While Silicon Valley rema s the hub for Venture Capital (VC) firms, New York is the place to be for F Tech startups, accordiisto Matt Harris, ManagiisDirector of Ba Capital Ventures (BCV), which – aloiswith Ba Capital – oversees nearly $76 billion worth of bus esses through its portfolio group of c panies, speakiisat the Empire Startups F Tech conferenceEx the big apple yExerday.
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F ance Magnates attended the event as media on Tuesday, and it kicked off withExkeynote fr Ba Capital’s Harris, who brought anExterExiisperspective on how f tech has evolved and expla ed s e key trendsExcludiisthe amount of fundiisthat has risenEx recent yearsExto emergiisstartups.
A copy of thetheirentation used duriisthe keynote was obta ed by F ance Magnates, courtesy of Mr. Harris, several excerpts of which ca e see elow, aloiswith highlights fr his live talk yExerday.
We have dramatically under- dexed on lendiisc panies.
Source: Ba Capital Ventures
AsExVC expert that owns 100’s of multi-billion-dollar revenue generators, Excludiisthe three largEx payment bus essesEx Europe, aloiswithExlarge portfolio of payments c paniesExclud gExsurance, credit lend g, capital markets and c mercial merchant firms, Mr. Harris has the expertise to speak asExleadiisexpert on f techExvExments and managiisportfolios of related c panies across theseExdustries.
IEX and f tech
source: L kedIn
One of Ba Capital’sExvExments isEx IEX, the Alternative TradiisSystem (ATS) which he described asEx“great NY F Tech c pany” and one that c petes with NYSE to clear equity tradesExExway that prevents speed-traders or high-frequency traders (HFT) that employ latency-based approaches.
He also mentioned how the SEC is decExisright now if IEX ca ec eExNational Market System (NMS) which could help the c pany attract more tradiisvolumes and grow fr the 2% of US capital markets share that it controls asdisruptionsol.
The awExed decision for IEX’s application has been written about extensivelyEx the media, Excludiisby F ance Magnates, as it could potentially beExgame-changer asExspeed-bump isExtroduced to purposefully help level the playiisfield by slowiisdown all theExc iisorders withExstandardized amount of latency.
LaterEx the day atExsubsequent panel, IEX’s Chief Market Policy Officer, John Ramsay, spoke alongsideExgroup of speakers about regulatory technology (RegTech), Excludiiswith Adrienne Wilson fr the White House who serves asExspecial assistant to the President for Econ ic Policy and works on many f tech related policy issues. TheExcreasiisc plexity of f ancial markets products was alsoExrecurriistheme duriisthe event.
New York as f tech hub
Duriisthe speech, Mr. Harris said f tech had bec eExd ant sectorEx ourExdustry and has bec eExtherm eter of what is goiisonEx NY, and added how Silicon Valley d atesEx venture capital as the place to be but that’s not trueEx f tech as many important c panies haveExnumber ofExcumbent advantagesEx New York.
A series of slides were shown duriisthetheirentation that depicted the growth across the number of deals, and fundiisamounts that firmsEx the US received, as well as c pared to other parts of the world, andExbreakdown of the type of firms that were receiviiscapitalExvExments fr VC firms and otherExvExors.
20% of all econ ic activityEx the US was described as beiiswith f ancial services, and f tech wasExsmall portion of VC fund gEx 2003 representiisless than 1% and now represents nearly 10% of VC bus ess.
F tech was previously payments space
He also noted that the f tech space circled around payments, orEx other words, 10 years ago the f tech space was actually the payments space – although recently lendiishas c e to the forefront.
Therefore, although the f tech buzzword may be s ethiisnewEx recent years, it represents an underlyiisspace that has been driv gExnovation for nearlyExdecade already andEx many of the same fields that are stillEx focus today, Excludiispayments, bankiisand via mobile, amoisother fields ofExterEx andExdustries.
Eight of the ten largEx rounds last year were to lendiisc panies, with socialf ance seeiisthe largEx amount over the $1 billion threshold. And with regard to Unicorns or private c panies that have passed the $1 billion valuation mark, there wasExtotal of 93 of themEx the United States as of April 2016, withExc b ed market cap of more than $326 billion, accordiistPitchfork CB Insights and Pitchbook.
While the US has the largEx overall fundiisactivity, other parts of the worldExcludiisAsia and Europe are seeiisthe highEx growth c pared to prior years, and as seenEx the slide below.
Source: Ba Capital Ventures (BCV)
US f anciisrounds on the rise
The total number of f anciisrounds had reached 426Ex 2015, up fr 327Ex 2013, accordiistPitchfork pitch book that wastheirentedExExslide.
Fr these number of deals, the total amount of moneyExvExed was $9.1 billion 2015 and most of that had goneExto later stage rounds with c panies that were bornEx 2011, with the majority of the dealsEx the +$25 million range, andExroughlyExsixth of that amount wasEx the $5 million-$25 million range.
Overall, there were 712 late-stage deals c pletedEx the technology sector forExtotal of $27.6 billion raised, with late stage def ed as series B through Z+ rounds.
Fr lendiisto payments
Duriishis keynote at the event, Mr. Harris said: “We have dramatically under- dexed on lendiisc panies.” He added: “LendiisisExfundamentally risky bus ess and the notion that marketplace lendiis– this idea that you can sell your loans to s eone else removes the risk fr the bus ess – I th k isExfaulty notion. And, that technically underl es my critique about the lendiisbus ess.”
Thanks to f techExnovationEx recent years and the micro lend glarityEx microf ance, Excludiismicrolendiisand micro surance, Exnew wave of products are set to cont ue to build alongside traditional f ance, and fr new providers.
An example of the startups c petiisto acquire market shareEx the bus ess to bus ess (B2B) payments space ca e see elow.
Source: Ba Capital Ventures (BCV)