Innovate Finance’s 2017 VC FinTech investment landscape provides investors, startups and the wider FinTech ecosystem the data to understand trends and capital flows as the FinTech market evolves. Overall figures suggest that the UK has had its best year on record and was a global leader in terms of capital invested and deal volume, second only to the US.

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2. 2
SUMMARY 03
GLOBAL 06
UK 14
APPENDIX 21
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3. 3
SUMMARY

4. 4

5. 5
THE 2017 FINTECH INVESTMENT LANDSCAPE
SUMMARY
Global
• 2017 saw 1,842 deals globally, attracting $14.2BN of VC investment, a 18% decrease YoY.
• The United States attracted the largest amount of VC investment at $7.0BN over 765 deals, a 22% increase on 2016 deal value of $5.8BN.
• China, which raised the largest amount of VC investment in 2016, dropped to third place with $1.6BN of investment compared with $8.2BN in 2016, a
81% decrease YoY.
• If the 2 China “mega-rounds” (Alipay and JD Finance - each over $1BN) are excluded as “exceptional” from 2016 figures, global investment increased
19.4%.
• SoFi, the online personal finance company based in the United States, raised the largest round globally at $500M during Q1.
• The most active global investor was 500 Startups with 49 investments.
UK
• The UK experienced its best year on record with $1.8BN over 224 deals of VC investment, up 153% on 2016. The UK ranked second globally in total
Capital Invested and Deal Volume, behind the United States.
• Challenger Banks (24%) and Money Transfer & FX (21%) were the top 2 verticals.
• TransferWise, OakNorth, Funding Circle, Interactive Investor and Monzo led the top 5 top UK deals in the range of $90M to $280M of investment.
Both TransfeWise and OakNorth ranked amongst the global top 20 deal list.
• There were 10 Innovate Finance members in the top 20 UK deals.
• 54% of investment into the UK was from non domiciled VCs, largely coming from North America (25%).
Source: PitchBook 19-Jan-18

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GLOBAL

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GLOBAL FINTECH VC INVESTMENT
5 YEAR TREND
2017 has seen 1,824 deals globally attracting $14.2BN of VC investment, a 18% decrease YoY
Source: PitchBook 19-Jan-18
3,420
8,317
17,006 17,437
14,240
1,123
1,632
1,993 2,015
1,824
0
500
1,000
1,500
2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
FY 13 FY 14 FY 15 FY 16 FY 17
DealVolume
CapitalInvested($M)
Capital Invested Deal Volume
-18%

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GLOBAL FINTECH VC INVESTMENT
QUARTERLY ANALYSIS (2016 vs 2017)
The 2 China “mega-rounds” JD Finance ($1.0BN, Q1 16) and Alipay ($4.5BN, Q2 2016) were the main driver behind 2016
being higher than 2017 in terms of Capital Invested
Source: PitchBook 19-Jan-18
4,094
7,270
3,181
2,8923,025 3,275
3,973 3,968
613
493
452 457
594
470
433
327
0
100
200
300
400
500
600
700
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Q1 Q2 Q3 Q4
DealVolume
CapitalInvested($M)
2016 Capital Invested 2017 Capital Invested 2016 Deal Volume 2017 Deal Volume

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GLOBAL FINTECH VC INVESTMENT
DEAL VALUE 2017
U.S.
$7.0bn
Canada
$444m
≥ $500m
$50m - $499m
$10m - $49m
Source: PitchBook 19-Jan-18
$14.2BN Invested Over 1,824 Deals

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GLOBAL FINTECH VC INVESTMENT
DEAL VOLUME 2017
U.S.
765
Canada
63
1,824 Deals in 68 Countries
Source: PitchBook 19-Jan-18
≥ 50
10 - 49
2 - 9

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GLOBAL FINTECH VC INVESTMENT
TOP 10 COUNTRIES (2016 vs 2017)
The United States ranked top, both in Capital Invested ($7BN) and Deal Volume (765)
Top 10 counties by Capital Invested ($M) Top 10 counties by Deal Volume
Source: PitchBook 19-Jan-18
7,053
1,783
1,606
648
548
478
444
331
203
130
5,793
704
8,215
562
178
60
243
417
84
85
United States
United Kingdom
China
India
Hong Kong
Sweden
Canada
Germany
France
Singapore
2017 2016
765
224
120
66
63
47
39
37
37
31
784
232
121
66
66
49
73
53
23
43
United States
United Kingdom
India
Germany
Canada
France
China
Singapore
Switzerland
Australia
2017 2016

