Fintech Summer Report 2024

FINTECH

SEMI-ANNUAL REPORT

Summer 2024

Index

Macroeconomic Outlook

FinTech Industry Overview

FinTech Subsector Breakdown

FinTech Financing

FinTech M&A Activity

FinTech Market Performance

Looking Ahead

Case Studies

Behind this Report

About FE International

Macroeconomic Overview

The global economy is expected to settle into a pattern of "steady" growth. Despite recent challenges such as high interest rates, inflation, and geopolitical tensions, the 3.2% growth rate for 2024 and 2025 indicates resilience as we settle into a new normal after the pandemic. The economic pick-up is not uniform. Developed economies will likely see a slight acceleration from 1.7% growth in 2024 to 1.8% in 2025, while emerging markets and developing economies' growth rates are anticipated to remain stable. There's a sense of optimism emerging among business leaders. In the US, CEO confidence has risen for two quarters in a row, with recession fears fading significantly. European CEOs and China-based CEOs of US and European companies are also slightly more optimistic, with a more positive outlook on the short-term economic situation. However, cautious optimism in encouraged–market projections could shift notably depending on the outcome of the upcoming US presidential elections. Global Economy Settles Into Cautious Growth Pattern

Real GDP Growth (% YoY)

Forecast

4.2%

3.6% 2.3% 4.7%

3.2% 1.8% 4.2%

3.2%

1.7%

2018 2019 2020 2021

2022 2023 2024E 2025F

World

Advanced economies

Emerging market and developing economies

The Conference Board Measure of CEO Confidence

Q4 2023

Q2 2024

H2 2023

H1 2024

H2 2023

H1 2024

United States

Europe

China

Source: IMF World Economic Outlook, July 2024. The Conference Board. Note: Measure of CEO Confidence is a barometer of the health of the US economy from the perspective of US chief executives.

To combat inflation, central banks raised interest rates to levels considered restrictive to economic growth. However, with global inflation rates falling and projected to reach 4.4% by 2025, the IMF suggests these interest rates are nearing their peak. This normalization in interest rates and inflation eases the financial burden on businesses and consumers, potentially spurring an uptick in consumer activity and further investments from businesses. Leading economists are forecasting that advanced economies will achieve their inflation targets sooner than emerging markets. This recovery could be due to a combination of factors, such as stronger economic fundamentals and more robust policy responses. In recent months, the Swiss National Bank (SNB) and European Central Bank (ECB) lowered their interest rates. This is a positive sign for further cuts, with other markets following the impact of these rates closely. Inflation & Interest Rates Stabilizing

CPI Inflation Rate (%)

Forecast

8.2%

4.4% 6.0%

3.6% 2.0% 5.0%

5.9%

2.1%

2.7%

2018 2019 2020 2021

2022 2023 2024E 2025F

World

Advanced economies

Emerging market and developing economies

Interest Rate (%)

5.4% 4.3% 5.3%

Recent rate cuts by SNB & ECB

0.1% 1.3%

Jan-20 Nov-20

Oct-21

Aug-22

Jul-23

Jun-24

US (Fed)

Euro Area (ECB)

United Kingdom (BoE)

Japan (Bank of Japan)

Switzerland (SNB policy rate)

Source: IMF World Economic Outlook, July 2024, Interest rates as per central bank data of respective regions. Note: ECB = European Central Bank, SNB = Swiss National Bank.

Venture Capital & Private Equity Investment Outlook

VC Dry Powder ($B) by Vintage

PE Dry Powder ($B) by Vintage

$0 B $200 B $400 B $600 B $800 B $1,000 B $1,200 B $1,400 B $1,600 B $1,800 B

$0 B $100 B $200 B $300 B $400 B $500 B $600 B $700 B $800 B 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

2023 2022 2021 2020 2019 2018 2017 2016

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Dry powder for VC and PE has reached record levels, exceeding $700 billion for VCs and $1.5 trillion for PEs. This abundance of available capital is particularly of interest for fintech companies, with vast capital available for both fundraising and exits. Additionally, fintech-focused VCs are on the rise, with several significant fundraising rounds targeting various segments. However, converting this dry powder into actual investments may rely on the resurgence of strong exit opportunities for VCs through IPOs or M&A activity – something that is picking up significantly in 2024.

