE IS FINTECH

1 of every 5 venture dollars in Q2 went

into fintech
950

850
$33.7B
$33.7B
750 Q2 2021

650
$25.0B
550

191%
increase YoY
450

350
$12.5B $12.5B $12.8B
$11.8B $11.6B $11.7B
$11.0B
$9.6B $9.7B $9.7B $10.0B
250
$11.6B
$8.6B $8.8B Q2 2020
$7.4B
$6.6B 150
$5.5B $5.4B
$4.8B
$3.5B
50

-50
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

CB Insights Q2 2021 State of Venture Report 44

FOLLOW THE SMART MONEY

The smartest money is all in on fintech

Select fintech
Rank Investor
investments

Note: Sequoia includes its US, China, Israel, and India funds. Period from Q2’20 to Q2’21. Source: CB Insights State of Fintech Report 45
FOLLOW THE SMART MONEY

The smartest money is all in on fintech

Select fintech
Rank Investor
investments

10

Note: Sequoia includes its US, China, Israel, and India funds. Period from Q2’20 to Q2’21. Source: CB Insights State of Fintech Report 46
INSURGENT COMPANIES ARE COMING FROM EVERYWHERE

Innovation capital has gone global

Canada
$4.1B
111 deals

Asia
$42.4B
Europe 2,577 deals

$30.6B
United States 1,821 deals
$70.4B
2,718 deals

LatAm
$7.2B
218 deals

CB Insights Q2 2021 State of Venture Report 47

INNOVATION FROM EVERYWHERE

Fintech’s biggest deals outside of USA

Round
Company Round Name Select Investors Country Continent Sector Industry Subindustry
Amount

Mobile & Mobile

Corporate South Accounting &
1 $2,021M J.P. Morgan Chase & Co. Brazil Telecommu Software &
Minority America Finance
nications Services
C6 Bank

Asset &
Founders Fund, Sequoia Capital, Accel, Mobile & Mobile
Financial
2 $900M Series C Technology Crossover Ventures, Creandum, Germany Europe Telecommu Software &
Management &
Thrive Capital, Project A Ventures nications Services
Trading
Trade Republic

General Atlantic, Technology Crossover Internet

3 $800M Series C Ventures, Alkeon Capital Management, HMI Netherlands Europe Internet Software & Payments
Capital, EQT, Blackstone Services
Mollie

CPP Investments, Sands Capital, MSA Capital,

Mobile & Mobile
Sunley House Capital Management, Verde South Accounting &
4 $750M Series G - II Brazil Telecommu Software &
Asset Management, Absoluto Partners, America Finance
nications Services
Berkshire Hathaway
Nubank

Horizons Ventures, Seedcamp, Jupiter Asset Mobile & Mobile

Accounting &
5 $650M Series C Management, Mountain Partners, LGT Group Germany Europe Telecommu Software &
Finance
Stiftung, Victory Park Capital, EDBI nications Services
wefox

Source: Q2 2021 largest financings from CB Insights State of Venture 48

LatAm fintech cos saw a surge in funding
Top Latin America fintech deals by funding amount, Q2’21
Deal date // Total disclosed
Company HQ Q2’21 funding ($M) funding ($M) Select investors Description

EBANX is an integrated financial services company

Jun ’21 // $430M private FTV Capital, Endeavor, Advent
Brazil $460M that offers cross-border payment processing across
equity International
Latin America.

SoftBank Group, Viking Global Clip offers a smart phone plug-in for accepting
Mexico Jun ’21 // $250M Series D $397M Investors, General Atlantic, Alta payments and a risk management system to manage
Ventures Mexico merchants and process transactions.

CloudWalk is an open payment platform for creating

Coatue Management, DST Global,
Brazil May ’21 // $190M Series B $195M and managing POS, hardware-agnostic payments
FIS, Valor Capital Group, The Hive
apps.

Alkeon Capital Management, Tiger dLocal is a payments platform designed to handle

Apr ’21 // $150M
Uruguay $350M Global Management, D1 Capital mass online payments, operating as the payments
undisclosed
Partners, Bond, General Atlantic processor and merchant of record.

SoftBank Group, Kaszek Ventures, Kushki offers merchants a secure payment

Ecuador Jun ’21 // $86M Series B $86M Dila Capital, Magma Partners, processing service. Platform features are enabled
Conexo through its fully PCI Level I-compliant payment APIs.

