Boston Fintech Week - Day 1
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This document provides an agenda and background information for a Fintech Bootcamp being held in Boston, MA from 2019-2023. The 4-day bootcamp will be presented by Sri Krishnamurthy, founder and CEO of QuantUniversity, and will cover topics like quantitative methods, data science, big data, and Fintech. Day 1 will include keynotes and an overview of Fintech. Future days will cover the agendas, case studies, and presentations. The document also includes an investment banking report on trends in the Fintech sector like funding amounts, valuations of companies, and notable acquisitions and mergers.
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Boston Fintech Week - Day 1
- 1. Location: Boston Fintech Week 2019 Babson College Boston, MA Fintech Bootcamp Day 1 2019 Copyright QuantUniversity LLC. Presented By: Sri Krishnamurthy, CFA, CAP sri@quantuniversity.com www.analyticscertificate.com
- 2. 2 QuantUniversity • Analytics and Fintech Advisory • Trained more than 1000 students in Quantitative methods, Data Science and Big Data & Fintech • Programs ▫ Analytics Certificate Program ▫ Fintech Certification program • Building
- 3. • Founder of QuantUniversity LLC. and www.analyticscertificate.com • Advisory and Consultancy for Financial Analytics • Prior Experience at MathWorks, Citigroup and Endeca and 25+ financial services and energy customers. • Regular Columnist for the Wilmott Magazine • Author of forthcoming book “Financial Modeling: A case study approach” published by Wiley • Charted Financial Analyst and Certified Analytics Professional • Teaches Analytics in the Babson College and at Northeastern University, Boston Sri Krishnamurthy Founder and CEO 3
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- 5. 5 Agenda – Day 1
- 6. 6 Agenda – Day 2
- 7. 7 Agenda – Day 3
- 8. 8 Agenda – Day 4
- 9. 9 Keynote
- 10. 40 WALL STREET, NEW YORK, NY www.rblt.com Spotlight On FinTech September 2019 Rosenblatt FinTech Investment Banking
- 11. www.rblt.comwww.rblt.com Six Key Insights From The Frontline 11 FinTech funding is still robust, but slowing down §2019 projected funding could be 1/3rd lower than 2018 §Spending has grown at CAGR of 40% during 2014-2018 Major global FinTech trends are: §US has regained its global FinTech leadership §India eclipsed China in deal activity and attracted $350M vs $375 for China §Led by Brazil’s NuBank ($400M), LatAm became the 2nd hottest sector globally We mustn’t paint FinTech with a broad brush. Each sector reveals a different story §Insurance woke up late but is catching up and still seeing robust Series A activity §Lending and Payments are mature §Capital Markets and Wealth Management are hanging in there There’s risk of a private market slowdown §Prominent IPOs (Uber/Lyft) doing badly and Unicorns in the pipeline facing trouble (WeWorks) could change the narrative §There are clear signs of a frothy market: massive funding, sky rocketing valuations, lower investing standards M&A acquirers are multiplying in number and variety: PEs, Strategics, Tech firms, even Telcos §Financial institutions are biggest buyers of InsurTechs while exits in other sectors are driven by IPOs and PE buy-outs Of 394 Unicorns, 48 are FinTechs §US churns out the most Unicorns (28) §9 Unicorns were born in 2019 alone §Investors are doubling down on Unicorns: the top 10 deals were $200M+ rounds 1 4 6 3 2 5
- 12. www.rblt.comwww.rblt.com $13B $20B $23B $22B $48B $16B $0B $10B $20B $30B $40B $50B $60B 2014 2015 2016 2017 2018 2019e DealValue1 Funding Continues, But Signs of A Slowdown? 12 U S C a p i ta l R a i s e (CY’18 – Q2’19) CAGR: 40% Largest Capital Raise Company Select Investor 1,220 $250M Series B $1.3B Pre-Money 1,602 $1,000M Series F $2.6B Pre-Money 1,832 $1,200M PE Growth $17.3B Pre-Money 2,024 $2,200M Series A Undisclosed 2,298 $14,000M Series C $136B Pre-Money 941 $500M Series E Undisclosed Deals (w/ Reported $ Value) 2H’2019 (Annualized)1H’2019 (Actual) 1 – Represents Equity Capital only (All VC rounds and PE(Growth Equity)) Source – RBLT analysis, Pitchbook, FactSet, CrunchBase, CB Insights, other industry sources # of Companies (CY’14 – Q2’19) > 11,000 # of Deals (w/ Reported $ Value) (CY’14 – Q2’19) > 14,400 Total Deal Value (w/ Reported $ Value) (CY’14 – Q2’19) > $142B Unicorns Created (w/ Reported Valuation) (CY’14 – Q2’19) > 50 ↑ 56% ↑ 20% ↓ 5% ↑ 118% ↓ 32%($) % ∆ YoY $16B
