Category Archives: Fundraising and Investing

Ant Plans $17.5 Billion Hong Kong IPO, No Cornerstones

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Bloomberg | Lulu Yilun Chen | Sep 23, 2020

Ant IPO review - Ant Plans $17.5 Billion Hong Kong IPO, No Cornerstones

Jack Ma’s Ant Group Co. is seeking to raise $17.5 billion in its Hong Kong share sale and won’t seek to lock in cornerstone investors, confident there will be plenty of demand for one of the largest equity deals in the financial hub, according to people familiar with the matter.

The fintech giant has assessed investor interest, betting it can pull off the Hong Kong portion of the initial public offering without cornerstone investors that are often needed for large deals, according to the people. Ant is leaning toward inviting these big investors for the Shanghai sale to mitigate price fluctuations, the people said, asking not to be identified because the matter is private.

The Hangzhou-based firm is planning to issue new stock equal to about 11% to 15% of the shares outstanding and split the float evenly between Hong Kong and Shanghai, the people added. Ant is mulling what could be the world’s largest IPO, seeking to raise about $35 billion in the dual listing at a valuation of about $250 billion, people familiar have said.

See:  Exclusive: Ant Financial shifts focus from finance to tech services: sources

Plans are still under discussion and could change. Ant declined to comment in an emailed statement.

Cornerstone investors, more common in Hong Kong than in other markets, are usually large institutions that agree to hold the shares for about six months in exchange for a sizable allocation. While the investments boost confidence in the listing company, they’ve been criticized for draining liquidity from the market. Companies that chose to break with the tradition have been burned in the past, including Budweiser Brewing Co. APAC Ltd.

Ant currently has about 27 billion shares outstanding. It’s also planning to issue about 6% of its shares, on top of the new float, to help redeem stock for early C-round international investors that couldn’t invest directly in the onshore entity, according to its prospectus.

For Ant’s Shanghai sale, five companies have agreed to subscribe to the listing via new mutual funds, Ant said in a filing Tuesday. The funds will seek to raise $1.8 billion each, capping Ant’s shares to 10% of the underlying fund assets.

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MarketWatch | Emily Bary | Sep 24, 2020

Ant Group IPO: Five things to know about the Alibaba affiliate aiming for the largest offering in history

Chinese financial-technology juggernaut, known for its Alipay ‘ ubiquitous super app,’ handles payments, insurance, investments and more

Ant Group could be headed for the largest initial public offering in history, as the Chinese financial-technology juggernaut chases a valuation that would rival the biggest payments companies in the world.

See:  Exclusive: China’s Ant aims for $200 billion price tag in private share sales – sources

The Alibaba Group Holding Ltd.–affiliated company controlled by Jack Ma has filed paperwork to list its shares concurrently on the Hong Kong and Shanghai exchanges. Ant, which runs China’s immensely popular Alipay mobile wallet, is reportedly looking to rake in at least $35 billion through an offering that could value the company at $250 billion, according to Bloomberg.

That would make Ant’s offering larger than that of Saudi Aramco, which brought in more than $25 billion in the biggest IPO to date. A valuation of $250 billion would mean Ant is worth more than Bank of America Corp. BAC ($207 billion) and PayPal Holdings Inc. ($213 billion) but less than JPMorgan Chase & Co. ($287 billion), Mastercard Inc. ($336 billion) and Visa Inc. ($427 billion).

The company is best known for its mobile-payments offering, but it aims to be a one-stop financial hub that also provides access to wealth management, investing and insurance services. Analysts view the payments portion of the business as a gateway that brings users in to Ant’s more complex offerings.

Here are five things to know about Ant as it prepares for a public debut.

A sprawling financial empire

Unlike Western mobile wallets, Ant’s platform touches on nearly all aspects of one’s financial life. Ant goes beyond what PayPal and Apple Inc.’s.   Apple Pay do, offering services for everything from payments to credit to insurance to investments within Alipay, which the company calls a “ubiquitous super app.” Ant counts more than a billion annual active users for the Alipay app and 711 million monthly active users.

See:  Global News Radio Interview with Michelle Beyo: Alipay – Moving Money Between Countries

The Alipay app is “synonymous with digital payments in China,” Ant said in its filing. Bernstein analyst Kevin Kwek sees the payments component as a “hook product” for the company that may have limited profit potential but helps the company bring in new users who can then try out more lucrative services.

