Data Science. Credit Scoring. Digital Finance - ID Finance
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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 COMPANY IN EUROPE
2017 2017 September 2018 September 2018 April 2018 March 2018
1
1 EXECUTIVE SUMMARY
2 MARKET OVERVIEW AND COMPETITORS LANDSCAPE
3 PRODUCT & IT
4 KEY FINANCIALS AND FUNDING STRATEGY
2
Executive Summary
LEADING INTERNATIONAL FINTECH COMPANY
Company Overview Key Business Highlights
• Industry: digital consumer finance • Strong financial performance:
• Founded: 2015, HQ Barcelona − $33m revenue for 9m18 (197% growth vs. 9m17)
• Employees: 300+ − $64m issued for 9m18 (142% growth vs. 9m17)
• Products: Consumer instalment loans − $55m gross portfolio in Sep-18 (175% growth vs.
Sep-17)
• Geography : Europe (Spain & Poland), LatAm (Brazil &
Mexico) − $55m annual revenue after 3 years of operations,
plans for 2019 - $135m (including $6m credit
Global Expansion: Europe and LatAm card revenue)
Loans Credit cards • Rapidly growing customer base: 1.2m registered users as
at Sep-18 (168% growth vs. Sep-17)
• Technology and data driven with fully in-house IT
platform and international expertise
1 202
MX 2017
BR 2016
PL 2015 610
ES 2015 (HQ)
BL 2012 (R&D hub) 92 633
135
423
18 55 256
2017 2018F 2019F 2020F 2021F 2022F
3
Executive Summary
LEADING INTERNATIONAL FINTECH COMPANY
Our mission
Empowering underbanked to become financially included and live better lives by offering flexible,
technology-empowered financial products
Our strategy Key Numbers
To build number one online consumer lending platform
across Europe (Poland, Spain) and LatAm (Brazil, Mexico)
1m+ registered users
To launch new consumer products: c.20,000 new registered users weekly
credit cards with zero balance transfer
money transfer & payments $600m+ of revenue from loans by 2022
credit monitoring and educational tool
$1.2bn of revenue from credit cards by 2022
finance planner
Our successful tractions was proved by top Recent Selected Awards
The most innovative
Fastest growing fintech Fastest growing 100 hottest
in credit scoring
company in Europe company in Europe startups in Europe
services
4ID Finance Solid Expansion Plan to Capture Market Opportunity in Latin America
RAPID GROWTH EMPOWERED THROUGH EFFECTIVE SCALING STRATEGY
Net Loan Portfolio
2016 2017 2018 2019 2020 2021 2022
Consumer loans
Credit cards
$3m $13m $36m $109m $364m $1.3bn $2.5bn
Launch in Europe LatAm expansion Product diversification Further scaling
Expand product range: Achieving profitability of credit
Spain. Jun-15 Brazil. Nov-16
Credit cards (zero transfer card business
Poland. Dec-15 Mexico. Sep-17 balance)
Hired team Created pool of loyal New consumer loans Exploring scaling opportunities
Overdrafts in other countries
Launched customers
Current accounts/deposits
unsecured lending Currency exchange tools
Money transfers
Major factors for effective scaling
Professional and motivated Centralised IT and risk- Availability of funding
global and local team infrastructure
5Strong Management Team
GLOBAL TEAM OF FINANCIAL SERVICES AND TECHNOLOGY EXPERTS
Boris Batin PhD Alexander Dunaev CFA Kieran Donnelly Javier Lopez
Co-founder, CEO Co-founder, COO Board member Chief Financial Officer (CFO)
15+ years of work experience in banking 10+ years of experience in banking and finance 30+ years of management experience in 19+ years of experience in financial services
banking and finance
Previously held various positions at Deutsche Previous experience: Deutsche Bank, London Previous experience in General Electric and
Bank, Renaissance Capital and RBS in London Served as CEO of 4finance
Holds Chartered Financial Analyst degree Standard Chartered Bank
and Moscow
Holds senior roles at Standard Bank Group, Graduated from ESADE University (Barcelona,
Graduated from Imperial College with a degree
Graduated from Cambridge University with a MDM Bank and Renaissance Group Spain) with a degree of MBA
of Master in Finance
degree of Master in Economics
Yannick Del Ponte
Ekaterina Kazak Alessandro Ceschel Antonio de Brito
Chief Risk Officer (CRO) Country Manager (Brazil)
Bonilla
Chief Marketing Officer (CMO) Country Manager (Mexico)
10 years of work experience in risk 11 years of professional experience in Digital 12+ years of experience in financial services 20+ years of experience working for financial
management Marketing and international IT Projects multinational companies.
