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/ Silicon Valley FinTech/InsurTech
Presentation to ICICILombard December 2, 2016
Mike Sigal EIR & PARTNERSHIPS [email protected]
*Please Do Not Distribute
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Historically, winners are rare • 1-2% return 50-100x+ (“Unicorns”) • 5-7% return 10x-50x (“Centaurs”) • 10-20% return 3-5x • 65-70% return 0-1x
Early indicators are clear if you know the KPIs Talent & Opportunity is distributed globally
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/ / Most Active Seed Investor in the World since 2010
$250M+ AUM
1700+ Investments
50 Countries
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The title “Partner” is used in accordance with customary business practice in the venture capital industry and does not indicate a legal status as a “partner” in a partnership. Headcount includes employees, interns, and contractors as of May 31, 2016.
Dave McClure Christine Tsai FOUNDING PARTNER FOUNDING PARTNER
Khailee Ng MANAGING PARTNER
Bedy Yang MANAGING PARTNER
SOUTHEAST ASIA LATIN AMERICA
500 Startups Management & Investment Partners
130 people, 18 countries
Hasan Haider MIDDLE EAST
Santiago Zavala LATIN AMERICA
Rui Ma CHINA/SF
Marvin Liao SF
Elizabeth Yin SILICON VALLEY
Edith Yeung SF
Sean Percival NORDICS
Tim Chae SOUTH KOREA
James Riney JAPAN
Sheel Mohnot SF
Pankaj Jain NYC/INDIA
Matt Lerner UK
Krating Poonpol THAILAND
Natavudh Moo Pungcharoenpong
THAILAND
Binh Tran VIETNAM
Rina Onur ISTANBUL
Mat Johnson SF
Eddie Thai VIETNAM
SILICON VALLEY GLOBAL / SILICON VALLEY 25 yrs in SV as
entrepreneur + investor Early Googler, strong
operational experience Founded and exited two
startups Recognized by Forbes as a
multi-lingual, startup community leader
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/ / 4 Unicorns ($1B+ in valuation)
30+ Centaurs ($100M ~ $999M in valuation) * indicates companies that have already exited
A Selection of Current Portfolio Wins
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Companies are a select sampling of investments across 500 Startups funds and will not be held in Fund IV. While Fund IV has not invested in the rounds of financing shown on this slide, at least one 500 Startups fund has invested in one or more rounds of financing for each of these companies. The valuations listed herein are estimated as at 12/31/2015 based on 500 Startups Valuation Policy as set out in the Appendix to this presentation. These numbers provide a snapshot of estimated valuation as at a particular time and may change. Further detail with regard to financing of companies listed on this slide can be found on Crunchbase.
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/ How We Deploy Capital
General Investment Strategy of All Funds • $50-150K First Check, $150-500K Follow On Checks
Selection Criteria – Data-Driven Process Based on Pre-defined Metrics • Functional prototype (or previous product success) that solves a specific customer problem • Scalable internet-based distribution (search, social, mobile) or proven ability to scale sales • Capital-efficient business; operational at less than $1M in external financing • Measurable traction: engaged users, some revenue, and attractive unit economics • Cross-functional team with design, engineering and marketing expertise
Investment strategy and criteria represent current investment model and may vary at the discretion of the 500 FinTech general partner. Terms noted on this slide may vary by investment.
Accelerator
Seed
Distro
Follow-On
Angel Pre-Seed Seed Post-Seed Series A/B Growth
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/ 500 Startups Family of Funds
Global Funds Fund IV – Flagship 500 Mobile Collective 500 Fintech
Regional Funds 500 Canada 500 Falcons (MENA) 500 Istanbul (Turkey) 500 Kulfi (India) 500 Kimchi (Korea) 500 TukTuks (Thailand) 500 Startups JP (Japan) 500 Startups Vietnam
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/ World-class Accelerator is a critical success factor
Accelerator Overview • 4-month program in Silicon Valley (4 cohorts / year) • $150K investment for 6% equity • Overall: >1500 applications > 250 interviews > 40 accepted = ~3% acceptance • Fintech: >300 applications > 10-15 startups/batch • Many post-launch, revenue-generating companies (no “idea-only”)
Investment strategy and criteria represent current investment model and may vary at the discretion of the 500 FinTech general partner. Terms noted on this slide may vary by investment.
