Presentation from our meeting on 2DEC16

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Silicon Valley FinTech/InsurTech
Presentation to ICICILombard
December 2, 2016
Mike Sigal
EIR & PARTNERSHIPS
mikes@500.co
*Please Do Not Distribute

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Historically, winners are rare
• 1-2% return 50-100x+ (“Unicorns”)
• 5-7% return 10x-50x (“Centaurs”)
• 10-20% return 3-5x
• 65-70% return 0-1x
Early indicators are clear if you know the KPIs
Talent & Opportunity is distributed globally

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// Most Active Seed Investor in the World since 2010
$250M+
AUM
1700+
Investments
50
Countries

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The title “Partner” is used in accordance with customary business practice in the venture capital industry and does not indicate a legal status as a “partner” in a partnership.
Headcount includes employees, interns, and contractors as of May 31, 2016.
Dave McClure Christine Tsai
FOUNDING PARTNERFOUNDING PARTNER
Khailee Ng
MANAGING PARTNER
Bedy Yang
MANAGING PARTNER
SOUTHEAST ASIA LATIN AMERICA
500 Startups Management & Investment Partners
130 people, 18 countries
Hasan Haider
MIDDLE EAST
Santiago Zavala
LATIN AMERICA
Rui Ma
CHINA/SF
Marvin Liao
SF
Elizabeth Yin
SILICON VALLEY
Edith Yeung
SF
Sean Percival
NORDICS
Tim Chae
SOUTH KOREA
James Riney
JAPAN
Sheel Mohnot
SF
Pankaj Jain
NYC/INDIA
Matt Lerner
UK
Krating Poonpol
THAILAND
Natavudh Moo
Pungcharoenpong
THAILAND
Binh Tran
VIETNAM
Rina Onur
ISTANBUL
Mat Johnson
SF
Eddie Thai
VIETNAM
SILICON VALLEYGLOBAL / SILICON VALLEY
25 yrs in SV as
entrepreneur + investor
Early Googler, strong
operational experience
Founded and exited two
startups
Recognized by Forbes as a
multi-lingual, startup
community leader

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4 Unicorns ($1B+ in valuation)
30+ Centaurs ($100M ~ $999M in valuation)
* indicates companies that have already exited
A Selection of Current Portfolio Wins
* * * * * *
Companies are a select sampling of investments across 500 Startups funds and will not be held in Fund IV. While Fund IV has not invested in the rounds of financing shown on this slide, at
least one 500 Startups fund has invested in one or more rounds of financing for each of these companies. The valuations listed herein are estimated as at 12/31/2015 based on 500
Startups Valuation Policy as set out in the Appendix to this presentation. These numbers provide a snapshot of estimated valuation as at a particular time and may change. Further detail
with regard to financing of companies listed on this slide can be found on Crunchbase.

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/ How We Deploy Capital
General Investment Strategy of All Funds
• $50-150K First Check, $150-500K Follow On Checks
Selection Criteria – Data-Driven Process Based on Pre-defined Metrics
• Functional prototype (or previous product success) that solves a specific customer problem
• Scalable internet-based distribution (search, social, mobile) or proven ability to scale sales
• Capital-efficient business; operational at less than $1M in external financing
• Measurable traction: engaged users, some revenue, and attractive unit economics
• Cross-functional team with design, engineering and marketing expertise
Investment strategy and criteria represent current investment model and may vary at the discretion of the 500 FinTech general partner. Terms noted on this slide may vary by investment.
Accelerator
Seed
Distro
Follow-On
Angel Pre-Seed Seed Post-Seed Series A/B Growth

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/ 500 Startups Family of Funds
Global Funds
Fund IV – Flagship
500 Mobile Collective
500 Fintech
Regional Funds
500 Canada
500 Falcons (MENA)
500 Istanbul (Turkey)
500 Kulfi (India)
500 Kimchi (Korea)
500 TukTuks (Thailand)
500 Startups JP (Japan)
500 Startups Vietnam

