GP_Bullhound-2021年第一季度金融科技报告（英文）-2021.5-24页_14mb

Fintech Sector Update Q1 2021 Summary

Core Content

Q1 2021 marked a significant surge in fintech deal-making and fundraising activity, with the total amount raised reaching a record high of $25.5bn. This reflects a continued trend of digital transformation in the financial sector, accelerated by the impact of the pandemic and strong performance by fintech companies.

Main Points

Record Deal-Making Activity

• Deal Value: Fintech M&A activity reached a record $71bn in Q1 2021, a significant increase from $25.6bn in Q1 2020.
• Deal Size: The average deal size increased from $42m in Q4 2020 to $57m in Q1 2021.
• Drivers: The growth is driven by the rise of Special Purpose Acquisition Companies (SPACs) and large private rounds, such as those by Robinhood ($3.4bn) and Klarna ($1.3bn).
• Key Acquisitions: Notable acquisitions include eToro ($9.6bn), Hippo ($1.2bn), Metromile ($956m), Bakkt ($2.1bn), and SoFi ($8.7bn).

Fintech's Role in Capital Markets

• Fintech is now playing a key role in the disruption of capital markets, offering solutions for front-, middle-, and back-office challenges.
• Financial institutions are integrating AI and machine learning into their investment processes, enabling more agile and tailored solutions.
• Key M&A deals in the sector include the $2.5bn acquisition of Itiviti by Broadridge and the $3.7bn acquisition of Calypso by Thomas Bravo.

Bitcoin and Crypto Investments

• Bitcoin's price surged from $7k in late 2019 to over $60k by March 2021, making it a potential alternative to gold in times of financial uncertainty.
• Institutional interest in Bitcoin is growing, with increased investment in crypto start-ups both in public and private markets.
• Examples of significant investments include Chainalysis ($100m from Paradigm Capital) and Blockchain.com ($300m in March 2021).

GP Bullhound's Fintech Activity

• Investments: GP Bullhound made several investments in Q1 2021, including in Updraft, Finary, and others.
• Acquisitions: The firm acquired companies such as 21grams, motif, and others.
• Fintech Index: The fintech index saw a significant increase in value, with a $12.6bn rise in Q1 2021, compared to a $123bn rise in Q4 2020.

Key Information

Valuation Trends

• As of 31 March 2021, the fintech index is trading at 18.6x trailing 12-month revenues, which is 21% above the 3-year average.
• The index is also trading at 17.6x next 12-month revenues, 25% above the 3-year average.

Investment Highlights

• Public Market Deals: eToro went public via a SPAC, valued at $10.4bn, and Coinbase is set for a direct listing.
• Private Market Deals: Fireblocks raised $133m in March 2021, and Blockchain.com raised $300m, valuing the company at $5.2bn.
• SPAC Activity in Europe: European SPACs are gaining traction, with Lakestar raising $275m in February 2021 and European Fintech IPO Company BV raising €415m in Amsterdam.

Performance and Growth

• The fintech index experienced a significant increase in value, driven by strong performance in the payments and lending sectors.
• Payments and lenders were the primary drivers of growth, with notable companies like PayPal, Stripe, and Checkout.com seeing substantial revenue and EBITDA growth.

Emerging Trends

• The focus is shifting towards embedded finance and open banking, with fintech platforms offering services in trading, wealth management, saving, credit, and lending.
• The rise of SPACs is expected to continue, especially in sectors related to the cashless society, open banking, and crypto.

Summary Table of Key Deals

Summary Table of Key Fundraising

Conclusion

Q1 2021 was a record-breaking quarter for fintech deal-making and fundraising, driven by SPACs and large private rounds. The sector is evolving rapidly, with fintech playing a pivotal role in the transformation of capital markets and the rise of digital financial services. Bitcoin and crypto are gaining traction as alternatives to traditional assets, and European SPACs are emerging as a key player in the fintech space.