Source: Pitchbook as of March 2024.

FinTech Industry Overview

The State of FinTech

FinTech and the overall market faced significant challenges in 2023—rising interest rates, inflation, slowing economic growth, geopolitical conflicts, and bank failures, like Silicon Valley Bank, Silvergate Bank, and First Republic Bank, rocked every industry. However, 2024 shows increased fintech deal activity driven by the growing adoption of digital payments, the popularity of mobile banking, and anticipated decreases in interest rates. Plus, ecommerce reaches a new frontier with automation and AI. That means constant demands for fintech deal activity as providers seek secure ways to process payment and manage financials. Regulation in payments, data security, privacy, and digital assets is also increasing. The "regulatory lag" that often colors the industry is catching up to the growing upticks in cybercrime.

FinTech is Projected to Grow Sixfold by 2030 In 2021, FinTech companies accounted for 4% of the total revenues generated by the banking sector at about $245 billion . By 2030, this share is projected to increase to 13%–with revenues expected to surpass $1.5 trillion . The COVID-19 pandemic radically accelerated the adoption of digital financial services. This paired with the advancements in technologies like blockchain, machine learning, and AI is setting the stage for massive growth. The growth of fintech hasn't been uniform across the globe. Over the past two decades, different regions have experienced varying levels of maturity due to several key factors such as funding availability, government regulations surrounding fintech activities and the pace of technological adoption. As a result, each region finds itself at a different stage in the fintech journey. Local players are constantly innovating to address their unique challenges or adapting successful models from other regions to fit their specific contexts.

Global FinTech Revenues

(In Billions of USD)

1,500

200

FinTech Penetration of Banking Revenues

2021

1,300

13%

245

225

2030F

2021

2030F

Banking Insurance

Source: BCG – Global FinTech 2023

Asia-Pacific on Track to Claim the Top Spot by 2030 Global FinTech revenue growth by region, 2021 to 2030

North America 4.0x – $520B

Europe 5.5x – $190B

Africa 13.0x – $65B

APAC 8.5x – $600B

LatAm 12.5x – $125B

Growth multiple (X) - 2030 revenues ($B)

FinTech expansion is not uniform across the globe. North America , led by the US with its vast financial resources and room for innovation, is poised to remain the global fintech leader. The US is projected to capture 32% of global fintech revenue growth by 2030, driven by B2B solutions and monoline fintech's expanding their offerings. Europe is expected to experience significant growth, driven by forward-looking regulations and strong growth in payments, embedded finance, and B2B solutions.

With over three-quarters of adults remaining underbanked, emerging markets are primed for future growth. Africa and the Middle East , with high mobile phone penetration but low bank access, are prime candidates for FinTech companies leapfrogging traditional banks. Asia-Pacific , driven by China and India's large unbanked populations, is expected to surpass the US as the world's biggest FinTech market by 2030. Latin America's FinTech markets are also on the rise, led by established players in Brazil and Mexico.

Source: BCG – Global FinTech 2023,

FinTech Subsector Breakdown

Sectors

Overview

Key Trends

• Focuses on revolutionizing payment methods with faster, easier, more convenient, and secure ways of transferring money.

• Investors and FinTech organizations are increasingly focusing on regions like Africa, South America, and parts of Asia where digital payments are expanding. • Payment processing remains a top priority for investors, highlighting its continued importance. • Established insurers are acquiring insurtech companies to enhance their offerings. • Focus on seamlessly integrating insurtech solutions into existing systems. • Increased investment, particularly in regions with clear regulations. • Central Bank Digital Currencies (CBDCs) and stablecoins are gaining traction in different regions. • Growing focus on secure and reliable blockchain solutions catering to large institutions.

