Daily Archives: May 28, 2015

Startup

Currently 108 unicorns worldwide and 13 FinTech Unicorns: The Industry Disrupters That Are Worth Billions

 

With currently 108 unicorns worldwide, the billion-dollar valuation club is nowhere near getting smaller.

According to venture capital tracker CB Insights, the number of new entrants in 2015 should double last year’s record, with the total this year to reach more than 76 new unicorns.

This upward trend can be explained by a combination of factors,including the continuously lower cost of launching a tech startup, quicker technology adoption, and the overall faster pace of disruption, Anand Sanwal, CEO and co-founder of CB Insights, said in a webinar put on by the company last week.

But for now, let’s focus on the startups that are attacking every product and service line typically offered by banks and financial institutions.

Fintech Unicorns

Based on a report from KPMG and CB Insights, CoinTelegraph has compiled a list of 13 FinTech startups that are valued over US$1 billion, or the so-called FinTech unicorns.

Overall, investors have mostly placed their bets on payments startups. However, other attractive markets include lending, insurance, remittance and personal finance management.

Among the venture capital investors that are putting big money on these market disrupters, several names are redundant: Khosla Ventures, Union Square Ventures, Accel Partners, Index Ventures, Sequoia Capital, Felicis Ventures, to name a few.

 

Company   Country   Industry Valuation (billion USD) Select Investors
Square Inc. US Mobile Payments 6 First Round Capital, Citi Ventures, GGV Capital
Stripe US Online Payments 3.5   Andreessen Horowitz, Khosla Ventures, Lowercase Capital, Redpoint Ventures, Union Square Ventures
Powa Technologies UK E-Commerce 2.7 Bright Station Ventures, Wellington Management
Prosper US P2P Lending 1.9   Benchmark, Accel Partners, DAG Ventures, Draper Fisher Jurvetson, Sequoia Capital
Adyen NL Payments 1.5 Felicis Ventures, Index Ventures, Temasek Holdings
Oscar US Health Insurance 1.5 BoxGroup, Formation8, Khosla Ventures
Deem US E-Commerce 1.35 Empire Ventures, Foundational Capital, Oak Investment Partners
Social Finance US Student Loan Refinancing 1.3 Baseline Ventures, Doll Capital Management, Institutional Venture Partners, Third Point, Wellington Management
  TransferWise UK Remittance 1 Andreessen Horowitz, IA Ventures, Index Ventures, SV Angel
Shopify CA E-Commerce 1   FirstMark Capital, Felicis Ventures, Insight Venture Partners
Credit Karma US Financial Management Platform 1 Felicis Ventures, SV Angel, Founders Fund
Klarna SE Online Payments 1 Institutional Venture Partners, Sequoia Capital, General Atlantic
Funding Circle UK P2P Lending 1 Accel Partners, Index Ventures, Ribbit Capital, Union Square Ventures
Source: http://www.slideshare.net/kpmg/kpmg-cbinsightsunicornreport

 

The Booming FinTech Scene

With almost US$14 billion injected into the space in the past 12 months, investors are obviously taking an increasing interest in FinTechs.

In the webinar on May 19, Sanwal discussed these new trends and the emerging players that are challenging our traditional financial services.

“In 2010, there were 223 unique investors within the FinTech space, and these are VCs only, not the angels, accelerators, or other types of investors that we track. In 2015, […] there are now 894 active investors. Investors see opportunities, they see blood in the space; it’s a massive industry.”

While the overall industry is burgeoning, a few niche markets are particularly attracting “smart money” from top VC investors. These focus areas include payments, personal finance management, lending and Bitcoin, Sanwal pointed out, with notable investments into Coinbase, Stripe, Funding Circle, Zuora and Prosper.

Beyond VC firms, players from diverse industries and “unusual suspects” are making significant moves, as well. These nonfinancial services corporations that are betting on FinTechs include Google — which has invested in 37 FinTech deals in the last 5 years — Intel and Salesforce, as well as Japanese SoftBank, Chinese RenRen and Ping An Insurance, and South African Naspers.

 

 

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ECB, Economy, Europe

Will Greece have until late July to come to an agreement with its creditors ?

Greece probably has until late July to come to an agreement with its creditors before potentially being forced out of the monetary union. Possible delays in payments to the International Monetary Fund in June shouldn’t prompt the European Central Bank to shut off vital liquidity to Greek banks. By contrast, a default on marketable debt — specifically the failure of the Greek government to pay 3.5 billion euros due to the ECB on July 20 — would probably force the central bank’s hand. The Greek government and its creditors are still likely to reach a deal on a list of reforms before that crucial date.June 5: Greece will have to make a payment of about 240 million SDRs to the IMF. That equals about 303 million euros. Greek Finance Minister Yanis Varoufakis has stated Greece will seal a deal with its creditors by this date. This is a medium-risk event. The raid from Greece’s own reserve account at the IMF to make a recent payment to the fund suggests the Syriza-led government is running out of cash to pay its creditors and will be unable to make this payment in the absence of additional bailout funds, though the immediate consequences of missing a payment to the IMF would be limited.June 12: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 341 million euros. This is a medium-risk event, similar to June 5.

