This document discusses opportunities in the growing fintech sector. It notes that fintech is experiencing strong growth globally, driven by shifts to mobile banking and the rising millennial generation. New entrants in payments, lending, investments and other areas are achieving scale, while traditional banks and insurers are also increasingly investing in technology. The document argues this presents opportunities for strategic investors to capitalize on trends in digital payments, alternative lending, wealth management technologies, and more.

1. Fintech Fixes…
& Fortunes

2. Sector Focus
Strategic
Investors &
Advisors
Average Initial Investment
< $1 Million
$40 Million
Venture Fund
Early Product-
Market Fit

3. Dan Rosen

4. STRONG DEAL FLOW

5. DAN RAVEH
Vice President
Google
Viola Private Equity
Wharton MBA
Our Team
*Employees of Aduro Advisors, which provides Commerce Ventures’ back offices services
NIKHIL RAJ
Venture Partner
Walmart
Kosmix
Harvard MBA
BRAUGHM RICKE
CFO*
True Ventures
About.me
UC Davis
ANDREAFITZHENRY
Executive Assistant
Highland Capital
Sullivan & Cogliano
MCLA
SHELLEY RUBINO
Controller*
Deloitte
KeyCorp
Univ.Of Akron

6. PETE KIGHT
(Acquired for $4 BILLION by Fiserv)
BOARD MEMBER:
FOUNDER / CEO

7. EDUARDO CASTRO-WRIGHT
CEO / VICE CHAIRMAN

8. SCOTT THOMPSON
PRESIDENT / CEO
BOARD MEMBER:

9. SCOTT THOMPSON
CEO, ShopRunner
CEO, Yahoo!*
President, PayPal*
PETE KIGHT
Vice Chair, Fiserv*
Founder & CEO,
CheckFree (IPO)*
ANIL AGGARWAL
Chairman, Money2020
CEO, TxVia (Acq’d by
Google)*
CEO, Calrity (Acq’d)*
TOM LITLE
CEO, Litle & Co (Acq’d by
Vantiv)*
Founder, Industry
Ventures*
ERIC DUNN
EVP Payments, Intuit
Early CFO & CTO,
Intuit*
SCOTT SHAW
Vice Chair, Kessler
Group
Investor: Ozumo,
Usushi, Aliaswire
SCOTT LOFTESNESS
Partner, Glenbrook
GM, First Data Merchant
Services*
Strategy & Int’l, Visa*
VINCE PASSIONE
CEO, LendKey
COO, DealerTrack*
President, AmeriTrade*
KAREN WEBSTER
CEO, Market Platform
Dynamics
President, PYMNTS.com
Our Network
MIKE WALSH
CEO, CyberSource
(Acq’d by Visa)*
Advisor, Warburg Pincus
GREG COHEN
President, iPayment
CRO & CSO, Cayan*
President, Moneris*
JOHN MCDONNELL
CEO Bitnet
VP, BD at CyberSource
(Acq’d by Visa)*
EDUARDO CASTRO-
WRIGHT
Vice Chair, WalMart*
CEO, WalMart, USA*
TODD KRASNOW
Highland Consumer
SVP Marketing,
Staples*
*Indicates previous position

10. CORPORATE INVESTOR 1
•Largest issuer of prepaid debit accounts
in the U.S. (75 million cards in circulation)
•$232 billion of annual payment volume
•Customers include:

11. CORPORATE INVESTOR 2
•Leading provider of tech and processing
to the financial services industry
•$5 billion in 2014 revenues
•Leader in electronic bill pay and ACH
processing, moving $1 Trillion each year
•Account processor for 1/3 of all U.S. FIs
•Power 145 million deposit accounts and
75 million online banking users

12. CORPORATE INVESTOR 3
•5th largest homeowners insurer, 6th largest
auto insurer
•8th largest U.S. credit card issuer, 26th
largest bank
•Over 10 million members
•$25 billion of net worth
•Top-ranked bank in Net Promoter Score

13. STRONG DEAL FLOW
• LOTS OF IT
• 1000+ investment opportunitiessince launch
• EARLY STAGE
• 99% Seed or Series A
• PROPRIETARY
• 65%+ of opportunitiesfrom proprietary sources
• RELEVANT
• 90%+ of deal flow in FinTech & Commerce
CONFIDENTIAL

14. UNIQUE FUND 1 PORTFOLIO

15. $0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$35 Million
$80 Million
$141 Million
$281 Million
2013
ACTUAL
2015
EXPECTED
2016
PLAN
2014
ACTUAL
NOTE: Includes all revenues from entire active portfolio
PROMISING RESULTS
STRICTLY CONFIDENTIAL

16. WHAT’S GOING ON IN FINTECH?
CONFIDENTIAL

17. FINTECH IS EXPLODING…

18. …AND NOT JUST IN U.S.