PaymentTech

• Leverages technology to transform the insurance industry by simplifying processes, personalizing policies, and automating claims processing.

InsurTech

• Uses blockchain technology—a decentralized digital ledger system—to generate new financial instruments like cryptocurrencies and facilitate secure and transparent transactions. • Potential applications are cross-border payments, smart contracts (self-executing agreements), and fractional ownership of assets.

Crypto/Blockchain

• Offers innovative solutions in borrowing and lending money.

• Focus on providing short-term financing and B2B payment solutions for businesses after D2C success.

Credit/Lending Tech

Source: FE Internal Analysis.

FinTech Subsector Breakdown

Sectors

Overview

Key Trends

• Offers modern traditional banking services with digital platforms for managing accounts, mobile banking applications, and integrated financial products. • Leverages cloud-based software solutions specifically designed to address the financial needs of other businesses. • Analyzes financial data using big data analytics and AI to assess risk, detect fraud, and provide anti-money-laundering solutions. • Offers technology-driven solutions for financial institutions to keep up with complex regulations, automate reporting processes, and deal with the risk of compliance. • Leverages technology in democratizing wealth management through automated investment platforms, including robo- advisors, fractional share investing, and digital wealth management tools.

• Rise of investments in FinTech solutions promoting Environmental, Social, and Governance (ESG) goals. • Growing focus on leveraging AI to empower small and medium businesses. • Increased investment in threat intelligence platforms and automation for proactive risk management. • Protecting data and systems with AI-powered cybersecurity solutions • Continued focus on regulatory technology solutions for financial crime and fraud protection • Using technology to improve the delivery and value of wealth advisory services. • Exploring how AI can further enhance wealth management strategies.

Finance/Banking Tech

Financial Data & Risk

WealthTech

Source: FE Internal Analysis.

FinTech Financing

Global FinTech Financing While the market has experienced a correction in recent years, new indicators show lasting potentialin the sector.

FinTech Financing by Year (In Billions of USD)

Total Deal Size in ($B) # of Deals

4,233

3,912

Annualized

2,447

Key trends:

2,244

1,888

• Funding Decline: FinTech funding volume dropped significantly in 2022 and 2023, exceeding a 30% decline each year. This trend continued in Q1 2024, with the lowest first-quarter volume since 2020 (at $8.8 billion). However, a slight uptick in Q2 2024 suggests a potential shift in trajectory. • Shifting Investment Strategies: Mimicking the trend seen in 2023, VCs are currently deploying smaller investment sizes, with most deals falling below $5 million. • Bright Spots Remain: Despite the overall decline, significant capital continues to flow into the fintech space. As of 2024, 31 financing rounds have surpassed the $100 million mark, indicating continued investor interest in high-growth opportunities. The uptick in Q2 volume, along with the continued presence of large investment rounds exceeding $100 million, signifies continued investor confidence in the fintech sector.

1,033

146.9

99.9

35.5

63.2

58.1

19.4

2020

2021

2022

2023

YTD 2024

Financing Volume by Quarter (In Billions of USD)

Total Deal Size in ($B) # of Deals

1220

1133

1094

1056 1102

888

844

708 667

37.5 39.2 38.7 36.4

664

656

31.8

555

534

533 571 572

28.7

478

460

21.3

20.7

17.7

17.2

15.5

13.6

12.3

12.1

11.0 10.9

8.8 10.7

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 2024

Source: Pitchbook as of June 2024. Data consists of transactions where deal value was disclosed.