- 13. www.rblt.comwww.rblt.com $12M, $40M, $1,931M $16M, $70M, $1,858M $15M, $47M, $2,867M $14M, $50M, $3,410M $20M, $77M, $2,582M $20M, $78M, $1,585M $30M $40M $50M $60M $70M $80M $90M $10M $12M $14M $16M $18M $20M MedianValuation(Pre-Money) Median Capital Raise Unpacking FinTech Reveals A Varied Picture Across Sectors 13 44 54 Capital Markets 37 51 Personal Finance & Invest’ Mgmt. 33 50 Institutional SW Solutions 57 83 Lending & Credit Company Count Deal Count 48 75 InsurTech R e l a t i v e Va l u a t i o n a n d C a p i t a l I n f l o w B y S e c t o r | (United States | CY’18 – Q2’19) KEY: Median Capital Raise, Median Valuation, Total Capital Invested Note: Relative size of bubble represents “Total Capital Invested” | Median #’s drawn from VC activity across all series and PE (growth equity) Source – RBLT analysis, Pitchbook, FactSet, CrunchBase, CB Insights, other industry sources Capital Markets 36 60 Payments Lending & Credit InsurTech Institutional SW Solutions Payments Personal Finance & Investment Mgmt.
- 14. www.rblt.comwww.rblt.com 14 Please Contact Us To Discuss More: V i ka s S h a h M D , I n v e s t m e n t B a n k i n g 2 1 2 - 6 0 7 - 3 1 0 0 v s h a h @ r b l t . c o m Dus hyant “D” Shahrawat D i r e c t o r, I n v e s t m e n t B a n k i n g 2 1 2 - 6 0 7 - 3 1 8 0 d s h a h r a w a t @ r b l t . c o m Copyright 2019. Rosenblatt Securities Inc. All rights reserved. Rosenblatt Securities Inc. seeks to provide and receive remuneration for Agency Brokerage, Market Structure Analysis, Macro and other Sector Analysis and Investment Banking Advisory Services. Rosenblatt Securities Inc. may, from time to time, provide these services to companies mentioned in this analysis. This material is not a research report and should not be construed as such, and does not contain enough information to support an investment decision. Neither the information contained herein, nor any opinion expressed herein, constitutes the recommendation or solicitation of the purchase or sale of any securities or commodities. The information herein was obtained from sources which Rosenblatt Securities Inc. believes reliable, but we do not guarantee its accuracy. No part of this material may be duplicated in any form by any means. Member NYSE, FINRA, SIPC.
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- 16. 16 • Municipal bonds are bonds issued by State and Local governments to meet their financial needs. My First Fintech experience!
- 17. 17 Muni Bid-Wanted Auction Fidelity JP Morgan BOA Citi Trader 1 Trader 2 Trader 3 Muni bond auction in action (2005)
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- 19. 19 “Financial Technologies or “Fintech” is used to describe a variety of innovative business models and emerging technologies that have the potential to transform the financial services industry ” What is Fintech? https://www.iosco.org/library/pubdocs/pdf/IOSCOPD554.pdf
- 20. 20 Automation in products or services delivered through the use of the internet. Unbundling of different financial services traditionally offered by service providers like banks and investment managers. Examples: • Equity crowdfunding platforms intermediate share placements • Peer-to-peer lending platforms intermediate or sell loans • Robo-advisers providing automated investment advice • Brokerage and investing services through social trading platforms Innovative business models Ref: https://www.iosco.org/library/pubdocs/pdf/IOSCOPD554.pdf
- 21. Drivers • Generational shift ▫ Millennials & Gen Zs more open to newer mediums and technologies • Technology growth ▫ Mobile ▫ Internet ▫ Computing power • Broader accessibility and decreasing cost of products and services • Increasing disintermediation and re- intermediation
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- 31. 31 Social media and Sentiment analysis https://www.iosco.org/library/pubdocs/pdf/IOSCOPD554.pdf
- 33. 33 Source: Finra Digital Advice report 2016 https://www.finra.org/sites/default/files/digital-investment- advice-report.pdf
- 34. 34 Which one to choose? https://www.finra.org/sites/default/files/digital-investment- advice-report.pdf
- 37. 37
- 39. 39 Blockchain in the news
- 45. 45 • A blockchain is a continuously growing list of records called blocks, which are linked and secured using cryptography. • It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. • https://coincenter.org/entry/what-is-blockchain-anyway What is Blockchain?