49
'PRIVATE IPOS’ ARE NOT THAT COMMON

$100M+ global mega-rounds make up a small

share of total deals

95% Non-
99% 98% 99% 99% 99% 98% 98% 98% 98% 98% 98% 98% 98% 98% 97% 97% 95%
99% 99% 99% mega-rounds

1% 1% 1% 1% 2% 1% 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 5% 5% Mega-rounds
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

50
BUT THESE ‘PRIVATE IPO’ ROUNDS DOMINATE FUNDING

Investors double down on their winners

37% 42% Non-
42% 41%
44%
51% 49% 49% 48%
52%
48% mega-rounds
55% 53% 54% 53%
57% 57% 57% 57% 58%
60%

63% 58% Mega-

58% 59%
56% rounds
49% 51% 51% 52% 52%
48% 47% 46% 47%
43% 43% 43% 43% 45%
40% 42%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021

51
SPEED, CAPITAL AND A LONG-TERM FOCUS ARE A DANGEROUS COCKTAIL

Stripe’s Strategy

Source: CB Insights “Stripe Strategy Map” 52

THE IPO WINDOW IS OPEN

A healthy exit climate begets more financing

April 14, 2021 (began trading) April 14, 2021 (began trading) May 26, 2021 (began trading)
HQ: California, US HQ: Texas, US HQ: Massachusetts, US
IPO valuation: $65.3B IPO valuation: $1.9B IPO valuation: $2.4B
Crypto exchange Coinbase launched its Banking software firm Alkami launched US-based foreign exchange payments
IPO. The company priced its shares at its IPO. The company priced its shares at company Flywire launched its IPO. The
$250 and began trading at $381. $30 and began trading a little over $41. company priced its shares at $24 and
began trading at $34.

June 3, 2021 (began trading) June 9, 2021 (began trading) June 17, 2021 (announced)
HQ: Montevideo, Uruguay HQ: California, US HQ: London, UK
IPO valuation: $6.2B IPO valuation: $14.3B IPO valuation: $11B
Payments platform company dLocal Modern card issuer Marqeta launched its Cross-border payment company Wise,
launched its IPO. The company priced its IPO. The company priced its shares at formerly known as TransferWise,
shares at $21 and began trading at $31— $27 and began trading at $32.50 — announced plans to go public on the
reflecting a $9B valuation. reflecting a $15.2B valuation. London Stock Exchange via direct listing.

Source: select IPOs via CB Insights fintech IPO search 53

ENTREPRENEURS & INVESTORS SQUARELY FOCUSED ON FINTECH

Fintech is the home of the unicorns

Source: CB Insights “The Unicorn Club” Categories are not mutually exclusive and unicorns are classified based on their primary use case 54
The great
unbundling of
financial services
55
So many payments & lending markets to tackle

Source: CB Insights market sizing data (industry analyst consensus estimates) 56

Massive markets in wealth management

Source: CB Insights market sizing data (industry analyst consensus estimates) 57

Insurance has massive markets as well

Source: CB Insights market sizing data (industry analyst consensus estimates) 58

 CEDING SMALL MARKETS TODAY THAT GROW INTO MASSIVE MARKETS

“Your margin TAM obsession is

my opportunity.”
–Jeff Bezos (kinda)

59
Momentum is growing for corporate cards as
fintechs launch unique card offerings

The battle for corporate cards heats up

Brex to Offer Points Redemption for Crypto
April 27, 2021 |
May 12, 2021 |

Airwallex, Visa roll out borderless card for

businesses in Hong Kong
Jun 10, 2021 |

Source: CB Insights — news mentions of “corporate card” AND “fintech” 60

Digital assets crept further into capital
markets, gaining institutional interest
Morgan Stanley Co-Leads $48 Million Investment How Crypto Markets Have Made the Jump to
To Bring Blockchain To Capital Markets Established Asset Class

June 21, 2021 | June 28, 2021 |

Germany Allows 4000 Investment Funds To Invest

In Crypto As Of Today
July 1, 2021 |

Source: CB Insights — news mentions of (“crypto” OR “digital asset” OR “blockchain” OR “bitcoin”) AND “capital markets” 61
Teen-focused challenger banks

Valuation: $2.3B Valuation: $2.2B Financing: $100M Series C in 2021

A smart debit card Collaborative banking for Financial tools for teens &
for kids parents & kids families

More than tripled its YoY 3M+ users. Charges $36/year Grew to 1.5M users in first 6
revenue. 3M children and months of launch through
parents on their platform. social media influencers

Note: Clients interested in learning more can check out our brief on segment-focused banking. 62
BNPL for everything

BNPL for auto dealers, BNPL for wedding BNPL for services
service centers, optical expenses like ride-hailing (Uber),
practices, dentist streaming (Netflix), and
offices. mobile telephony.

Note: Clients can read CB Insights’ market outlook on buy now, pay later (BNPL) here. 63
All-cash offer providers for housing

An online brokerage that Helps people buy Digital lender that helps
helps users buy, sell, or homes faster through users submit an all-cash
trade up homes through alternative financing offer on a home upon
all-cash or guaranteed options such as all-cash qualifying for a
offers. offers. mortgage.