Distribution of Financing Rounds by Volume

$0 - $5M $5 - $10M $10 - $25M $25 - $100M $100 - $250M $250M+

12%

13%

45%

46%

2022

2023

Q1 2024

19%

18%

19%

18%

• Investors are looking for deals in the lower and middle markets–deals under $100M are the majority in 2024. However, there's still significant capital flowing into the space as 31 financing rounds have surpassed the $100 million mark in 2024 so far. • Finance/Banking tech companies raised the most capital followed by credit/lending tech companies. Notably, UK-based Abound, a credit lending tech company, secured the year's largest deal so far with approximately $1 billion raised in May 2024.

Source: Pitchbook as of June 2024. Data consists of transactions where deal value was disclosed.

Largest Financing Deals in 2024

Deal Size ($M)

Company

Date

Funding Type

Company

Date

Funding Type

07-May-24

1,000

Early-Stage VC

18-Jan-24

175

Later Stage VC

04-Apr-24

685

Later Stage VC

11-Mar-24

175

PE Growth/Expansion

08-May-24

621

Later Stage VC

02-May-24

169

Later Stage VC

10-Apr-24

360

Later Stage VC

16-May-24

165

Early-Stage VC

Yi'an Enterprise

01-Feb-24

281

Early-Stage VC

17-Apr-24

163

Early-Stage VC

12-Feb-24

270

Early-Stage VC

10-Apr-24

159

PIPE

25-Apr-24

250

Later Stage VC

31-Jan-24

152

Later Stage VC

09-Apr-24

225

Early-Stage VC

21-May-24

150

Early-Stage VC

26-Apr-24

209

Later Stage VC

21-May-24

150

PE Growth/Expansion

08-Mar-24

200

Later Stage VC

29-Apr-24

150

PIPE

24-Jan-24

200

Later Stage VC

17-Apr-24

150

Later Stage VC

By FinTech Sector

Source: Pitchbook as of June 2024.

PaymentTech

Crypto/Blockchain

Credit / Lending Tech

InsurTech

Finance / Banking Tech

Financial Data & Risk

WealthTech

Top VC-Backed Enterprise Companies by total VC raised since 2020

Company

VC raised to date ($M)

Segment

IPO probability 1

M&A probablity 1

No exit probability 1

$8,320

84%

14%

$6,300

$4,668

$3,579

97%

$2,954

$2,449

$2,129

$2,000

$1,664

92%

$1,640

85%

Source: Pitchbook as of June 2024. 1. Based on PitchBook’s VC Exit Predictor, which calculates exit probability using a machine learning model.

PaymentTech Finance & Banking Tech

WealthTech

Credit / Lending Tech

FinTech M&A Activity

FinTech M&A by Year (In Billions of USD)

Total Deal Size in ($B) # of Deals

Following a stellar 2021, fintech M&A volume experienced a correction, declining by 13% and 32% in 2022 and 2023 respectively. However, the industry is showing strong signs of recovery in 2024. The total value of deals in Q1 2024 has already surpassed the entirety of 2023, and current trends in Q2 indicate a continuation of this positive momentum.

Annualized

352

136.7

214

192

161

117

Key trends:

77.2

117.9

102.4

69.2

74.8

• Large Deals Drive Growth: The resurgence of large transactions exceeding $1 billion is a significant factor in the overall increase in M&A volume. Examples include Capital One's proposed $35 billion acquisition of Discover (the largest fintech deal of 2024) and the take-private of Nuvei by Advent for c.$6.3 billion. • Increased Activity in PaymentTech: PaymentTech witnessed a surge in deal activity, driven by the growing demand for embedded payments and real-time payment features. Notably, FIS's sale of a 55% stake in its Merchant Solutions business (WorldPay) to GTCR for a c.$12.5 billion LBO exemplifies this trend.

2020

2021

2022

2023

YTD 2024

M&A Volume by Quarter (In Billions of USD)

Total Deal Size in ($B) # of Deals

84 88 88

43 38 42 38 43

37 38

7.6 4.7 16.3 48.6 32.5 39.8 26.1 18.0 68.3 10.4 6.4 17.0 22.0 7.6 23.9 15.7 58.2 16.0

Overall, the fintech M&A landscape is experiencing a significant turnaround in 2024.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 2024

Source: Pitchbook as of June 2024. Data consists of transactions where deal value was disclosed.