Previous experience in Asset Management
Previously worked as Head of Russia & CIS Previously developed online internet industry as well as in Enova (multinational Previously held senior management positions in
Experian Analytics businesses B2C, B2B and P2P in Spain – online lending company) as Strategy and Servicios Financieros con Valor, Pretmex and
Ulabox, Logismarket, Socialcar, worked in MNC Operations Manager and Security Asset Fullerton Financial Holdings
Graduated from Moscow State University of
(Nestlé) and in early stage startups
Economics, Statistics and Informatics Certified in Financial Institutions for Private
Graduated from Padova University with a Graduated from Duke University at North Enterprise Development at Harvard Kennedy School
Master in Industrial Engineering and Business Carolina, USA, with a degree of MBA Post Graduate Certificate in Corporate Finance at
Administration (Operations and Strategy) Universidad Intercontinental
61 EXECUTIVE SUMMARY
2 MARKET OVERVIEW AND COMPETITORS LANDSCAPE
3 PRODUCT & IT
4 KEY FINANCIALS AND FUNDING STRATEGY
7Pivotal Moment for Latin America FinTech Market
The major FinTech categories FinTech adoption* (world), 2017
Money transfer & payments
China 69%
Savings & Investments India 52%
$40 bn UK 42%
Financial planning revenue by Adoption in Brazil
2028 Brazil 40% is anticipated to
(BR+MX) grow up to 69%*
Australia 37%
Borrowing
Spain 37%
Insurance World average 33%
*Adoption is a percentage of respondents in each market who reported using one or more FinTech
service in that category. Calculated based on survey prepared by E&Y in 2017
Latin America is one of the world’s fastest growing markets for FinTech adoption and Brazil is in Top-
5 markets with the highest FinTech adoption. The level is expected to grow from 40% to 69%
8Pivotal Moment for Latin America FinTech Market
Transaction volumes on LatAm FinTech market ($bn) Household loans in Brazil and Mexico, $bn
Actuals Forecast
$100bn unsecured consumer loans outstanding
$160 with 7% CAGR expected in Brazil and Mexico
142
$140
127
802
$120 113
100
$100 648
89
79
$80 70
$60
303
$40
$20
$0
2016 2017 2018 2019 2020 2021 2022 2008 2017 2022
Sources: Statista, E&Y survey (2017), Goldman Sachs Sources: EIU, Goldman Sachs, Central bank of Brazil, ID Finance
FinTech market is rapidly growing in LatAm and expected to generate $40bn in the next 10 years with
transaction volumes future CAGR of 12%
9Digital Banks Poised to Revolutionise LatAm’s Banking Sector
Uncompetitive banking services Demographic bonus
Low competition: 5 banks controlling c. 80% bank Young, educated, tech-savvy and
assets which results in the world’s third highest financially literate generation enters the
borrowing costs period of greatest productivity
Outdated technology: offline and bureaucratic
business processes
Technology Economic
disruption recovery
Internet and mobile penetration increases:
Key drivers of Structural reforms, fiscal discipline, falling
Brazil is the fourth-largest by number of
smartphone users in the world (80 mln)
digital banking nominal interest rates will unlock GDP
growth during next 2 years
New distribution channel for financial services growth in
makes “branch”-banking obsolete
Brazil and
Arising Mexican market Mexico Underbanked
Only 14 bank branches per 100,000 population
inhabitants and only few small alternative >50% Brazil & Mexico population is
consumer lenders (Kueski, Kubo, Albo, underbanked
Prestadero) cause strong demand in
banking services
Uncompetitive banking services together with increase in mobile penetration and growth of
population create strong opportunity for FinTech companies to gain market share from politically
influenced incumbents
10Brazilian Credit Card Market Sizing
Credit card outstanding balance, $bn Top 5 players represent 65% Statistics on interest rates
Forecast of the market (2017)
80
67 Annual Monthly
61
60 55
30% Major traditional banks
40 35%
20 $61bn Banco do Brasil 195.7% 9.5%
0 ITAU Unibanco
218.3% 10.1%
3% 12% BM
4%
16% Caixa 252.4% 11.1%
ITAU Banco De Brazil
Revolving*** Financing** Non-financing* Santander 254.8% 11.1%
Bradesco Santander
* Interest free transactions, associated with an instalment plan or not. Caixa Other Bradesco (Brasil) 255.0% 11.1%