Accelerator
Seed
Distro
Follow-On
Angel Pre-Seed Seed Post-Seed Series A/B Growth
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/ / Accelerator Deliverables
Community
Advice
Curriculum
Support Connections Money
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CONFERENCES + EVENTS1
TEAM MEMBERS
More than 50 events with 300-1,000 attendees per event, for a total reach of over 35,000 people in
person + digital channels
Design, technology, marketing, and product experts from
top companies in Silicon Valley and elsewhere
From 50+ countries around the world, our founders provide peer
review and feedback on products, industry verticals, platforms, etc.
250+ 3,000+ MENTORS FOUNDERS
7 ATTENDEES 35,000
EVENTS 50+
1. Conferences and Events are produced by 500 Startups Incubator, L.L.C. The 500 Startups funds do not participate in any revenue generated by these activities 2. The numbers represented on this page provide a snapshot of some of our Community-building platforms as at a particular time. They are estimated as of 12/31/2015 and may change.
500 Startups Events and Community Platforms
COMMUNITY
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The Case for Transformation in Financial Services
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$13T
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/ Digital changes ALL customer expectations
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<1%USLoansOriginatedOnline
Source: Wall Street Journal June 2016
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/ The best and brightest don’t want to work for incumbents.
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FinTech/InsurTech: Technology-based solutions to make financial services more efficient, whether by disrupting or enabling incumbents.
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Source: McKinsey & CB Insights
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/ 2014 Areas of Innovation - Global
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/ Digital delivers superior margins…
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…and customer satisfaction
Source: OnDeck company filings
76
46
199
OnDeck CommunityBanks RegionalBanks Na<onalBanks
Net Promoter Score US customers n=100
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Source: KPMG & CB Insights
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PaymentsLending
PaymentsPaymentsPayments
‘GAFA’ anchors customers’ digital lives…
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434M Customers 8.5M Merchants 12.7B Transactions/Year
Payments Credit Scoring Lending Banking Investments
$60B Market Cap
Sources: http://expandedramblings.com/index.php/alibaba-statistics/; Wall Street Journal Market Watch Apr 26, 2016
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/ 27 FinTech Unicorns - $137B+ in Market Cap
http://www.bizjournals.com/sanjose/news/2016/03/09/19-fintech-unicorns-that-might-end-up-being-real.html
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Source:CBInsightsdata
0
10
20
30
40
50
60
70
80
90
2011Q12011Q22011Q32011Q42012Q12012Q22012Q32012Q42013Q12013Q22013Q32013Q42014Q12014Q22014Q32014Q42015Q12015Q22015Q32015Q4
FinTechM&AAc;vity:2011-2015
M&A IPO
Exits in the space are climbing
300 in 2015 vs. 100 in 2011
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Different subsectors & regulation = different industries
Tipping point
Laggards shrink / die
“New normal”
New technology
emerges
Innovative startups disrupt
Early adopters proliferate
Advanced incumbents start
adapting
Mainstream customers
shift
Source: McKinsey & Company & Mike Sigal Analysis
CapitalMarketsFullStackBanking
LendingWealthManagement
Payments
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FinTech will decimate margins.
Source: PwC Global FinTech Survey 2016
28%
24% 23% 22% 21%
Fundtransfer&payments
Banks Average Asset/Wealthmanagementfirms
Insurancefirms
% of Top Line estimated to be lost
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How are Incumbents Responding?
