Peel Hunt Annual Investment Companies Conference November 2019
Video The fintech investment opportunity 2
Disclaimer This presentation has been prepared by Augmentum Fintech Management Limited (“Augmentum”), accepts any responsibility or liability whatsoever for any loss howsoever arising from any use of this which is authorised and regulated by the United Kingdom Financial Conduct Authority, for document or its contents or otherwise arising in connection therewith. information and discussion purposes only and should not be considered to be an offer or solicitation In preparing this presentation, Augmentum has relied upon and assumed, without independent of an offer to buy or sell shares in the capital of Augmentum Fintech plc (the “Company”). In verification, the accuracy and completeness of all information available from public sources or which particular, this document does not constitute an offer to sell, or the solicitation of an offer to acquire was otherwise reviewed by Augmentum. 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Fintech is transforming the global financial services landscape (1) 4
Fintech is transforming the global financial services landscape (2) Global fintech adoption is …along with investment. The opportunity is significant rising, led by the UK… Source: McKinsey Global Banking Annual Review 2018; McKinsey Beyond Banking 2019; McKinsey 2019 Global Insurance Source: CB Insights Source: EY Global FinTech Adoption Index 2019 5
The value of European fintech dwarfs other sectors Key European fintech deal highlights Total value of European $1bn+ exits since 2013 $8.3bn Valuation at IPO $230m Series A raise $175m Series D raise $2.2bn Acquisition by PayPal Source: Dealroom.co. Data combines value of realized $1bn+ exits and current unrealized $1bn+ startups 6
The European tech ecosystem has evolved significantly in recent years vs Now 5 years ago 22 99 $1bn+ companies Before 2015 2019 $34bn $113bn Capital invested 2010-2014 2015-2019 10% 21% % of rounds with 1+ US or Asian investor 2014 2019 76 148 Exits >$100m 2010-2014 2015-2019 Source: Atomico State of European Tech 2019 7
Europe’s technology talent is highly competitive on a global scale …despite significantly lower levels of venture capital investment per capita compared to the US US Europe 6.1m 4.3m # Professional coders Graduating STEM 59k 28k PhDs Global top 100 AI 32 30 institutions € 30 $250 VC per capita Source: Atomico The State of European Tech 2019 8
The UK’s unique position means it is a £16bn global fintech leader Investment activity in the UK (inc. VC, PE, CVC and M&A) 1,600+ reached £16bn in 2018), more than half of the £29bn from across Europe and over 20% of Fintech companies in the global activity the UK. This figure is expected to double by 2030 Financial services heritage $3.3bn 82% VC, PE and CVC investments into UK …of incumbents fintech in 2018 Technology talent expect to increase fintech partnerships in the next 3-5 years Regulatory environment £6.6bn Revenue generated by UK fintech companies (2019) Sources: UK FinTech State of the Nation Report 2019 9
Public markets face an existential crisis if de-equitisation continues The trend is towards the bulk of a company’s value being generated prior to public exit Time to liquidity IPO valuation ($Bn) Current Valuation ($Bn) Public Return Past… 3 $0.4 $851.8 1983x 5 $0.3 $117.1 378x 3 $0.7 $31.7 44x Present… 8 $81.2 $513.1 6x 10 $82.4 $46.1 0.5x 12 $8.3 $19.7 2x 10
Augmentum Fintech plc The UK’s only publicly listed fintech fund 11
What differentiates Augmentum? Listed structure Sector specialists European focus with UK bias Patient capital Access to the most exciting deals We invest in Europe, where the • • • Extensive network fintech opportunity is still in its o IRR driven • Proactive sourcing of deals nascency o Liquidity in VC investing • High conversion rate o … and is being driven by the UK • Ability to scale capital rapidly • Deep sector knowledge • We target post-seed fintechs and • We can cut through the noise o Self-sustaining at scale • leverage our permanent capital to Expertise across a variety of o Opens an emerging and hard to • follow-through all the way to exit sub-sectors access asset class for institutional A team of operators • and retail investors 80 years experience as tech o Provides indirect exposure to • entrepreneurs and tech public markets for portfolio investors companies Engaged investors, typically o with board oversight across each investee company 12
Europe over-indexes on early stage investment We are addressing the equity gap Venture capital invested by stage ($bn), 2018 Number of closed deals, 2018 $8.7B $31.5B 2,379 825 100% 100% 5% Series D+ Late VC 13% Series C 10% 31% 12% Series B Series D+ 15% 22% Early VC Late VC 23% Series A 19% Series C 31% 20% Series B 63% 55% Early VC 28% Angel/Seed 22% Series A 13% 8% Angel/Seed Europe USA Europe USA Source: KPMG Venture Pulse 2019 13
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