Tightly linked

Alibaba previously had a profit-sharing arrangement with Ant in which Alibaba received 37.5% of the company’s pretax profits, but Alibaba announced in early 2018 that it would be switching to an equity structure. Now, Alibaba has a 33% stake in Ant through its subsidiaries, a move that analysts thought would help the Chinese e-commerce giant benefit from a potential Ant IPO down the line.

Money machine

Ant generated RMB 120.6 billion ($17.7 billion) in revenue over the course of 2019, up from RMB 85.7 billion a year earlier. The company’s latest annual total consisted of RMB 51.9 billion in digital-payments revenue and RMB 41.9 billion in credit-technology revenue. Ant added RMB 8.9 billion in revenue from insurance technology and RMB 17 billion from investment technology.

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NCFA Jan 2018 resize - Ant Plans $17.5 Billion Hong Kong IPO, No Cornerstones The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Wealthsimple Crypto launches after 130,000 signed up to waitlist

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Wealth Professional |

crypto - Wealthsimple Crypto launches after 130,000 signed up to waitlistRobo-advisor trumpets easy-to-use, transparent and safe product, which is now open to investors

Weathsimple Crypto went live yesterday, with more than 130,000 Canadians having signed on to the waitlist since the product was announced last month.

The digital platform is offering commission-free trading of the two largest cryptocurrencies, Bitcoin and Ethereum, through a mobile trading app. The robo-advisor believes it will make a largely complex and inaccessible asset class more inclusive and easy to use. There is no minimum account size, no charges for deposits or withdrawals, and no extra hidden costs.

Wealthsimple CEO Mike Katchen told WP that its primary arim is to be simple and accessible.

He said: “You don’t need to be an expert in cryptocurrency or blockchain to use this platform. It’s geared toward people who are interested in learning more or dipping their toes into crypto trading. The other big one is that the pricing is transparent. The price you see when you tap buy is what you pay — no extra hidden costs. There’s no minimum account size, and we don’t charge for deposits or withdrawals.

Watch FFCON20 Video: 

Wealthsimple's Road to Regulatory Crypto Approval and What it Means for Fintechs (Blair Wiley, Head of Regulatory Affairs)

“Our platform is also not limited to Canadian exchanges. In Canada, trading volume of crypto is relatively low. That’s why we’ve also worked with a global partner that consolidates the liquidity of multiple exchanges around the world, so our clients have access to lower prices.”

He added there has been a lot of demand and excitement around the product, and that anyone can now sign up and trade. The platform is Canada’s first regulated crypto trading platform, offers real-time quotes, is available on iOS and Android and has the cryptocurrency custodied at Gemini Trust Company LLC.

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NCFA Jan 2018 resize - Wealthsimple Crypto launches after 130,000 signed up to waitlist The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Billionaire investor Ray Dalio on capitalism’s crisis: The world is going to change ‘in shocking ways’ in the next five years

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MarketWatch | Jonathan Burton | Sep 18, 2020

Ray Dalio at world economic forum - Billionaire investor Ray Dalio on capitalism’s crisis: The world is going to change ‘in shocking ways’ in the next five yearsVeteran hedge-fund manager says capitalists don’t divide the economic pie well, so the system isn’t working effectively for all

Ray Dalio certainly is no radical idealist, but in his frequent writings and media appearances the veteran investor consistently calls for Americans to rewrite their longstanding contract with capitalism so that it is fairer and more generous to more people.

Otherwise, he predicts, life in the U.S. could become more difficult: mountainous debt that stunts economic growth; fewer opportunities for ordinary citizens to get ahead financially; and a worldwide lack of trust in the U.S. dollar that diminishes Americans’ purchasing power and could lower their standard of living.

Dalio is the founder of Bridgewater Associates, the world’s largest hedge-fund firm, which has made him a billionaire. So it’s not surprising that he champions capitalism as a proven way to expand economic growth and living standards.

“Capitalism and capitalists are good at increasing and producing productivity to increase the size of the economic pie,” he says.

Then Dalio stands this tenet on its head. Capitalists don’t divide the economic pie very well, he says, and so today the capitalist system, the foundation of the U.S. economy, is not working efficiently and effectively enough for all.

“Capitalism also produces large wealth gaps that produce opportunity gaps, which threaten the system,” Dalio says — a system that has been and still is key to the health and success of U.S. business, workers, government and investors alike.

See:  Greater Capitalism: How the pandemic is currently reshaping America’s economic system for the better

Unless the U.S. takes steps to make systemic repairs designed to provide greater opportunity for more Americans to achieve personal growth and financial security, the consequences likely will be painful for the country, as Dalio explains in this recent telephone interview.