Source: CB Insights “State of Fintech” 64

New alternative investing platforms give
users access to non-traditional asset classes

Access to asset Securitizes unique, A marketplace Allows users to

classes like supply high-value assets for sports card invest in non-
chain financing, such as classic hobbyists to buy, traditional assets
litigation finance, cars, sports sell, and invest in like startups, peer-
multi-family real memorabilia, their favorite to-peer lending,
estate comics athletes small businesses,
and real estate

Source: CB Insights “State of Fintech” 65

Segment-focused money management app

Mobile app for Gen Z Financial services for Helps divorced parents to
that combines banking, unbanked workers, track and manage shared
advice, and education such as first- and second- expenses for their children
in one app. generation immigrants. in a single app.

Source: CB Insights “State of Fintech” 66

 WE’VE SEEN THIS MOVIE BEFORE

“There are only two ways to make

money in business: one is to
bundle; the other is to unbundle.”
– Jim Barksdale, Netscape President & CEO

67
WE IDENTIFIED THIS UNBUNDLING TREND MANY YEARS AGO

From 2015, the original unbundling of the bank

Source: CB Insights, “Unbundling of the Bank” 68

THE MOVE TO UNBUNDLE HAS ONLY INTENSIFIED

Unbundling

Source: CB Insights, “Unbundling of the Bank” 69

Suddenly is here
#CBIFutureFintech
70
 PRETTY SMART COMMENT BY A COMMUNIST

“There are decades where nothing

happens; and there are weeks
where decades happen”
– Vladimir Lenin

71
VALUE OVER TIME

Most valuable financial services firms (2018)

$391B
$345B
$325B
$308B

$257B
$219B
$203B $203B
$182B

$123B $123B $116B $112B $112B

For illustrative purposes only. Market caps as of January 12, 2018. Ant Financial private valuation as of latest financing round. 72
FAST FORWARD TO TODAY

A look at those valuations in 2021

$498B

$363B

$243B
$193B $199B
$180B
$153B $144B $143B
$129B $136B
$109B
$63B $75B

For illustrative purposes only. Market caps as of January 12, 2018. Ant Financial private valuation as of latest financing round. 73
DURING WHAT HAS BEEN A RIDICULOUS BULL MARKET

A look at the winners & losers

Company % Change Company % Change Company % Change

27.4% -50.3% 15.9%

-29.7% -24.5% -45.5%

11.5% -28.9% 21.1%

-37.3% -29.0% -32.8%

-30.1% 61.8%

Market caps as of January 12, 2018 and October 3, 2021 74

INSURGENTS ARE GROWING AT REMARKABLE RATES

Affirm – “It’s a feature, not a company”

$2.0B $2.9B
$115M $518M $800M
$17M

$11.9B $29.6B

2013 2014 2015 2016 2017 2019 2021 October

Series A Series B Series C Series D Series E Series F IPO ‘21

Source: CB Insights private company valuations, Affirm 75

INSURGENTS ARE GROWING AT REMARKABLE RATES

Stripe – The most valuable unicorn

$20.3B $22.5B

$350M $9.2B

$20M $1.75B

$36.0B $95.0B
$100M

2011 2012 2014 2016 2018 2019 2020 2021

Seed Series A, Series C Series D Series E Series F Series G Series H
Series B

Source: CB Insights private company valuations, Stripe 76

INSURGENTS ARE GROWING AT REMARKABLE RATES

Square – “Vastly underperformed at IPO”

$1.6B $6.0B
$3.25B $2.9B
$45M

$103B

$240M

2009 2011 2012 2014 2015 October

Series A Series B, Series D Series E IPO ‘21
Series C

Source: CB Insights private company valuations, Square 77

INSURGENTS ARE GROWING AT REMARKABLE RATES

Coinbase – “Crypto isn’t a real asset class”

$8.0B
$140M
$471M $1.6B

$65.3B
$48.4B

$21.4M

2013 2015 2017 2018 2021 October

Series A, Series C Series D Series E IPO ‘21
Series B

Source: CB Insights private company valuations, Coinbase 78

Technology adoption keeps getting quicker

Source: Michael Felton, The New York Times 79

 NATIVE FINTECH COMPANIES HAVE SCALED TO $50 TO $100B REMARKABLY FAST

The coming
Valuation ($B)
log-scale

Age (years since founding)

log scale

80
WHO DO YOU BET ON? AN INDEX OF FINTECH UNICORNS OR JP MORGAN CHASE?

All 131 global fintech unicorns are worth

~ 1 JP Morgan Chase
Revolut
$33B

Klarna
Stripe
$46B
$95B

Nubank
$30B
Chime
$25B

$499B $516B
131 FINTECH UNICORNS
Graphic inspiration via Chartr 81