** Regular instalments (non interest free) only.
*** Includes cash withdrawals
Average (major banks) 235.2% 10.6%
Monthly transactions made by credit cards, $bn Digital nature banks (certain examples)
30 Credit card Banco Inter 95.8% 5.8%
25
transactions Banco Original 369.4% 13.8%
20
15
represent Agibank 514.2% 16.3%
10
5 c. 20
% of Nubank n/d 2.8%-14.0%
0
household Next n/d 15.1%
consumption
Sources: MarketLine, ABECS, Companies’ Reports, ID Finance analysis
Credit card market in Brazil is growing 10% annually
20% of household consumption was cleared through credit cards in 2017
Brazil still has the highest credit card rates of all OECD countries
11European Fintech Market Trends
Key European market trends
Europe has world average adoption of 33% with Spain in Top-6 markets with the highest FinTech adoption. The level is expected to
grow from 37% to 56%
Investment in venture capital is growing with $4.7bn invested 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 ($2.6 billion)
Transaction volumes on European FinTech market ($bn) Household loans in Spain and Poland, $bn
Actuals Forecast
$1,000 880 $1,500 1,362
1,281
$800 687
747
811
Spain and 1,079 1,129
1,161 1,212 $1000bn+
583
633
$1,000 933 consumer loans
$600 537 Poland
outstanding with
constitute only
$400 8% of European
$500
5% CAGR
FinTech market (2017-22)
$200
expected in Spain
$0 $0 and Poland
2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022
Sources: Statista Sources: EIU
Europe has world average adoption of 33% with Spain in Top-6 markets with the highest FinTech
adoption. The level is expected to grow from 37% to 56%
European FinTech market is expected to grow with 9% CAGR until 2022
12Global Digital Bank Case Studies
Equity raised
Disruptive Consumer Focused Digital Banks (globally)
to date
Founded in 2013 in Brazil, has a full banking license. Offers a current account, credit and debit cards
In 2017 reported having around 3mln customers, up from 1.3mln a year earlier. Total revenues tripled to
R$567mln vs. R$170.mln in 2016. Net losses: R$117mln in 2017 $707m
Last valuation: $4bn (Oct-18).
UK-based company operating in EU. Started in 2015 as a money management app offering currency
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.
Looking to expand to the U.S., Canada, Singapore, Hong Kong, Australia, New Zealand in months. $340m
In June 2018 had passed the 2 million user mark (doubled since November 2017)
Last valuation: $1.7bn (Apr-18)
UK-based mobile-only bank . Launched in 2014. Focuses only on savings accounts and mortgage offerings
In 2017 passed over £900m in deposits. $480m
Last pre-money valuation is $370m (Mar-18)
UK-based mobile-only bank. Launched in 2015. In 2017, the startup was granted a banking licence and has
begun rolling out its current accounts
Customer base: over 500,000, in 2017 gained 404,764 new users. Deposit figure c. £50m $140m
Last pre-money valuation is $280m (Nov-17)
UK-based mobile-only bank. Launched in 2014, was granted UK banking license in July 2016.
Currently is creating an app that will replace the current account for a generation of mobile users, helping
them to see their money from a new perspective $190m
Customer base has grown 20%/month during 1H2018.
German mobile bank operating in EU. Launched in 2013.
Helps its customers manage their bank accounts through their smartphones. Additionally provides
international money transfer, investment, overdraft, and cash withdrawal and deposit at stores. $210m
Claimed a customer base of 850,000, with the goal of having 5,000,000 customers by 2020
Key ID Finance competitive advantages
Professional team Access to funding Loyal client base
ID Finance unlocks talent pools in ID Finance may use internally generated ID Finance may leverage existing loyal
countries outside LatAm and shares income to scale and grab market share customer base offering new banking
international expertise products and driving LTV up 131 EXECUTIVE SUMMARY
2 MARKET OVERVIEW AND COMPETITORS LANDSCAPE
3 PRODUCT & IT
4 KEY FINANCIALS AND FUNDING STRATEGY
14Understanding Our Clients
WE TARGET PEOPLE LIVING IN LARGE CITIES WHO ARE UNDERSERVED BY TRADITIONAL BANKS
Has bank account,
25-45 years old but partially
underbanked
Age Active card user
Availability of
Have/had any loan
product across the
whole countries % outstanding (car,
mortgage…)
presence
Geographical
Active loan users
expansion strategy
c. US$1000
monthly for LatAm
Has a smartphone
and EUR1500 for
Europe
Disposable
income
15Technology-Powered Products that Solve Customer Pain Points
WE PLAN TO OFFER A RANGE OF FINANCIAL SERVICES ON A FULLY MOBILE PLATFORM IN LATIN AMERICA
In LatAm, ID Finance plans to …
... develop existing products
• Build number one online consumer
% lending platform across Europe
(Poland, Spain) and LatAm (Brazil,
Mexico)
… launch new consumer products
• zero balance transfer credit cards
• focusing on credit consolidation
• leverage existing technology and
consumer lending know-how
• money transfer & payments
• credit monitoring and educational tool
• personal finance planner $
Steps:
ACQUISITION RETENTION NEW PRODUCTS
1 Develop unsecured lending 2 Collect data, monitor and instantly 3 Offer new products to existing
and build up loyal customer address issues to increase customers – credit cards,
base retention and lower churn payments, FX etc.