Distribution of Global M&A Deals by Volume While large-scale FinTech mergers have captured headlines, the lower middle market remains the backbone of the industry, accounting for a dominant 55%

13%

19%

2022

2023

Q1 2024

28%

55%

60%

66%

20%

$0 - $100M $100 - $500M $500 - $1000M $1000M+

• Billion-dollar deal volumes doubled in the last two years, mainly driven by: – Growing demand for integrated financial solutions – Increased availability of capital and decreased interest rates

• Strategic acquirers are expected to be major players, looking to: – Enhance their digital capabilities – Expand their product offerings and reach new customer segments – Access cutting-edge technologies

Source: Pitchbook as of June 2024. Data consists of transactions where deal value was disclosed.

Largest FinTech M&A Deals in 2024

Deal Size ($M)

EV/LTM Revenue

Deal Size ($M)

EV/LTM Revenue

Target

Buyer

Date

Target

Buyer

Date

16-Feb-24

2.2x

31-Mar-24

35,300

653

01-Feb-24

12,502

556

01-Apr-24

5.0x

04-Apr-24

6,300

538

01-Apr-24

02-Apr-24

4,003

500

26-Jan-24

16.9x

22-Jan-24

4,000

500

08-May-24

11-Jan-24

11.4x

1,250

429

05-Feb-24

1.4x

02-Jan-24

1,200

427

01-Mar-24

16-Jan-24

1,000

235

11-Jun-24

30-Jan-24

3.5x

930

204

11-Jun-24

11.6x

06-Jun-24

731

200

09-Apr-24

05-Jan-24

700

200

By Deal Type

By FinTech Sector

Source: Pitchbook as of June 2024.

PaymentTech

Crypto/Blockchain

Credit / Lending Tech

InsurTech

Private Equity

Strategic

Finance / Banking Tech

Financial Data & Risk

WealthTech

Lower Middle Market FinTech M&A Deals in 2024

Deal Size ($M)

EV/LTM Revenue

Deal Size ($M)

EV/LTM Revenue

Target

Buyer

Date

Target

Buyer

Date

05-Mar-24

108.0

27-Feb-24

48.3

22-Feb-24

96.7

1.0x

24-Apr-24

43.0

07-May-24

87.0

13-Feb-24

40.0

28-Mar-24

85.1

03-Jan-24

39.2

20-Mar-24

75.0

14-Mar-24

35.5

15-Mar-24

63.5

01-Jan-24

31.5

4.3x

29-Feb-24

60.0

20-Feb-24

28.5

10-Jun-24

50.0

12-Mar-24

28.5

21-May-24

50.0

29-Mar-24

16.1

14.3x

By Deal Type

By FinTech Sector

Source: Pitchbook as of June 2024.

PaymentTech

Crypto/Blockchain

Credit / Lending Tech

InsurTech

Private Equity

Strategic

Finance / Banking Tech

Financial Data & Risk

WealthTech

FinTech Market Performance

FinTech Sector Market Performance Public fintech stocks performed strongly in the last twelve months

L12M Share Price Performance

Share Price Performance

250

Last 6 Months

Last 12 Months

FinTech Sector / Index

220

PaymentTech

+3.5%

+18.2%

190

InsurTech

+46.4%

+77.9%

Crypto/Blockchain

+13.2%

+103.8%

160

Credit/Lending Tech

(14.5%)

+35.3%

130

Finance/Banking Tech

+12.2%

+45.5%

100

Financial Data & Risk

(3.5%)

+8.4%

Jun-23

Aug-23

Oct-23

Dec-23

Feb-24

Apr-24

Jun-24

WealthTech

+3.1%

+4.7%

PaymentTech

InsurTech

Crypto/Blockchain Financial Data & Risk

Credit / Lending Tech

Finance & Banking Tech

S&P 500

+14.6%

+25.9%

WealthTech

S&P 500

Source: Capital IQ as of June 2024 and FE Internal Analysis. Note: FinTech subsectors are composed of FE selected 50+ public companies (refer slide 27).

