Data Science. Credit Scoring. Digital Finance THE MOST INNOVATIVE - - PowerPoint PPT Presentation
Data Science. Credit Scoring. Digital Finance THE MOST INNOVATIVE TOP-2 TOP-50 INNOVATION BEST LENDING 100 HOTTEST IN CREDIT SCORING FASTEST GROWING FINTECH FASTEST GROWING LEADER PLATFORM STARTUPS IN EUROPE SERVICES COMPANY IN EUROPE
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THE MOST INNOVATIVE IN CREDIT SCORING SERVICES
INNOVATION LEADER 2017 BEST LENDING PLATFORM 2017 TOP-2 FASTEST GROWING FINTECH COMPANY IN EUROPE April 2018 TOP-50 FASTEST GROWING COMPANY IN EUROPE March 2018 100 HOTTEST STARTUPS IN EUROPE September 2018 September 2018
2 MARKET OVERVIEW AND COMPETITORS LANDSCAPE PRODUCT & IT KEY FINANCIALS AND FUNDING STRATEGY 3 4 2 EXECUTIVE SUMMARY 1
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Industry: digital consumer finance
: 300+
Mexico) LEADING INTERNATIONAL FINTECH COMPANY
Global Expansion: Europe and LatAm Company Overview
ES 2015 (HQ) PL 2015 BR 2016 MX 2017 BL 2012 (R&D hub)
Key Business Highlights
trong fin financial pe performance: − $33m revenue for 9m18 (197% growth vs. 9m17) − $64m issued for 9m18 (142% growth vs. 9m17) − $55m gross portfolio in Sep-18 (175% growth vs. Sep-17) − $55m annual re revenue after 3 years of operations, plans for 2019 - $135m (including $6m credit card revenue)
Rapidly gro growing cus ustomer ba base: : 1.2 .2m registered users as at Sep-18 (168% growth vs. Sep-17)
fully in in-house IT IT pla latform and international expertise
18 18 55 55 135 135 256 256 423 423 633 633 92 92 610 610 1 1 20 202 2017 2018F 2019F 2020F 2021F 2022F
Loans Credit cards
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LEADING INTERNATIONAL FINTECH COMPANY
Our successful tractions was proved by top Recent Selected Awards
Fastest growing fintech company in Europe Fastest growing company in Europe 100 hottest startups in Europe
To build number one online consumer lending pla latform across Europe (Poland, Spain) and LatAm (Brazil, Mexico) To launch ne new consumer pr products:
Our strategy
c.20,000 new registered users weekly
Key Numbers Empowering underbanked to become financially included and live better lives by offering flexible, technology-empowered financial products Our mission
The most innovative in credit scoring services
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RAPID GROWTH EMPOWERED THROUGH EFFECTIVE SCALING STRATEGY
Centralised IT IT and ris risk- in infrastructu ture Avail ilabili lity ty of f fu funding Pro rofessional and moti tivate ted glo lobal and lo loca cal te team
2017 2018 2019 2020 2021 2022
Net Loan Portfolio Launch in Europe LatAm expansion Product diversification Further scaling
Hired team Launched unsecured lending
Expand product range:
balance)
Created pool of loyal customers
card business
in other countries
2016
$1.3bn $2.5bn
$1 $109m
$364m
$36m $36m $13m $13m $3m $3m
Consumer loans Credit cards
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GLOBAL TEAM OF FINANCIAL SERVICES AND TECHNOLOGY EXPERTS
Co-founder, CEO
15+ years of work experience in banking Previously held various positions at Deutsche Bank, Renaissance Capital and RBS in London and Moscow Graduated from Cambridge University with a degree of Master in Economics
Co-founder, COO
10+ years of experience in banking and finance Previous experience: Deutsche Bank, London Holds Chartered Financial Analyst degree Graduated from Imperial College with a degree
Chief Financial Officer (CFO)
19+ years of experience in financial services Previous experience in General Electric and Standard Chartered Bank Graduated from ESADE University (Barcelona, Spain) with a degree of MBA
Chief Risk Officer (CRO)