- 46. 46 What is Blockchain? https://www.cbinsights.com/research/ what-is-blockchain-technology/ Blockchains can be used in applications requiring: • Contracts • Certificate of Ownership • Statement of authenticity • Proof of a bank's financial transaction
- 47. 47 Fact 1: Bitcoin is not equal to Blockchain! https://www.sciencedirect.com/science/article/pii/S07365853 18306324
- 48. 48 Fact 2: Blockchain discussions today are like talking about the internet in the early 1990s • Everyone’s talking about bitcoin. But the killer applications are yet to see the light of day.
- 49. 49 Fact 3: Blockchain is in a hype cycle • A recent study by Deloitte, 92% of the 26,000 blockchain-based projects that have been created over the last two years are now dead. https://www2.deloitte.com/insights/u s/en/industry/financial- services/evolution-of-blockchain- github-platform.html
- 50. 50 Fact 4: Blockchain will be transformational in powering Web 3.0 https://blockchainhub.net/web3- decentralized-web/ https://www.pcmag.com/article/351486/block chain-the-invisible-technology-thats-changing- the-wor • Blockchain can bring us true P2P transactions without a middleman. • Blockchain-based networks, decentralized apps (DApps), and distributed ledgers are becoming the foundation of much of your digital life.
- 51. 51 Fact 5: Blockchain will replace many traditional business models https://cointelegraph.com/news/evolve-or-perish-say- bain-company-to-banks-on-using-bitcoin-blockchain https://www.bloomberg.com/news/articles/2018-02- 16/banks-replaced-with-blockchain-at-international- food-program • Blockchain based businesses will disintermediate many services and make certain market players redundant. • Many businesses of today must evolve or perish
- 52. 52 Case study 1: Global food supply chain • Identify where a food product came from in about 2.5 seconds - down from six days before its history was tracked on a blockchain From <https://www.coindesk.com/ibm-wants-know-ways-blockchain-can-go-wrong/>
- 53. 53 Case study 2 : Trucking industry https://www.freightwaves.com/blockchain/
- 54. 54 Case study 3: Flight insurance Blockchain technology could run a flight- insurance business without any employees https://spectrum.ieee.org/computing/net works/how-smart-contracts-work
- 55. 55 Case study 4: Trading and Settlement https://www2.deloitte.com/ch/en/p ages/innovation/articles/the- blockchain-revolution.html https://www.bis.org/cpmi/publ/d157.pdf
- 56. 56 Case study 5: Blockchain in Healthcare https://www.hyperledger.org/wp- content/uploads/2016/10/ey-blockchain-in-health.pdf
- 57. 57 Case study 6: Predictive maintenance and tracking parts https://blogs.sap.com/2017/09/09/digital-twin-implementation/
- 58. 58 Case study 6: Fund raising https://www.forbes.com/sites/eidoo/2017/11/17/crypto- startups-managing-icos-and-fundraising-on-the- blockchain/#79cd5b046025
- 59. 59 Case study 8: Digital Asset management & Tackling software piracy http://europa.eu/rapid/press-release_MEMO-17-4943_en.htm
- 61. Thank you! Presentations & Day 2 updates will be posted here: https://quantuniversitycrashcourse.splashthat.com/ Sri Krishnamurthy, CFA, CAP Founder and CEO QuantUniversity LLC. srikrishnamurthy www.QuantUniversity.com Information, data and drawings embodied in this presentation are strictly a property of QuantUniversity LLC. and shall not be distributed or used in any other publication without the prior written consent of QuantUniversity LLC. 61