Select Highlights

MarketWatch: You have written and spoken about three big domestic and international problems facing the U.S. over the next five to 10 years and how a failure to address these challenges could threaten America’s standing in the world. What are these three pressing problems?

Dalio: There is a money and credit cycle problem, a wealth and values gap problem, and an emerging great power challenging the existing dominant power problem. What’s going on is an economic downturn together with a large wealth gap and the rising power of China challenging the existing power of the United States.

See:  What do the next ten years hold?

But we haven’t lost all of our competitive advantages. For example in innovation and technology, the United States is still the strongest, but China is coming on very strong and at existing rates will surpass the United States. Militarily, the U.S. is stronger but China also has come on very strong and is probably stronger in the waters close to China that include Taiwan and other disputed areas. Finances for both countries are challenging, but for the U.S. more so. The U.S. is in the late stages of a debt cycle and money cycle in which we’re producing a lot of debt and printing a lot of money. That’s a problem. As a reserve currency status, the U.S. dollar is still dominant though its being threatened by its central bank printing of money and increasing the debt production problem.

MarketWatch: Let’s put it bluntly: Is capitalism broken?

Dalio: I wouldn’t say broken as much as I’d say it has problems that have to be fixed.

The capitalist system is based on profit-seeking being the resource allocation system, which generally works well but doesn’t always.  We now have too much emphasis on distributing wealth and getting it from producing debt and printing money, and not enough from increasing productivity. Wealth cannot be created by creating debt and money. We have to be in this together. The system needs to be reengineered to do this. But if we don’t do this engineering well, we’re going to spend in an unlimited way and deal with that by creating debt that won’t ever be paid back, and we will risk losing the reserve currency status of the dollar.

‘Within the next five years you could see a situation in which foreigners who have been lending money to the United States won’t want to.’

The United States doesn’t have a good income statement and balance sheet in dealing with the rest of the world. It is running a deficit to the rest of the world that is financed by borrowing money so that we are producing liabilities. Our living standards are based on our spending, not on our income statement or balance sheet. If the U.S. loses that ability and it doesn’t force itself to be more productive, one day it will lose that ability to borrow and then will have to cut spending, which is painful.

See:  Three Big Things: The Most Important Forces Shaping the World

MarketWatch: What steps do politicians and business leaders need to take now to create and implement reforms that will fortify the U.S. balance sheet and the dollar’s status?

Dalio: In brief, productivity and equal opportunity are most needed. If we could at least agree that we must have these things, that would be great. What we have now is a situation in which we’re fighting each other, we are not providing equal opportunity, and we are losing our productivity gains.

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NCFA Jan 2018 resize - Billionaire investor Ray Dalio on capitalism’s crisis: The world is going to change ‘in shocking ways’ in the next five years The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Ontario’s Capital Markets Modernization Task force report draws criticism

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Investment Executive | James Langton | Sep 21, 2020

Ontario government building 1 - Ontario's Capital Markets Modernization Task force report draws criticismSweeping recommendations to reform Ontario’s securities laws are facing a barrage of criticism from certain corners of Bay Street.

The Ontario Capital Markets Modernization Taskforce, which began its review of the province’s securities laws in February, published its draft recommendations in July. The task force aims to deliver its final recommendations to the government by the end of the year, despite conducting most of its consultations amid a global pandemic.

The task force’s work has been remarkable for both its speed and its ambition, but critics say the group’s recommendations are ill-conceived, threaten investor protection and could undermine the province’s efforts for more vibrant capital markets.

The task force’s July report proposes a series of reforms largely designed to stoke growth in the capital markets. In addition to the Ontario Securities Commission’s (OSC) traditional priorities of investor protection and ensuring fair and efficient markets, the task force proposes expanding the regulator’s mandate to include an obligation to foster capital formation and competition.

The task force also recommends overhauling Ontario’s existing regulatory structure, easing a variety of constraints on raising capital, remodelling proxy voting and corporate governance, and revisiting enforcement and investor restitution mechanisms.

See: 

CSA Provide Comments on the Ontario Capital Markets Modernization Taskforce Consultation Report

NCFA Response to the Modernizing Ontario’s Capital Markets Consultation Taskforce

Ontario capital markets task force proposes big changes

 

Many proposals set off alarm bells and, given the speed of the consultation process and the number of bold ideas in the report, perhaps that isn’t surprising.

First of all, revising the OSC’s marching orders to include a mandate to foster market growth is sparking concern. The submission from the OSC’s independent Investor Advisory Panel (IAP) warns that expanding the OSC’s mandate could undermine the regulator’s raison d’être, leaving the OSC “in the awkward and unenviable position of being seen as a cheerleader for Ontario’s capital markets when the OSC should more appropriately be positioned as a fair and objective regulator of those markets.”