Median FinTech Public Valuation Multiples

Operational

Valuation

Revenue Growth

EBITDA Margin

Net Income Margin

EV/Revenue

EV/EBITDA

23A 24E

25E

23A 24E

25E

23A 24E

25E

23A 24E

25E

23A 24E

25E

PaymentTech

6% 11% 10% 27% 41% 41% 10% 27% 27% 4.3x

4.1x

3.8x

16.6x

12.3x

10.6x

InsurTech

(14%)

29% 19% (3%)

8% 9% (10%)

0% 2% 2.1x

1.6x

1.3x

47.8x

15.5x

9.7x

Crypto/Blockchain

14% 90% 45% (12%)

50% 52% (51%)

(14%)

15% 16.7x

6.9x

3.6x

14.3x

15.4x

6.9x

Credit/Lending Tech

(35%)

11% 17% 2% 18% 21% (9%)

8% 12% 5.3x

4.6x

4.0x

20.3x

11.4x

11.0x

Finance/Banking Tech

2% 9% 7% 19% 27% 29% 8% 13% 15% 5.7x

5.3x

4.9x

24.0x 13.2x

12.1x

Financial Data & Risk

5% 11% 8% 30% 39% 39% 17% 25% 24% 8.1x

7.6x

7.2x

27.2x 23.4x

21.3x

WealthTech

12% 12% 7% 25% 31% 31% 17% 26% 26% 4.2x

3.7x

3.5x

16.8x

12.1x

11.3x

Based on our analysis of comparable FinTech companies, a strong growth surge is expected across nearly all sectors in 2024 and 2025 with many exceeding the 'rule of 40' benchmark. The EV/Revenue multiple (2024E and 2025E) of ‘Financial Data & Risk’ is trading at a premium. This is driven by Verisk, Moody’s and S&P Global trading above 10x multiples.

Source: Capital IQ as of June 2024 and FE Internal Analysis. Note: FinTech subsectors are composed of FE selected 50+ public companies (refer slide 27).

FE Selected Public Comparables

PaymentTech

InsurTech

Crypto / Blockchain

Credit / Lending Tech Finance / Banking Tech Financial Data & Risk

WealthTech

Adyen

CCC Intelligent Solutions

Applied Digital

Affirm Holdings

ACI Worldwide

BlackLine

AssetMark Financial

FIS

Lemonade

Canaan

Alfa

Alkami Technology

Clearwater Analytics

Enfusion

Flywire

MediaAlpha

Galaxy Digital

LendingTree

Iress Limited

Dun & Bradstreet

SEI Investments

Corpay

EverQuote

Bitfarms Ltd.

Open Lending

Jack Henry & Associates

Equifax

Block

Clover Health

Bit Digital

Rocket Companies

MeridianLink

Experian

Fiserv

LendingTree

Coinbase

Upstart

Propel

FactSet

Global Payments

MultiPlan

Iris Energy

Temenos

Moody's

Mastercard

Oscar Health

Marathon Digital

S&P Global

Paymentus

Rocket Companies

MicroStrategy

Thomson Reuters

Payoneer Global

Root

Riot Platforms

Verisk Analytics

PayPal

SelectQuote

TeraWulf

Workiva

Paysafe Repay Shift4 Payments Visa

FinTech Regulatory Timeline Key actions and rulings June-2024: FSB to publish consultation report on consistency of bank and non-bank supervision of cross border payments service providers Oct-2024: FSB to release report on the financial stability implications of tokenization • Basel Committee to publish report on bank and supervisory implications of the ongoing digitalization of finance (inc. AI/ML, big data, governance structures) by end-2024 • ISO/TC 307 to continue development of International Standards on blockchain and DLT to support innovation, governance and development Nov 2024: FSB to release report on the financial stability implications of Artificial Intelligence