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Tippingpoint
Laggardsshrink/die
“Newnormal”
Advancedincumbentsstartadap<ng
Newtechnologyemerges
Innova<vestartupsdisrupt
Earlyadoptersproliferate
Mainstreamcustomers
shi[
Source:McKinsey&Company
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500 Corporate Innovation Framework
Dealflow Finding the right startups & ideas
Engagement Working with them
Outcome Getting results
PartnerInvestAcquire
Accelerators/OutpostsPR/Sponsorships,Competitions/Events, VC Fund Investmetns
Skills/TalentMarket SharePositioning/Recruiting
Corporates need the right startups AND internal processes to get results
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/ Transformation Toolkit
SV Tours Attending Conferences Lab/Accelerator/Sandbox Silicon Valley Outposts FinTech Hubs Engaging with Regulators Startup Partnerships Direct Startup Investments (CVC) Acquisitions Venture Fund Investments
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MindsetSkillsProcessCulture
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/ Don’t mistake ‘Digitalization’ for ‘Digital’ Sell the right vision to executive leadership Get some startup/VC mojo…company wide Find the ideas globally Pick the right KPIs for the right time Engage customers & stakeholders often Disciplined, rapid experiments & reporting #GET500STRONG
Rules for Building Innovation Capabilities and Culture
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Financial Services for the Rest of Us!
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Source: https://www.cbinsights.com/blog/fin-tech-funding-growth/
Most Active Early-Stage FinTech Investor in the World
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Wealth/Investing Financial Management Payments/Transfers
Lending Crowdfunding Insurance
Red outline > $1B in value - Blue outline $100m-$1B in value
Blockchain
Fast growing disrupters & enablers
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/ / Active FinTech investments in 24 countries & growing
Investments by Country – Q3 2016 Argentina 1 Indonesia 1 Singapore 3 Austria 1 Japan 1 Slovenia 1 Brazil 3 Jordan 1 South Korea 2 Canada 1 Kenya 2 Sweden 1 China 2 Malaysia 2 Thailand 1 Estonia 1 Mexico 6 UK 1 Germany 1 Columbia 1 Ukraine 1 India 5 Nigera 1 USA 87
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/ Platform for Digital Transformation of FinServe
Global brand & startup deal flow Early-Stage Venture Fund Silicon Valley Accelerator Corporate Partner Program Startup & Corporate Expertise Network of mentors, founders & investors
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/ FinTech track at 500 Startups SF Accelerator
500S curriculum + FinTech content Run by FinTech entrepreneurs Only pure-play FinTech accelerator in SV Global community of FinTech Angels, VCs, Corporate Innovators & Mentors
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/ Corporate Partners leveraging 500 FinTech’s platform
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500 Corporate Innovation Framework
Dealflow Finding the right startups & ideas
Engagement Working with them
Outcome Getting results
PartnerInvestAcquire
Accelerators/OutpostsPR/Sponsorships,Competitions/Events, VC Fund Investmetns
Skills/TalentMarket SharePositioning
Corporates need the right startups AND internal processes to get results
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/ / / 500 Startups Corporate Innovation Services
Accelerate the development of innovation processes and capacity
Portfolio Access 500 Dealflow
Custom Dealflow Dealflow Process
Corporate Training Immersion Programs
500 Courses Ecosystem
Engagement Team Recruitment
Innovation Audit Strategy Formation
PoC Strategy Accelerator Strategy
CVC Strategy
Dealflow Development
Engagement Capacity
Outcome Definition
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Basic Portfolio Access • Event Invitations • Newsletter Commercial Partnership Upside: Corporate FinTech Accelerator LP Investment
500 Startups Corporate Innovation Service Delivery
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/ 500 FinTech LP Investments
Partnership Benefits PLUS Financial Returns Early stage co-investment opportunities
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/ ICICI Lombard Interests
Roboadvising (Distribution) • Embroker (embroker.com) • Indio (useindio.com) • Inzmo (inzmo.com) • VisionX (visionx.co) • Trym (trym.co)
New Products • WorldCover (worldcovr.com)
Drone based surveys • BetterView (presentation)
David Lyman [email protected]
Blockchain • Chain (chain.com) AI • Datatron (presentation)
Harish Doddi • [email protected]
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/ Blockchain in Insurance
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/ Get #500STRONG
Questions? Want to introduce Startups to 500 FinTech? Want to invest in our FinTech Fund or partner with us? Mike Sigal [email protected] Join the 500 Fintech Community and get our updates http://bit.ly/2c3Q9s6
