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Disruption in Financial Services?
A Silicon Valley Perspective
May 2016
NEA is the Largest VC Firm in the World
 Founded in 1978
 $16.8 billion in committed capital across 15 funds
 Currently investing out of $3.1 billion NEA 15, the largest VC fund ever raised
 Global presence: Menlo Park, CA; Chevy Chase, MD; Shanghai & Beijing, China;
and Mumbai, India
 500+ funded companies
 200+ IPOs and >300 M&A exits since inception
 20 IPOs in 2014 and 2015
Our Partners Build Transformational Companies
Why does the world favor disruptors?
VS
5
Innovators are Riding
Multiple Waves…
The 4 Major Pillars of Financial Services Disruption
Millennial
Behavior
New
Platforms
Big
Data
Favorable
Regulation
The “Unbundling” of Financial Services
Sources: Tom Loverro and Plaid
8
© 2016 NEA CONFIDENTIAL
Genius or Insanity?
Disruption is a Leap
of Faith…
Source: CB Insights
2.1 2.4 2.8
6.7
13.8
298
397
484
587
653
2011 2012 2013 2014 2015
Annual Global FinTech Financing
VC-Backed FinTech Investment ($Bn) VC-Backed FinTech Deals
>$25 Billion in VC Investment in FinTech in 5 Years
How is P&C Insurance Changing?
Car Insurance By the Mile, 100% Mobile Distribution
How is Asset Management Changing?
100% Mobile, Free Trading, No Customer Acquisition Cost
Over $2B in
transactions in
12 months!
Data First Health Plans, Personalized for Self Insured Companies
How is Health Insurance Changing?
The ACA will force
~300,000
businesses to
self-insure…
How is Banking Changing?
>7 Billion
transactions
collected in
18 months!
Any App to Any Bank, One Platform
Key Considerations for Evaluating Disruptors
 What are their core competitive advantages?
- Technology? Regulation? User experience?
 What segment of the market are they attacking?
- Is it an unprofitable niche or disruptive innovation?
 When will they impact your core business?
- Can you afford to ignore them now?
Understand Your “Existential” Threat
Modernize Distribution Across Channels
Old Salesforce Modern Reps
VS
Embrace New Technology to Compete
Archaic Technology Modern IT
VS
Partner with Best-of-Breed Vendors
Thank you!
jsakoda@nea.com
@jonsakoda

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Disruption in Financial Services? A Silicon Valley Perspective

  • 1. Disruption in Financial Services? A Silicon Valley Perspective May 2016
  • 2. NEA is the Largest VC Firm in the World  Founded in 1978  $16.8 billion in committed capital across 15 funds  Currently investing out of $3.1 billion NEA 15, the largest VC fund ever raised  Global presence: Menlo Park, CA; Chevy Chase, MD; Shanghai & Beijing, China; and Mumbai, India  500+ funded companies  200+ IPOs and >300 M&A exits since inception  20 IPOs in 2014 and 2015
  • 3. Our Partners Build Transformational Companies
  • 4. Why does the world favor disruptors? VS
  • 6. The 4 Major Pillars of Financial Services Disruption Millennial Behavior New Platforms Big Data Favorable Regulation
  • 7. The “Unbundling” of Financial Services Sources: Tom Loverro and Plaid
  • 8. 8 © 2016 NEA CONFIDENTIAL Genius or Insanity? Disruption is a Leap of Faith…
  • 9. Source: CB Insights 2.1 2.4 2.8 6.7 13.8 298 397 484 587 653 2011 2012 2013 2014 2015 Annual Global FinTech Financing VC-Backed FinTech Investment ($Bn) VC-Backed FinTech Deals >$25 Billion in VC Investment in FinTech in 5 Years
  • 10. How is P&C Insurance Changing? Car Insurance By the Mile, 100% Mobile Distribution
  • 11. How is Asset Management Changing? 100% Mobile, Free Trading, No Customer Acquisition Cost Over $2B in transactions in 12 months!
  • 12. Data First Health Plans, Personalized for Self Insured Companies How is Health Insurance Changing? The ACA will force ~300,000 businesses to self-insure…
  • 13. How is Banking Changing? >7 Billion transactions collected in 18 months! Any App to Any Bank, One Platform
  • 14. Key Considerations for Evaluating Disruptors  What are their core competitive advantages? - Technology? Regulation? User experience?  What segment of the market are they attacking? - Is it an unprofitable niche or disruptive innovation?  When will they impact your core business? - Can you afford to ignore them now?
  • 16. Modernize Distribution Across Channels Old Salesforce Modern Reps VS
  • 17. Embrace New Technology to Compete Archaic Technology Modern IT VS