Even if the government’s top priority is driving market growth, strong investor protection is a prerequisite for attracting capital, the Canadian Coalition for Good Governance (CCGG) cautions in its submission to the task force:

“Reforms that risk eroding investor protection or increasing regulatory burden for investors, risk losing the patient global capital that fuels capital formation over the long term.”

The CCGG, which represents institutional investors that collectively manage $4.5 trillion in assets, states in its submission that a number of the task force’s recommendations — including measures to regulate proxy advisory firms, to give issuers more information on shareholders and to involve the OSC in the handling of shareholder proposals — are “antithetical” to the OSC’s investor protection mandate.

Various submissions propose that several of the task force’s recommendations threaten to diminish investor protection.

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NCFA Jan 2018 resize - Ontario's Capital Markets Modernization Task force report draws criticism The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Federally Chartered Banks and Thrifts May Engage in Certain Stablecoin Activities

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Office of the Comptroller of the Currency, Press Release |  Sep 21, 2020

Stablecoins   - Federally Chartered Banks and Thrifts May Engage in Certain Stablecoin ActivitiesWASHINGTON—The Office of the Comptroller of the Currency (OCC) today published a letter clarifying national banks' and federal savings associations' authority to hold "reserves" on behalf of customers who issue certain stablecoins.

Stablecoins refer to cryptocurrency backed by an asset such as a fiat currency, including U.S. dollars or other foreign currency.

"National banks and federal savings associations currently engage in stablecoin-related activities involving billions of dollars each day," Acting Comptroller of the Currency Brian P. Brooks said. "This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner."

See: 

Stablecoins: Experience the Stability

Visa’s digital dollar concept opens a door to central bank currencies

FFCON20 Video: Future of CBDCs, Digital Assets and Trading

Virtual Panel via Toronto Centre (Apr 17): Using Stable Coins to Facilitate Financial Stability and Inclusion Under Unprecedented Times

The letter responds to questions regarding the application of stablecoin-related bank activities. It concludes national banks and federal savings associations may hold "reserves" on behalf of customers who issue stablecoins, in situations where the coins are held in hosted wallets. The letter addresses the use of stablecoins backed by a single fiat currency on a one-to-one basis where the bank verifies at least daily that reserve account balances meet or exceed the number of the issuer's outstanding stablecoins.

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NEW REPORT: Small Business SOS – It’s Time to Supercharge Local Crowdfunding to Unlock Needed Capital

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SBE Council | Sep 16, 2020

Fund small business recovery - NEW REPORT: Small Business SOS – It’s Time to Supercharge Local Crowdfunding to Unlock Needed Capital

New Report Highlights Investment Crowdfunding’s Success, and COVID-19 Policy Opportunities for Recovery

Today, Crowdfund Capital Advisors (CCA) and the Small Business & Entrepreneurship Council (SBE Council) released a new report detailing the growing power and prevalence of investment crowdfunding and the need for a “Main Street Recovery Co-Investment Fund.”

“We need to act quickly to stop the bleeding on Main Street,” says Sherwood Neiss, Principal at Crowdfund Capital Advisors.

“Short term band aids might slow the trauma, but we need a program that can quickly get capital to local businesses in a way that is supported by local investors. This will create a long-term win that will rebuild and sustain local economies, provide dividends to investors and achieve what Congress is trying to accomplish at the local level,” adds Neiss.

In the report, Regulation Crowdfunding by Congressional District: A Report Card, CCA and SBE Council review the progress of investment crowdfunding since 2016.  The Jumpstart Our Businesses Startup Act (JOBS Act) of 2012 enacted changes that ushered in investment crowdfunding, which officially launched following the finalization of Securities and Exchange Commission (SEC) rules in 2016.

Currently, the SEC is in the process of advancing regulatory proposals that would enable issuers to raise more capital than what is allowed by current caps, and provide for other changes to make Regulation Crowdfunding more accessible and effective for small businesses and startups. In addition, in response to COVID-19, the SEC recently extended temporary rules intended to expedite the offering process for small businesses by providing conditional relief from certain requirements of Regulation Crowdfunding.

See: 

NCFA Response to CSA on NI 45-110 Harmonized Securities Crowdfunding Rules

NCFA Open Letter: Government should collaborate with Fintechs

NCFA Response to the Modernizing Ontario’s Capital Markets Consultation Taskforce

FFCON20 Video:  State of Equity Crowdfunding in 2020

 

As noted in the report, there have been no cases of fraud with investment crowdfunding.

