While we are not able to offer a meaningful comparison between PayTech and FinTech companies, it is worth noting the global pace of FinTech investment, which is running at double its pace of 2015 - $6.1bn in the first three months of 2016 compared to $3bn in the same months of 2015. In one week alone, a record 36 companies raised $480M 14 in equity and debt . And with PayTech being the biggest part of FinTech, it is reasonable to assume that a decent share of the investment will be heading into payments technology firms. PayTech acquisitions The most common destination for these businesses is to be acquired by another company. Most of such acquisitions, or trade sales, were for companies based in the US. Acquirers tend to be large or global companies looking to enhance their payments offerings or to provide additional value added services to their portfolios. Some have been particularly interested in a niche market, payments capability, knowledge or talent. There are many examples. Samsung, for example, acquired the US-based LoopPay, a mobile payments-based company as part of Samsung’s strategy to power its mobile payment transactions. Recently Samsung Pay has become an active member of the Emerging Payments Association. Coinbase, a Bitcoin wallet and merchant processing company acquired the also US-based Blockr, a company that keeps track of Bitcoin transactions. According to Coinbase’s CEO, the acquisition has been driven more to acquire the talent within the company rather than the product. Other acquiring companies include Workingpoint, Google, PayPal, Funding Circle, Capital One, Heartland Payments, Twitter, LifeLock, Braintree, Square, Capital One, Bankrate, Inmar and First Data. The line between an acquisition and a merger can be very fine, when it’s the brand and leadership on the table as well as money. Mobile payments start-ups SumUp and Payleven announced their merger at the end of April 2016, after this study was carried out. CEO of SumUp, Daniel Klein, will become CEO of the merged company, which will keep the SumUp brand. SumUp launched in 2011 and Payleven in 2012, alongside numerous other PayTech companies looking to capitalise on the opening market for mobile payments. To date they have raised investment of nearly $45m and just over $25m respectively. So why have they merged and why are others not doing the same? The fit between these two companies includes their shared vision and complementary strengths, and these are clear benefits from the merger which will support global growth while enabling economies of scale. Perhaps the reason we have not seen more mergers to date is, as Klein points out, that payments card adoption has taken longer in Europe than expected. In addition, it is quite possible that the flood of investment capital finding its way into these PayTech companies has given them the luxury to remain independent without the need to go through the challenging process of merging – yet. Longevity of PayTech start-ups The research indicates that UK payments companies remain independently active for longer than US players. 29% of US PayTech companies which originated in 2010 have either closed or been acquired, while 100% of the UK PayTech companies reviewed are still independently active. The research undertaken showed many active PayTech companies in the UK, although it is likely that a share of these will be acquired by another company in the coming years. Particular niches where the top VC firms seem interested include Bitcoin/blockchain, crowd funding and peer-to-peer lending, international payments, personal finance management, mobile payments and mobile banking. While the media focuses on high-profile failures, such as Powa Technologies in 2016, the percentage of PayTech businesses that fail is very low. Where businesses on this list have failed, the most common reasons cited are insufficient funding, poor proposition, an unappealing product or the timing of the launch. 14 Finovate blog - Fintech Fundings: 36 Companies Raise $480 Million Week Ending March 18 EPA WHITE PAPER, PAYTECH INVESTMENTS, COPYRIGHT © MAY 2016 8