STATUS OF THE CANADIAN FINTECH LANDSCAPE (and beyond) David Nault Co-Founder, General Partner
Every category of financial services is being re-imagined 2
by nimble teams using modern technology
New Canadian Fintech Companies On the Rise Vertical Vertical 100 Share Payments 13% Blockchain & Crypto 13% Lending & Mortgage 13% Insurance Tech 10% Wealth Tech 10% Personal Finance 7% Digital Banking & Infrastructure 6% 59% of fintechs are in Capital Markets 5% the top five verticals Other 23% 4 Source: Luge Capital, Crunchbase & AngelList (2018)
More than 600 Fintech Companies in Canada 600+ 4 000+ 1 600+ Fintechs Fintechs Fintechs 5 Source: Luge Capital (2018), Crunchbase, Hockeystick, AngelList, EY Report
FinTech Funding Across Canada Where Investors are Betting on Fintech
$600M Canadian Fintech Venture Investments in 2018 75 new Investments ~ $500M invested to date in 59 2018 and projected to reach $600M by end of 2018 72 As of Q3: $500M 31 19 Note: In 2017, three companies raised an aggregate $244M Estimated 7 Source: Luge Capital, Crunchbase, AngelList & CVCA
In 2018, U.S. Investors Invested ~20x More Capital Compared to Canada ~ C$10B by end of 2018 As of Q2: $6.7B Fintech venture investments in the U.S. reached ~ C$6.7B in the first half of 2018 8 Source: KPMG Pulse of Fintech H1 2018 Report
Global Fintech Investments Tops $39B in 2018 Annual Global Deals and Financing, 2014-2018 ($B) CB-Insights_Fintech-Trends-2019
Canadian Fintech Investments of $1.7B+ Since 2014 # of Investments $ Invested by Stage by Stage 7.7% 10.8% 7.7% 29.8% Pre-Seed and Seed Series A 170+ $1.7B+ 21.0% 33.4% companies Series B 63.5% Series B+ 26.0% 10 Source: Luge Capital and Crunchbase (2018)
Canadian Fintech Investors Other investors with investments in FinTech : ~ 4B+ FinTech focused investors: ~$600M+ Source: CVCA and Reseau Capital
Notable Fintech Financing in 2018 Series B Seed Series A $62M $23M $8M $3M $2.5M $25.8M $14.3M $14M $36M $12M $8.4M $9M $2.3M $2.25M $1.75M $12M $6.6M $6.5M $1.1M $1M $1M $10.1M $600K $400K+ $5.4M $975K $57.8M $105.2M $153.6M 12 Source: Crunchbase, CVCA
Fintech M&A in 2017-2018 of Over $5.8B + $100M + $4.8B + $200M+* $400M+ + + $70M + Undisclosed + $302M + Undisclosed** * Estimated ** Majority stake acquired 13 Source: CVCA
FIs Supporting the Fintech Ecosystem Digital Garage and Insurtech Accelerator Ventures program Ventures FinTech Accelerator program 14
Recent Incumbent + Fintech Partnership Examples 15
Canadian Fintech Ecosystem Collaboration Adapting our regulatory environment AMF Fin CSA Regulatory Tech Lab Sandbox Guide Unite Create Creating support for entrepreneurs Increasing capital for fintechs Support Collaborate Animating the fintech ecosystem FinTech Summit
How is fintech being applied? 17
Credit Scoring: • $368M in funding >$500M revenue • • 700 employees Money Remittance: Consumer/ POS Lending: • $4 billion/ month 4M customers • 40% of all e-commerce sales in Sweden • $8 million in profit • • 2000 employees Funded $21 billion in online sales • Data Aggregation/ Credit score Used by >115 • Fintechs
Process Automation: Accounting Automation + AI: • AI and ML to reduce manual $25M in funding • processes Reinventing Banking: • 300 employees • $50M in funding Used by > 1,000 • • 3 years old. $1.7B valuation 3M accounts • $250M in funding • • 630 employees Accounts payable/ receivable automation
600M 400M users users => Ant Financial leads the development of the first financial blockchain standard for IEEE
“Dear finance professionals… the times, they are a changing…”
You will want to understand how technology can be used, so that you can apply it to your • job and be part of this transformation process. Automation will significantly reduce administrative tasks. You will continue to have an • important role in the relationship with clients, but will be increasingly assisted by more digital tools. • As alternate currencies and blockchain technologies become increasingly integrated into the finance industry, there will be a greater need for roles in security fields like encryption, identity protection, risk and compliance. Roles will require personnel having strong soft skills — like personal attention and empathy • — that cannot be replicated (yet!) by machines Finance professionals will need to train fintech software and work on more complex or • strategic issues. Fintechs need professionals that understand financials services are in-demand • 22
About Luge Capital: $75 Million Fund Investing in early-stage fintech companies and AI solutions applied to financial services Our investors and partners: Our areas of interest: 23
Building Fintech Champions Thank you / Merci @LugeCapital www.luge.vc Read our blog that summarizes this presentation. No part of this document may be reproduced without the prior written permission of Luge Capital.
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