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GLOBAL FINTECH VC INVESTMENT
TOP 5 FINTECH VC DEALS
SoFi, an alternative lender in the United States, raised the largest global round of 2017 at $500M
Name SoFi
Country
Sector
Alternative Lending
/ Financing
Date 21-Mar-2017
Series G
Size $500M
Name AvidXchange
Country
Sector Enterprise Software
Date 08-Jun-2017
Series F
Size $300M
Name TransferWise
Country
Sector
Money Transfer &
FX
Date 01-Nov-2017
Series E
Size $280M
Name E-Life Financial
Country
Sector Payments
Date 03-Jan-2017
Series B
Size $275M
Name Kabbage
Country
Sector
Alternative Lending
/ Financing
Date 03-Aug-2017
Series F
Size $250M
Source: PitchBook 19-Jan-18

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GLOBAL FINTECH VC INVESTMENT
TOP DEALS AND INVESTORS
Two UK companies made it into the top 20 global deals. 500 Startups was the most active global investor
Top global deals by capital invested ($M) Most active investors by deal volume
Source: PitchBook 19-Jan-18, most active investors excludes deals without a disclosed deal value
500
300
280
275
250
240
220
203
200
200
200
166
160
146
145
140
130
127
126
130
SoFi (US)
AvidXchange (US)
TransferWise (UK)
E-Life Financial (China)
Kabbage (US)
WeLab Holdings (Kong Kong)
Dianrong (China)
OakNorth (UK)
Affirm (US)
Feidee (China)
Patym (India)
Lightspeed POS (Canada)
Bright Health (US)
Futu (Hong Kong)
Xiaoying Financial (China)
Addepar (US)
Clover Health (US)
iZettle (Sweden)
Bread Operations (US)
Lemonade (US)
UK Deal
49
38
31
21
18
16
13
12
12
12
11
11
11
500 Startups
Y Combinator
Startupbootcamp
Techstars
Ribbit Capital
Digital Currency Group
Anthemis Group
New Enterprise Associates
Index Ventures (UK)
Hard Yaka
Thrive Capital
Social Capital
Accel
HQ in the UK

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UK

15. 15
UK FINTECH VC INVESTMENT
5 YEAR TREND
2017 has seen 224 deals attracting $1.8BN of VC investment, a 153% increase YoY
Source: PitchBook 19-Jan-18
238
684
1,073
704
1,783
107
186
205
232
224
0
50
100
150
200
250
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
FY 13 FY 14 FY 15 FY 16 FY 17
DealVolume
CapitalInvested($M)
Capital Invested Deal Volume
153%

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UK FINTECH VC INVESTMENT
QUARTERLY ANALYSIS (2016 – 2017)
The top two VC rounds, Tranferwise ($280M) and OakNorth ($203M), fell into Q4 2017
Source: PitchBook 19-Jan-18
223
131 127
223
158
434 408
783
75
46
55 56
69 61
47 47
0
10
20
30
40
50
60
70
80
0
100
200
300
400
500
600
700
800
900
Q1 Q2 Q3 Q4
DealVolume
CapitalInvested($M)
2016 Capital Invested 2017 Capital Invested 2016 Deal Volume 2017 Deal Volume

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UK FINTECH VC INVESTMENT
2017 VERTICAL ANALYSIS
Challenger Banks and Money Transfer & FX were the top verticals in 2017, with 24% and 21% of investment deal value
respectively
Source: PitchBook 19-Jan-18
Challenger Banks,
24%
Money Transfer &
FX, 21%
Alternative
Lending /
Financing, 17%
Personal Finance /
Wealth
Management, 11%
Payments, 5%
Enterprise
Software, 5%
Institutional /
Capital Markets,
5%
InsurTech, 3% Prop-Tech, 3%
Crowdfunding, 2%
Cyber, 1%
RegTech, 1%
Digital
Currencies &
Blockchain, 1%