Global

2025: •

Basel Committee GHOS agreed implementation of prudential treatment of banks’ cryptoassets by 1 Jan • FSB, with SSBs*, to review implementation of recommendations for the regulation, supervision, and oversight of cryptoasset activities and markets by end-2025

2024

2025

2026

By 2026: • ESMA to report assessment of DLT Pilot regime to EC • EC to decide whether to amend, extend, make permanent, or terminate DLT Pilot Regime From 2026 • European regulations and directives to enter scope of ESAP between 2026 and 2030 Nov- 2026 • ECB to conclude digital euro preparation phase

2025: • EU to apply Regulation (EU) 2022/2554 Digital Operational Resilience Act and Amend Directive from 17 Jan 2025 • EC to finish European Digital Identity Regulation project

Q2 2024: ESMA to consult on MiCA guidelines and technical standards Q3 2024: ESMA to consult on MiCA guidelines and technical standards as well as DORA RTS, second batch of ITS and Feasibility study 2024: • EBA to develop oversight and supervisory capacity for DORA & MiCA • ESAs to deliver DORA-related policy mandates in January and July 2024 • ESMA to conclude work on technical standards and guidelines for DORA & MiCA • EC to monitor implementation of BCBS prudential treatment of cryptoasset exposures and, if appropriate, adopt a

legislative proposal by 31 December 2024 to transpose standards into Union law 2024-2026: EIOPA to implement DORA, the AI Act & ESAP and focus on policy work

Notes: *SSB: standard-setting bodies See also: European Commission Digital Finance Package This information is provided by ICMA for information purposes only and should not be relied upon as legal, financial or other professional advice. While the information contained herein is taken from sources believed to be reliable, ICMA does not represent or warrant that it is accurate or complete and neither ICMA nor its employees shall have any liability arising from or relating to the use of this publication or its contents

Looking Ahead The post-pandemic hangover has reemphasized the importance of strong fundamentals for startups and sustainable, profitable growth for established companies. Investors remain cautious but are still interested in high-quality companies with strong growth metrics and clear cost structures.

Key Takeaways:

• Maturing sector: Deal values are growing. Tech companies are moving past rapid growth and focusing on sustainable, profitable expansion. • Investment to pick up : Overall investment is expected to remain soft, but it could rise as interest rates fall in Q3/Q4. • Embedded finance, payments, lending, and AI in demand: These areas are attracting significant investor interest, with embedded finance being a particular focus. Within FinTech, we expect increased deal flow and consolidation as the industry adopts new technology, serves a growing tech-literate and underbanked population, and finds its footing within macroeconomic and geopolitical instability.

Case Studies

Sale of a Salesforce Payment Orchestration FE International represented Asperato, a Salesforce payment orchestration solution, which was sold to a Salesforce focused private equity firm

Asperato is an embedded Salesforce payment orchestration solution with a gross merchandise value (GMV) run rate of over $1.1 billion. The company helps businesses securely collect and process payments around the world with its fully tokenized PCI-DSS Level 1 compliant solutions, which have been audited and certified to meet the highest standards of security. By providing a variety of payment options and interfacing with 18 payment service providers, Asperato allows its customers to use their preferred method of payment on the Salesforce platform. Company Overview:

Sold to

Key Value Drivers:

• Opportunity presented to 500 buyers with the majority of outreach focused on strategic acquirers Buyer Interest:

Process Results:

Salesforce Payment Solution

• Revenue has grown 33% year over year between 2021-2022

• Received three competitive offers for the business from private equity firms

• 87% gross margins

• Offers received exceeded

• £1.6M ARR as of date went under offer

sellers’ expectations, achieving favorable deal terms

• Net revenue retention of 111% (2022)