19. ...AND NOT JUST BY VCs

20. INCUMBENTS ARE ENGAGED
CONFIDENTIAL

21. ...SO EXITS ARE STRONG

22. ...FINTECH IS HOT!!

23. WHY?
CONFIDENTIAL

24. SHIFT TO MOBILE BANKING
50
60
70
80
90
100
110
2013 2014 2015 2016
MILLIONS OF U.S. ADULTS USING MOBILE BANKING

26. •72 million Americans, 18-34
•85%++ own smartphones
•Digital (Mobile) vs. Physical
•Personalized vs. Broadcast
•$1 Trillion of student debt, BUT…
•Will account for $10T of lifetime
purchasing power
MILLENNIALS

27. MILLENNIALS

28. MILLENNIALS

29. MILLENNIALS

34. BIG BANKS INVESTING
US Banks to spend $62B on IT
in 2015
•Top 4 U.S. Banks EACH spend $7-10 billion
annually on Technology
SOURCES: Celent, Information Week, Bloomberg, WSJ

36. NEW ENTRANTS:
12M+ users
10M+ users
CONFIDENTIAL

37. CONFIDENTIAL
NEW ENTRANTS:

38. CONFIDENTIAL
NEW ENTRANTS:

39. OPPORTUNITIES
CONFIDENTIAL

40. CONFIDENTIAL

41. CONFIDENTIAL
SECURITIZATION FAILED…

42. …ALT LENDING AROSE

43. PLATFORMS SCALING
$5B Market Cap, $7B in 2015 loans
$355M equity, $7B in H1 2015 loans
$1.4B equity; $400M of debt
$660M Market Cap
$240M of equity; $360M debt
CONFIDENTIAL

44. UNDERSERVED: 401(k)
$5 trillion of defined
contribution retirement assets
• Only 5%of fiduciary advisors actively involved in 401k
advice
CONFIDENTIAL

45. RISE OF “ROBO-ADVISORS”
$130M raised, $2B+ AUM
$103M raised, $1B+ AUM
$105M raised, $2.5B+ AUM
$30M+ raised, $300B tracked
Acquired by BlackRock

46. PAYMENTS: GROWING
SOURCE: McKinsey

47. MERCHANT ACCEPTANCE
$4B mkt cap, $30B+ volume
$280M raised, $10B+ volume
$30B+ volume (Acq’d $800M)
$1B+ volume, just raised $40M
$266M raised, $25B+ volume
CONFIDENTIAL

48. PAYMENT FRAUD EXPLODES
SOURCE: Nilson

49. INVESTING IN PROTECTION
CONFIDENTIAL

50. BTW, B2B FINTECH IS HOT…
Just raised $225M
Just raised $111M
Just raised $100M
Just raised $80M
Just raised $50M
$129M raised
CONFIDENTIAL

51. …AND SMBs NEED CREDIT
SOURCE: FDIC
Volume of <$250,000 Loans(U.S.)

52. SMB LENDING
$93M of Equity, $650M of Debt
$240M of equity; $360M of Debt
$660M Market Cap
Just raised $50M

53. DATA: BIG & EXPLODING

54. •Big Data technology market expected to
reach $38 billion this year
•Financial Services is one of the largest
spenders on big data technologies for Credit,
Risk, Fraud Prevention, CRM, Capital Markets
BANKS NEED HELP

55. •By 2016, 25% of the Top 50 global banks
will have launched a banking app store for
customers
•Europe adopts PSD2 opening up txn data
•Yodlee supports 27 million daily API calls
•Aggregation supports thousands of apps
servicing 10’s of millions of users
APIs & OPEN BANKING
SOURCES: Gartner,Yodlee

56. •Spend & invest app (think
BofA’s Keep The Change)
•Built on aggregation APIs
•Live 1 year
•650,000 members
•Mostly millennials
•$25++ million of savings
CASE STUDY: ACORNS

58. 126 Fin Tech startups targeting Millennials
have raised
$2.3 Billion
MILLENNIAL BANKING

59. DIGITAL CURRENCY

60. 2014: $335M OF VC FUNDING
Just raised $75M
Just raised $116M
Just raised $30M
Raised $40M last year
Raised $30M last year
Raised $30M last year
Just raised $50M
CONFIDENTIAL

61. SPECULATORS EXITED

62. BUT LATELY, PRICE IS UP
SOURCE: CoinDesk

63. …STEADY USAGE GROWTH
SOURCE: Blockchain.info

64. INSURANCE TECHNOLOGY
Insurers will spend
$175 billion
on IT spending in 2015
SOURCE: Celent

65. IS DRAWING VC DOLLARS

66. INVESTING IN FINTECH
CONFIDENTIAL

67. VC INVESTING 101
•Team
•Market
•Product
•Financial

69. ECONOMIES OF SCALE

71. BANKING = ECO-SYSTEM

76. Questions?
Dan@CommerceVC.com
+1 (415) 500-5352
@VentureDan
CONFIDENTIAL