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/ World-class Accelerator is a critical success factor
Accelerator Overview
• 4-month program in Silicon Valley (4 cohorts / year)
• $150K investment for 6% equity
• Overall: >1500 applications > 250 interviews > 40 accepted = ~3% acceptance
• Fintech: >300 applications > 10-15 startups/batch
• Many post-launch, revenue-generating companies (no “idea-only”)
Investment strategy and criteria represent current investment model and may vary at the discretion of the 500 FinTech general partner. Terms noted on this slide may vary by investment.
Accelerator
Seed
Distro
Follow-On
Angel Pre-Seed Seed Post-Seed Series A/B Growth

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// Accelerator Deliverables
Community
Advice
Curriculum
Support Connections Money

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CONFERENCES + EVENTS1
TEAM
MEMBERS
More than 50 events with 300-1,000 attendees per
event, for a total reach of over 35,000 people in
person + digital channels
Design, technology, marketing,
and product experts from
top companies in Silicon Valley
and elsewhere
From 50+ countries around
the world, our founders provide peer
review and feedback on products,
industry verticals, platforms, etc.
250+ 3,000+
MENTORS FOUNDERS
7
ATTENDEES
35,000
EVENTS
50+
1. Conferences and Events are produced by 500 Startups Incubator, L.L.C. The 500 Startups funds do not participate in any revenue generated by these activities
2. The numbers represented on this page provide a snapshot of some of our Community-building platforms as at a particular time. They are estimated as of 12/31/2015 and may change.
500 Startups Events and Community Platforms
COMMUNITY

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The Case for Transformation
in Financial Services

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$13T

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/ Digital changes ALL customer expectations

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< 1% US Loans Originated Online
Source: Wall Street Journal June 2016

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/ The best and brightest don’t want to work for incumbents.

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FinTech/InsurTech: Technology-based
solutions to make financial services more
efficient, whether by disrupting or
enabling incumbents.

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Source: McKinsey & CB Insights

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/ 2014 Areas of Innovation - Global

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/ Digital delivers superior margins…

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…and customer satisfaction
Source: OnDeck company filings
76
46
19
9
OnDeck Community Banks Regional Banks Na<onal Banks
Net Promoter Score
US customers n=100

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Source: KPMG & CB Insights

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Payments
Lending
Payments Payments Payments
‘GAFA’ anchors customers’ digital lives…

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434M Customers
8.5M Merchants
12.7B Transactions/Year
Payments
Credit Scoring
Lending
Banking
Investments
$60B
Market Cap
Sources: http://expandedramblings.com/index.php/alibaba-statistics/; Wall Street Journal Market Watch Apr 26, 2016

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/ 27 FinTech Unicorns - $137B+ in Market Cap
http://www.bizjournals.com/sanjose/news/2016/03/09/19-fintech-unicorns-that-might-end-up-being-real.html

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Source: CBInsights data
0
10
20
30
40
50
60
70
80
90
2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4
FinTech M&A Ac;vity: 2011-2015
M&A IPO
Exits in the space are climbing
300 in 2015 vs. 100 in 2011

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Different subsectors & regulation = different industries
Tipping point
Laggards
shrink / die
“New
normal”
New
technology
emerges
Innovative
startups
disrupt
Early adopters
proliferate
Advanced
incumbents start
adapting
Mainstream
customers
shift
Source: McKinsey & Company & Mike Sigal Analysis
Capital Markets
Full Stack Banking
Lending
Wealth Management
Payments

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FinTech will decimate margins.
Source: PwC Global FinTech Survey 2016
28%
24% 23% 22% 21%
Fund transfer &
payments
Banks Average Asset/Wealth
management firms
Insurance firms
% of Top Line estimated to be lost

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How are Incumbents Responding?