SBE Council president & CEO Karen Kerrigan asserts that innovative solutions like a “Main Street Recovery Co-Investment Fund” are desperately needed to help the nation’s economy dig out of its deep hole, and allow local communities to survive by supporting their businesses and new startups.

A comprehensive approach needs to include a co-investment fund to help local economies recover, rebuild and reinvent themselves. This includes urban and rural areas alike, along with enabling new business creation given the massive volume of business closures that will profoundly affect local communities.

The good news is that this type of fund has been successful in the UK through its Future Fund, which means our government will not be testing a new concept. The co-investment fund injects federal dollars into businesses that have been validated by local investors on regulated platforms, and accountable under an existing federal framework. There has been no fraud since inception,” said Kerrigan.

Under the co-investment funding model, the federal government would match 100% of funds raised from communities via a securities-based crowdfunding platform (not to exceed $250,000 per business). The federal money that is received by small businesses would be paid back. CCA and SBE Council are recommending that $20 billion be allocated to the fund.

U.S. JOBS Act Equity and Debt Crowdfunding Results Since 2016:

● 3,100 stock offerings have been listed by 2600-plus companies.

●  These offerings occurred in 90% of U.S. Congressional Districts (393 districts):

-95% of women-led districts had JOBS Act stock offerings

-93% of minority-led districts had JOBS Act stock offerings

-77% of districts had multiple offerings

-Nearly 50% of districts had campaigns that raised from $250,000 to $5 million

● $500,000,000 has been committed to these offerings.

● 700,000 retail investors participated in diverse offerings across the United States.

● Capital has been delivered to companies in 450-plus industries and across 850 cities.

● This capital has supported over 100,000 JOBS.

● Average amount raised per offering:  $342,000.

● Since inception, the SEC and Crowdfund Capital Advisors have each concluded that there has been NO SECURITIES FRAUD in these offerings.

● Pre-Covid-19: The monthly volume of capital raised in February 2020 was $9 million. During the Covid-19 crisis, the monthly amount raised has increased dramatically.

-In August 2020, the amount of capital raised was $25 million, which represents an INCREASE of 2.8x in just 6 months. Community-focused investing is delivering significant capital to local businesses.

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NCFA Jan 2018 resize - NEW REPORT: Small Business SOS – It’s Time to Supercharge Local Crowdfunding to Unlock Needed Capital The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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What brings more risk to the world stability than a pandemic? Cyber-attacks!

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Roar Growth on Medium | Peggy van de Plassche | Sep 14, 2020

cyber attacks increasing - What brings more risk to the world stability than a pandemic? Cyber-attacks!How to protect our economies and capitalize on the trend

Insights:

1.  Cybersecurity companies will consolidate; valuations are likely to increase as well

2.  Allocating capital to cybersecurity companies (that might become M&A targets or platforms), as well as companies enabling them (in space such as cloud computing and AI) should be on most investors’ radars (even for investors focusing on other verticals than Financial services, as the trend is ubiquitous). Cyber firms transitioning from point solutions to platforms should be high on the list for long term holdings; firms with a deep expertise and niche solutions will be of interest as potential acquisition targets with shorter terms horizons.

FFCON20 Video:  Investor Perspectives: Fintech Now and Future Vision

3.  To get exposure to the potentially outsized returns in the cybersecurity space, allocating capital to funds with deep expertise and track record is a great way in. For those investors who also want to build more direct exposure to the cybersecurity space, they will be able to do so via co-investment rights following investments in private VC/PE funds.

4.  From investor perspective, due to the growing risks associated with cyberattacks, banks are becoming inherently riskier while returns, due to the costs of putting in place solid and holistic cybersecurity strategies, are decreasing. This emerging trend has not yet permeated most analysts’ reports, despite its inexorability. Investors will have to get smarter re cybersecurity when allocating capital in the financial services space. The silver lining would be for the bank(s) taking the lead in packaging and commercializing their cybersecurity capabilities, as well as for the one(s) willing to lead the creation of a cybersecurity industry utility.

5.  The risk-return profile of existing Fintechs is negatively impacted by the increased cyberthreats (and similar to banks, investors have not yet discounted this dynamic in their valuation process). Once the de-rating exercise takes place, it could create more barriers to entry when it comes to launching new Fintechs (on top of requiring to raise more capital to address the cybersecurity conundrum). The opportunity for some Fintechs to pivot and commercialize their cybersecurity capabilities might in some cases provide a great avenue.

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