10 years of work experience in risk management Previously worked as Head of Russia & CIS Experian Analytics Graduated from Moscow State University of Economics, Statistics and Informatics
Chief Marketing Officer (CMO)
11 years of professional experience in Digital Marketing and international IT Projects Previously developed online internet businesses B2C, B2B and P2P in Spain – Ulabox, Logismarket, Socialcar, worked in MNC (Nestlé) and in early stage startups Graduated from Padova University with a Master in Industrial Engineering and Business Administration
Country Manager (Mexico)
20+ years of experience working for financial multinational companies. Previously held senior management positions in Servicios Financieros con Valor, Pretmex and Fullerton Financial Holdings Certified in Financial Institutions for Private Enterprise Development at Harvard Kennedy School Post Graduate Certificate in Corporate Finance at Universidad Intercontinental
30+ years of management experience in banking and finance Served as CEO of 4finance Holds senior roles at Standard Bank Group, MDM Bank and Renaissance Group
Board member Country Manager (Brazil)
12+ years of experience in financial services Previous experience in Asset Management industry as well as in Enova (multinational
Operations Manager and Security Asset Graduated from Duke University at North Carolina, USA, with a degree of MBA (Operations and Strategy)
7 MARKET OVERVIEW AND COMPETITORS LANDSCAPE PRODUCT & IT KEY FINANCIALS AND FUNDING STRATEGY 3 4 2 EXECUTIVE SUMMARY 1
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33% 33% 37% 37% 37% 37% 40% 40% 42% 42% 52% 52% 69% 69% World average Spain Australia Brazil UK India China
$40 bn revenue by 2028 (BR+MX) Money transfer & payments
*Adoption is a percentage of respondents in each market who reported using one or more FinTech service in that category. Calculated based on survey prepared by E&Y in 2017
FinTech adoption* (world), 2017 Adoption in Brazil is anticipated to grow up to 69 69%* Insurance Savings & Investments Financial planning Borrowing The major FinTech categories
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70 70 79 79 89 89 100 100 113 113 127 127 142 142
$0 $20 $40 $60 $80 $100 $120 $140 $160 2016 2017 2018 2019 2020 2021 2022
Transaction volumes on LatAm FinTech market ($bn)
Actuals Forecast
Sources: Statista, E&Y survey (2017), Goldman Sachs
303 303 648 648 802 802
2008 2017 2022
Sources: EIU, Goldman Sachs, Central bank of Brazil, ID Finance
Household loans in Brazil and Mexico, $bn
with 7% CAGR expected in Brazil and Mexico
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Low competition: 5 banks controlling c. 80% bank assets which results in the world’s third highest borrowing costs Outdated technology: offline and bureaucratic business processes
Internet and mobile penetration increases: Brazil is the fourth-largest by number of smartphone users in the world (80 mln) New distribution channel for financial services makes “branch”-banking obsolete Only 14 bank branches per 100,000 inhabitants and only few small alternative consumer lenders (Kueski, Kubo, Albo, Prestadero) cause strong demand in banking services Young, educated, tech-savvy and financially literate generation enters the period of greatest productivity Structural reforms, fiscal discipline, falling nominal interest rates will unlock GDP growth during next 2 years >50% 0% Brazil & Mexico population is underbanked
Economic recovery Demographic bonus Underbanked population Technology disruption Arising Mexican market Uncompetitive banking services
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5 10 15 20 25 30
Monthly transactions made by credit cards, $bn Credit card outstanding balance, $bn
30% 12% 16% 4% 3% 35% ITAU Banco De Brazil Bradesco Santander Caixa Other
$61bn
Top 5 players represent 65%