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Tipping point
Laggards
shrink / die
“New
normal”
Advanced incumbents
start adap<ng
New technology
emerges
Innova<ve
startups disrupt
Early adopters
proliferate
Mainstream
customers
shi[
Source: McKinsey & Company

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500 Corporate Innovation Framework
Dealflow
Finding the right
startups & ideas
Engagement
Working with them
Outcome
Getting results
Partner
Invest
Acquire
Accelerators/Outposts
PR/Sponsorships,
Competitions/Events,
VC Fund Investmetns
Skills/Talent
Market Share
Positioning/Recruiting
Corporates need the right startups AND internal processes to get
results

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/ Transformation Toolkit
SV Tours
Attending Conferences
Lab/Accelerator/Sandbox
Silicon Valley Outposts
FinTech Hubs
Engaging with Regulators
Startup Partnerships
Direct Startup Investments (CVC)
Acquisitions
Venture Fund Investments

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Mindset
Skills
Process
Culture

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Don’t mistake ‘Digitalization’ for ‘Digital’
Sell the right vision to executive leadership
Get some startup/VC mojo…company wide
Find the ideas globally
Pick the right KPIs for the right time
Engage customers & stakeholders often
Disciplined, rapid experiments & reporting
#GET500STRONG
Rules for Building Innovation Capabilities and Culture

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Financial Services for the Rest of Us!

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Source: https://www.cbinsights.com/blog/fin-tech-funding-growth/
Most Active Early-Stage FinTech Investor in the World

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Wealth/Investing Financial Management Payments/Transfers
Lending Crowdfunding Insurance
Red outline > $1B in value - Blue outline $100m-$1B in value
Blockchain
Fast growing disrupters & enablers

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// Active FinTech investments in 24 countries & growing
Investments by Country – Q3 2016
Argentina 1 Indonesia 1 Singapore 3
Austria 1 Japan 1 Slovenia 1
Brazil 3 Jordan 1 South Korea 2
Canada 1 Kenya 2 Sweden 1
China 2 Malaysia 2 Thailand 1
Estonia 1 Mexico 6 UK 1
Germany 1 Columbia 1 Ukraine 1
India 5 Nigera 1 USA 87

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/ Platform for Digital Transformation of FinServe
Global brand & startup deal flow
Early-Stage Venture Fund
Silicon Valley Accelerator
Corporate Partner Program
Startup & Corporate Expertise
Network of mentors, founders & investors

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/ FinTech track at 500 Startups SF Accelerator
500S curriculum + FinTech content
Run by FinTech entrepreneurs
Only pure-play FinTech accelerator in SV
Global community of FinTech Angels, VCs,
Corporate Innovators & Mentors

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/ Corporate Partners leveraging 500 FinTech’s platform

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500 Corporate Innovation Framework
Dealflow
Finding the right
startups & ideas
Engagement
Working with them
Outcome
Getting results
Partner
Invest
Acquire
Accelerators/Outposts
PR/Sponsorships,
Competitions/Events,
VC Fund Investmetns
Skills/Talent
Market Share
Positioning
Corporates need the right startups AND internal processes to get
results

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/// 500 Startups Corporate Innovation Services
Accelerate the development of innovation processes and capacity
Portfolio Access
500 Dealflow
Custom Dealflow
Dealflow Process
Corporate Training
Immersion Programs
500 Courses
Ecosystem
Engagement
Team Recruitment
Innovation Audit
Strategy Formation
PoC Strategy
Accelerator Strategy
CVC Strategy
Dealflow
Development
Engagement
Capacity
Outcome
Definition

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Basic Portfolio Access
• Event Invitations
• Newsletter
Commercial Partnership
Upside: Corporate FinTech Accelerator
LP Investment
500 Startups Corporate Innovation Service Delivery

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/ 500 FinTech LP Investments
Partnership Benefits PLUS
Financial Returns
Early stage co-investment opportunities

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/ ICICI Lombard Interests
Roboadvising (Distribution)
• Embroker (embroker.com)
• Indio (useindio.com)
• Inzmo (inzmo.com)
• VisionX (visionx.co)
• Trym (trym.co)
New Products
• WorldCover (worldcovr.com)
Drone based surveys
• BetterView (presentation)
David Lyman
dlyman@better.vu
Blockchain
• Chain (chain.com)
AI
• Datatron (presentation)
Harish Doddi
• harish@datatron.io

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/ Blockchain in Insurance

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/ Get #500STRONG
Questions?
Want to introduce Startups to 500 FinTech?
Want to invest in our FinTech Fund or partner with us?
Mike Sigal
mikes@500.co
Join the 500 Fintech Community and get our updates
http://bit.ly/2c3Q9s6