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UK FINTECH VC INVESTMENT
TOP 5 FINTECH VC DEALS
TransferWise and OakNorth Bank both raised rounds above $200M during 2017
Name TransferWise
Sector
Money Transfer &
FX
Date 01-Nov-2017
Series E
Size $280M
Name OakNorth
Sector Challenger Bank
Date 12-Oct-2017
Series Unknown
Size $203M
Name Funding Circle
Sector
Alternative Lending /
Financing
Date 19-Apr-2017
Series F
Size $104M
Name Interactive Investor
Sector
Personal Finance /
Wealth
Management
Date 02-Jun-2017
Series Unknown
Size $101M
Name Monzo
Sector Challenger Banks
Date 07-Nov-2017
Series Unknown
Size $94M
Source: PitchBook 19-Jan-18

19. 280
203
104
101
94
66
53
50
45
41
40
40
36
27
26
25
25
25
25
23
TransferWise
OakNorth
Funding Circle
Interactive Investor
Monzo
Revolut
Salary Finance
Receipt Bank
10x Banking
Zopa
WorldRemit
Prodigy Finance
PremFina
PayBreak
Digital Shadows
Monzo
CurrencyCloud
Kalo
Habito
GoCardless
19
UK FINTECH VC INVESTMENT
TOP DEALS AND INVESTORS
There were 10 Innovate Finance members within the top 20 UK deals. Passion Capital was the UK’s top investor
Top deals by Capital Invested ($M) Most active investors by Deal Volume
Source: PitchBook 19-Jan-18, most active investors excludes deals without a disclosed deal value
7
6
6
5
4
4
4
4
4
4
4
4
4
Passion Capital
Balderton Capital
Anthemis Group
LocalGlobe
Seedcamp
Ribbit Capital
Notion
Illuminate Financial Management
Force Over Mass Capital
Entrepreneur First
Connect Ventures
Barclays Accelerator
Accel

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UK FINTECH VC INVESTMENT
2017 INVESTOR HQ ANALYSIS
54% of VC investment into the UK led by non domicilied VCs, with the majority coming from North America (25%)
Source: PitchBook 19-Jan-18, analysis performed on deal volume only
North America,
25%
United
Kingdom, 46%
Europe, 14%
Unknown, 6%
Asia, 6%
Africa, 1% Russia, 1%
Middle East,
1%

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APPENDIX

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THE 2017 FINTECH INVESTMENT LANDSCAPE
APPENDIX 1: VERTICAL GLOSSARY
§ Alternative Lending / Financing – P2P lending, invoice financing, SME financing, e-lending platforms, credit scoring
§ Institutional / Capital Markets – B2B solutions for financial institutions (e.g. banks, hedge funds and other institutional investors) including innovations
within capital market activities
§ Challenger Banks – new digital banks that are challenging the large established High Street banks
§ Crowdfunding – platforms that allow investment for projects / companies / equity
§ Cyber Security - technology designed to protect companies infrastructure from attack, damage or unauthorised access
§ Data & Analytics – analysis of data within the financial industry to support data driven decisions
§ Digital Currencies & Blockchain – digital ledger technology, in which transactions made in bitcoin or digital currency are recorded chronologically and
publicly
§ Enterprise Software – financial software solutions for enterprises
§ Financial Inclusion – delivery of financial services to the unbanked / unbankable
§ InsurTech – technology applied to the insurance industry
§ Money Transfer & FX – money transfer, international remittance & currency conversion
§ Payments – innovation in payments, including cashless, online / ecommerce, mobile, B2B, merchant / POS, wallets, P2P, recurring
§ RegTech – technology applied to resolve issues regarding regulation within the financial industry
§ Personal Finance / Wealth Management – innovation within pensions, savings, personal financial management, investment platforms and
management of personal assets and investments (e.g. robo-advisors)
§ Prop-tech – technology used to disrupt the property industry, including mortgages and investment
Source: PitchBook 19-Jan-18

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THE 2017 FINTECH INVESTMENT LANDSCAPE
APPENDIX 2: SCOPE OF REPORT DATA
§ VC deal value figures include the deal types:
- Angel
- Accelerator / incubator
- Crowdfunding
- VC (all rounds)
§ VC deal value figures include all deals completed or announced (verified to press releases) in 2017
§ Deal volume figures include deals without a disclosed deal value, except when looking at top investors
§ UK VC deal value represents investment into FinTech companies which are Head Quartered in the UK
Source: PitchBook 19-Jan-18

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Author
Sophie Winwood
Head of Partnerships
sophie@innovatefinance.com