Sources: MarketLine, ABECS, Companies’ Reports, ID Finance analysis
55 61 67
Forecast
* Interest free transactions, associated with an instalment plan or not. ** Regular instalments (non interest free) only. *** Includes cash withdrawals
20 40 60 80 Revolving*** Financing** Non-financing*
Annual Monthly Major traditional banks Banco do Brasil 195.7% 9.5% ITAU Unibanco BM 218.3% 10.1% Caixa 252.4% 11.1% Santander 254.8% 11.1% Bradesco (Brasil) 255.0% 11.1% Average (major banks) 235.2% 10.6% Digital nature banks (certain examples) Banco Inter 95.8% 5.8% Banco Original 369.4% 13.8% Agibank 514.2% 16.3% Nubank n/d 2.8%-14.0% Next n/d 15.1%
Statistics on interest rates
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933 933 1,0 ,079 1,1 ,129 1,1 ,161 1,2 ,212 1,2 ,281 1,3 ,362
$0 $500 $1,000 $1,500 2016 2017 2018 2019 2020 2021 2022
537 537 583 583 633 633 687 687 747 747 811 811 880 880
$0 $200 $400 $600 $800 $1,000 2016 2017 2018 2019 2020 2021 2022
Transaction volumes on European FinTech market ($bn)
Actuals Forecast
Sources: Statista
Key European market trends
Sources: EIU
Household loans in Spain and Poland, $bn
consumer loans
(2017-22) expected in Spain and Poland Spa pain and Poland constitute only 8% 8% of European FinTech market Europe has world average adoption of 33% with Spa pain in in To Top-6 markets wit ith th the hig ighest Fi FinTech adoption. The level is expected to grow from 37% 37% to 56 56% Investment in venture capital is growing with $4.7bn in invested in in 2017 Shift in investment from main financial hubs (London, Germany, France) to Central and Eastern Europe as more rapidly growing underdeveloped fintech markets The Central and Eastern fintech market is worth an estimated €2.2 billion ($2.6 bil illion)
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Disruptive Consumer Focused Digital Banks (globally) Equity raised to date
R$567mln vs. R$170.mln in 2016. Net losses: R$117mln in 2017
$707m
exchange, then expanded into banking by offering current accounts, now plans to launch commission-free trading service. In 2017 applied for a EU banking license.
$340 340m
$480 480m
begun rolling out its current accounts
$140 140m
them to see their money from a new perspective
$190 190m
international money transfer, investment, overdraft, and cash withdrawal and deposit at stores.
$210 210m
Pro rofessional te team Acc ccess to to fu funding Loyal clie client t base
ID Finance unlocks talent pools in countries outside LatAm and shares international expertise ID Finance may use internally generated income to scale and grab market share ID Finance may leverage existing loyal customer base offering new banking products and driving LTV up
14 MARKET OVERVIEW AND COMPETITORS LANDSCAPE PRODUCT & IT KEY FINANCIALS AND FUNDING STRATEGY 3 4 2 EXECUTIVE SUMMARY 1
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WE TARGET PEOPLE LIVING IN LARGE CITIES WHO ARE UNDERSERVED BY TRADITIONAL BANKS
Geographical expansion strategy Disposable income 25-45 years old Age
monthly for LatAm and EUR1500 for Europe Availability of product across the whole countries presence Has a smartphone Active card user Has bank account, but partially underbanked Active loan users Have/had any loan
mortgage…)
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WE PLAN TO OFFER A RANGE OF FINANCIAL SERVICES ON A FULLY MOBILE PLATFORM IN LATIN AMERICA
ACQUISIT ITION
Develop unsecured lending and build up loyal customer base
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RETENTION
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Collect data, monitor and instantly address issues to increase retention and lower churn
Ste teps:
NEW PRODUCTS
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Offer new products to existing customers – credit cards, payments, FX etc.