Cart Software Successfully Exited to Private Equity FE International represented ThriveCart by reaching out to select group of 241 buyers during the sales process—resulting in 9 qualified offers received

ThriveCart is a premier CRO and checkout cart platform positioned at the forefront of the industry's technology. It offers an innovative and user-friendly solution for small and medium businesses eager to enhance their ecommerce capabilities. With an impressive suite of tools designed for building cart pages, funnels, affiliate campaigns, and courses, ThriveCart ensures businesses are well-equipped to thrive in the online marketplace. Company Overview:

Sold to

Key Value Drivers:

Buyer Interest:

• FE International exceeded seller’s expectations with all contingent payments post- sale paid out in full Process Results:

B2B SaaS CRO & Checkout Cart Platform

• Strong market presence with c.$860M+ in annual processed sales, with lifetime values reaching c.$2.1B+ • Stellar financial performance marked by a CAGR of c.48% from 2016 to 2021 • Revenue share agreement with a globally renowned payment processor • Optimal operational efficiency reflected in high EBITDA margins of over c.60%

• 241 Parties contacted • Notable parties included: Greater Sum Ventures,

Harmony Venture Labs, Kajabi, Republix, Stax Payments, and Stripe

Behind this Report Ashley Bohn Senior Associate

Ismael Wrixen Executive Chairman

Ashley Bohn is a Senior Associate on the Investment Banking team at FE International. Bohn provides advisory services across fintech, digital media, and similar areas. She previously worked in public accounting where she serviced companies with gross revenues ranging from six to ten figures within the technology industry. She is a Certified Public Accountant in New York State. Rohit Kumbhar Senior Associate Rohit Kumbhar is a Senior Associate on the Investment Banking team at FE International. He has extensive experience in investment banking across multiple sectors. Previously, he worked as an Associate at Bank of America serving FTSE 100/250 clients for corporate broking advisory, investor engagement and M&A.

Ismael Wrixen is Executive Chairman of FE International. Before FE, Wrixen was in large-cap M&A investment banking, where he executed several high-profile public deals, namely in the technology sector. He is a member of the Forbes Finance Council and a NACVA 2018 40 Under 40 Award winner.

Thomas Smale Chief Executive Officer

Thomas Smale dedicates his career to helping founders get acquired on their terms. He built FE into the leading advisor for lower middle market technology businesses. Thomas offers invaluable technical, diligence, and negotiation advice to early-stage and seasoned business owners alike.

Randal Stephenson Head of Investment Banking

Randal Stephenson has over 25 years of experience in both M&A advisory and debt and equity capital raising. Before FE, he held senior investment banking positions at Merrill Lynch, Jefferies, CIT Group, and Duff & Phelps. He has closed over 300 transactions valued at $44 billion across 22 countries.

About FE International Founded in 2010, FE International is an award-winning strategic advisor for technology businesses.

Sector Expertise

1,500 + Transactions completed on behalf of clients 1

Consumer Product Ecommerce Over 100 Successfully Closed Deals

Artificial Intelligence Over 15 Successfully Closed Deals

Agency & Marketing Solutions Over 50 Successfully Closed Deals

$48M Average Transaction Value

Percentage Completed Transactions 2 94.1% 70% +

Percentage of Sell-Side Transactions

Education Technology and Online Training Over 50 Successfully Closed Deals

Cybersecurity & FinTech Over 40 Successfully Closed Deals

Marketplace Apps Over 50 Successfully Closed Deals

Source: Company data. 1. Includes approximately 300 transactions completed by FE professionals while at other firms. 2. Sell-Side transactions, measured from the date of launch of buyer outreach and marketing.

London, UK

Warsaw, Poland

New York, USA

San Francisco, USA

Miami, USA

Mumbai, India

Awards:

Featured in:

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