16Our Products and Client Acquisition Funnel
HIGHLY EFFECTIVE CLIENT ACQUISITION AND RETENTION STRATEGY
Product overview Client Acquisition Funnel (for 9m2018)
Conversion to
Europe: $25 - $1900
7m website visitors applications
Loan size
LatAm: $50 - $750
(vs. 2.5m for 9m17) 10%
Approval rate
709k applications
Term 1 – 12 months
(vs. 352k for 9m17) 23%
161k loans Retention rate
APR Europe: 50% - 100% annually issued
LatAm: 15% - 30% per month (vs. 81k 90%
for 9m17)
17IDF Technology Overview
PROPRIATERY IT PLATFORM AND IN-HOUSE IT TEAM
Using user-centric approach
Located in the center of IT constantly improve usability,
innovations - Belarus High accessibility, empower high-quality
Technologies Park Web and visual designs and front-end
High development
Technologies mobile
Park application
6 1
Highly efficient org Proprietary developed IT
structure: platform makes personal
Front-end, java, back- Dedicated 5 2 Technology banking services available for
end developers developme thousands of active mobile
Quality assurance nt team users automazing regular
Business analysts banking activities
4 3
Ongoing Flexibility
IT-support
In-house developed IT
CRM support
infrastructure allows IDF to adapt
Security issues
to changing fintech market
Regular back-ups
conditions faster than competitors
Pavel Shareyko
Top-25 IT companies in Belarus* Chief Technical Officer (CTO)
13 years of experience in software development,
including development of high-load applications
and financial systems
Previous experience: Lead developer at Itransition
* dev.by
Graduated from Belorussian State University
18Data-centric approach to risk-management
ID Finance uses market leading risk-management solutions, in addition to proprietary technology empowered capabilities
1 Credit history 2 Fraud prevention
4 Internet presence 3 Behavioural data
The data-driven client assessment of the client is key to a robust credit risk management framework
191 EXECUTIVE SUMMARY
2 MARKET OVERVIEW AND COMPETITORS LANDSCAPE
3 PRODUCT & IT
4 KEY FINANCIALS AND FUNDING STRATEGY
20Key operating metrics performance
X16 GROWTH IN 4 YEARS
Reveune ($m)
2,000
1 838
1,800
1,600
1,400
1,200 152%
CAGR 1 034
1,000
(2017-22)
800
600
400 349
200 136
55
4 18
0
2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM
21Key operating metrics performance
X45 GROWTH (2017-22)
Number of loans/cards issued (mln), cumulative and
Net loan portfolio ($m)
growth (2017-22)
6.0 3,000
5,5
2563
5.0 2,500
4.0 2,000
3,6
140%
1,500 CAGR (2017-
3.0
45x 22) 1355
1,000
2.0
1,5
364
500
1.0
0,7 109
0,3 36
0,1 3 13
0,04 0
0.0 2016 2017 2018 2019 2020 2021 2022
2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM
Lending: Europe Lending: LATAM Credit Cards: LATAM
22P&L Flow 2022 (in $ m)
STRONG UNIT ECONOMICS
2,000
1,800
175
1,600
1,400
608 608
1,200
1,000
1837
385 385 385
800
600
314 314 314 314
400
107 107 107 107 107
200
247 247 247 247 247 247
0
Interest income Interest Provision and Operating Administrative Tax expenses Net income
expenses write off expenses expenses
23Funding needs
ACTIVE SCALING WHILE KEEPING HEALTHY LIQUIDITY RATIOS
1,200 New equity additions, US$m New debt issuance, US$m Capital adequacy ratio 1,142.6 40%
36%
997.8 35%
1,000
30%
800
25%
600 20%
15% 15%
400 12% - minimum acceptable level 14%
13%
286.8 10%
200
100.0 100.0 5%
60.0
0.0 10.8 0.0 16.7 0.0 23.8 0.0 0.0
0 0%
2016 2017 2018 2019 2020 2021 2022
Total equity need for New debt issuance Healthy liquidity ratios
5 years Capital adequacy ratio
US$200m US$ 2.5bn above 12%
24Boris Batin
Co-founder, CEO @ ID Finance
Boris.batin@idfinance.com
Thank you!
Alexander Dunaev
Co-founder, COO @ ID Finance
Alexander.dunaev@idfinance.com
25Disclaimer
• This document and its contents are confidential and may not be reproduced, redistributed, published or passed on to any
other person, directly or indirectly, in whole or in part, for any purpose.
• This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident
of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or
regulation or which would require any registration or licensing within such jurisdiction.
• The information in this presentation has not been independently verified. No representation or warranty, express or implied,
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.
• This presentation contains forward-looking statements, which include all statements other than statements of historical
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.
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