In LatAm, ID Finance plans to … ... develop existing products … launch new consumer products
lending platform across Europe (Poland, Spain) and LatAm (Brazil, Mexico)
consumer lending know-how
$
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HIGHLY EFFECTIVE CLIENT ACQUISITION AND RETENTION STRATEGY
Te Term APR APR Europe: $25 - $1900 LatAm: $50 - $750 Lo Loan an siz size Europe: 50% - 100% annually LatAm: 15% - 30% per month 1 – 12 months
(vs. 81k for 9m17)
Conversion to applications Approval rate Retention rate
Client Acquisition Funnel (for 9m2018) Product overview
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PROPRIATERY IT PLATFORM AND IN-HOUSE IT TEAM
Web and mobile application Ongoing IT-support High Technologies Park Dedicated developme nt team
Proprietary developed IT platform makes personal banking services available for thousands of active mobile users automazing regular banking activities Highly efficient org structure:
end developers
Using user-centric approach constantly improve usability, accessibility, empower high-quality visual designs and front-end development
Technology
1 3 6 2 5 4
Located in the center of IT innovations - Belarus High Technologies Park
Flexibility
In-house developed IT infrastructure allows IDF to adapt to changing fintech market conditions faster than competitors
Top-25 IT companies in Belarus*
Chief Technical Officer (CTO)
13 years of experience in software development, including development of high-load applications and financial systems Previous experience: Lead developer at Itransition Graduated from Belorussian State University * dev.by
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Credit history Internet presence Fraud prevention Behavioural data 1 2 3 4
The data ta-driven clie lient t assessment t of th the clie lient t is is key to to a a ro robust t cre redit t ris risk management t fra ramework
ID Finance uses market leading risk-management solutions, in addition to proprietary technology empowered capabilities
20 MARKET OVERVIEW AND COMPETITORS LANDSCAPE PRODUCT & IT KEY FINANCIALS AND FUNDING STRATEGY 3 4 2 EXECUTIVE SUMMARY 1
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4 18 55 136 349 1 034 1 838
200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM X16 GROWTH IN 4 YEARS
Reveune ($m)
CAGR (2017-22)
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0,0 ,04 0,1 0,3 0,7 1,5 3,6 5,5
0.0 1.0 2.0 3.0 4.0 5.0 6.0 2016 2017 2018 2019 2020 2021 2022 Lending: Europe Lending: LATAM Credit Cards: LATAM
X45 GROWTH (2017-22)
Number of loans/cards issued (mln), cumulative and growth (2017-22)
Net loan portfolio ($m)
CAGR (2017- 22)
3 13 13 36 36 109 364 364 1355 2563
500 1,000 1,500 2,000 2,500 3,000 2016 2017 2018 2019 2020 2021 2022 Lending: Europe Lending: LATAM Credit Cards: LATAM
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STRONG UNIT ECONOMICS
247 247 247 247 247 247 107 107 107 107 107 314 314 314 314 385 385 385 608 608 175 1837 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Interest income Interest expenses Provision and write off Operating expenses Administrative expenses Tax expenses Net income
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0.0 0.0 0.0 100.0 0.0 100.0 0.0 10.8 16.7 23.8 60.0 286.8 997.8 1,142.6 36% 13% 14% 15%
0% 5% 10% 15% 20% 25% 30% 35% 40%
200 400 600 800 1,000 1,200
2016 2017 2018 2019 2020 2021 2022
New equity additions, US$m New debt issuance, US$m Capital adequacy ratio
ACTIVE SCALING WHILE KEEPING HEALTHY LIQUIDITY RATIOS
12% - minimum acceptable level
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Co-founder, COO @ ID Finance
Alexander.dunaev@idfinance.com
Co-founder, CEO @ ID Finance
Boris.batin@idfinance.com
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regulation or which would require any registration or licensing within such jurisdiction.
is made as to the accuracy, completeness or fairness of the presentation and the information contained herein and no reliance should be placed on such information.
facts, including, without limitation, any statements preceded by, followed by or including the words “targets”, “believes”, “expects”, “aims”, “intends”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the company’s control that could cause the company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward- looking statements are based on numerous assumptions regarding the company’s present and future business strategies and the environment in which it will operate in the future. These forward-looking statements speak only as at the date of this presentation. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.