June 12: Greece must roll over 3.6 billion euros of Treasury bills. This is a low-risk event.

June 16: Greece will have to make a payment of about 451 million SDRs to the IMF. That equals about 568 million euros. This is a medium-risk event. (See June 5.)

June 18: The Eurogroup will meet. This seems like a low-risk event because the finance ministers would still be able to discuss Greece at their next meeting even if an agreement were to remain elusive.

June 19: Greece will have to make a payment of about 270 million SDRs to the IMF. That equals about 341 million euros. This is a medium-risk event. (See June 5.)

June 19: Greece must roll over 1.6 billion euros of Treasury bills. This is a low-risk event.

June 25-26: The European Council meets in Brussels. German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras could use this opportunity to speak about financial aid to Greece. The heads of governments could force their officials to move in a particular direction, though the finance ministers are the government representatives who have to sign an agreement. This seems like a low-risk event because the Eurogroup will meet again on July 13.

End-June: The extension expires for the “Master Financial Assistance Facility Agreement,” as Greece’s bailout is known. This will probably be a medium-risk event. If Greece were no longer officially in a bailout program, the ECB could decide to re-assess its collateral rules linked to Emergency Liquidity Assistance, though the most likely outcome of this soft — and arbitrary — deadline is an extension if an agreement remains elusive.

July 10: Greece must roll over 2 billion euros of Treasury bills. This is a low-risk event.

July 13: Greece will have to make a payment of about 360 million SDRs to the IMF. That equals about 454 million euros. This is a medium-risk event. (See June 5.)

July 13: The Eurogroup will meet. This will probably be a high-risk event because it is the last scheduled Eurogroup meeting ahead of the July 20 payment to the ECB. In other words, this may be the last opportunity for the finance ministers to agree on the disbursement of funds ahead of that date.

July 17: Greece must roll over 1 billion euros of Treasury bills. This is a low-risk event.

July 19 and 20: Greece must make the largest coupon payments of the month — about 199 million euros and 104 million euros, respectively — on government bonds. The total for the month is 810 million euros. In addition, Greece’s 3.5 billion-euro bond held by the ECB matures on July 20. This is a high-risk event. A default could cause the ECB to cut off Greek banks’ access to ELA. That would probably be the first step to an exit of the beleaguered country from the monetary union.

Aug. 1: Greece will have to make a payment of about 141 million SDRs to the IMF. That equals about 177 million euros. This is a medium-risk event. (See June 5.)

Aug. 7: Greece must roll over 1 billion euros of Treasury bills. This is a low-risk event.

Aug. 14: Greece must roll over 1.4 billion euros of Treasury bills. This is a low-risk event.

Aug. 20: Greece must make the largest coupon payment of the month — about 194 million euros — on government bonds. The total for the month is 211 million euros. In addition, Greece’s 3.2 billion-euro bond held by the ECB matures. The riskiness of these events is path-dependent. If Greece has managed to secure bailout funds by this date, the payment shouldn’t create a problem. If it hasn’t secured the funds, Greece will probably have defaulted on the July 20 payment already and this second payment might be immaterial. If Greece hasn’t secured bailout funds and managed to somehow make the July 20 payment, this would be a high-risk event.

This post is courtesy of Bloomberg Intelligence Economics.

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China

China’s richest man might have been running a massive fraud

The only thing we know for sure is that stock in Hanergy Thin Film Power, a solar panel company equipment owned by what was at the time China’s richest man, fell 47 percent last Wednesday. We don’t know exactly why it fell, or even how much its Chairman Li Hejun lost when it did, since he apparently upped his bet against his own company in the days before the crash. Just that it did.

When you put all the pieces together, though, it looks even worse. It looks like Hanergy might be China’s Enron: an Energy Company of the Future™ whose stock price could only go up as long as it was borrowing money and could only borrow money as long as its stock price was going up. In other words, a house of cards that was just waiting for the first piece to fall.

Now, the first thing to know about Hanergy is that it’s really two companies. There’s the privately owned parent corporation, Hanergy Group, and the publicly traded subsidiary, Hanergy Thin Film Power (HFT). So far, so normal. The curious part, though, is that almost all of HFT’s sales are to its parent company at a net profit margin of 50 percent. And even more curious is that the parent company hasn’t actually, well, paid for most of the solar panel equipment it’s ostensibly bought from HFT. Through 2013, only 35 percent of the accounts between the two had been settled.

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2015/05/27/chinas-richest-man-might-have-been-running-a-massive-fraud/

 

 

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