EFTA00810510

VALAR Summer 2017 Update EFTA00810510 VALAR SUMMER 2017 UPDATE Fund 1 Review FUND I PORTFOLIO UPDATE Fund 1 continues to perform well, with a 3.5x net multiple and 34.4% net IRR as of sheet to raise $65M led by Institutional Venture Partners (IVP) at a $1.6 billion pre- June 30, 2017. As is our practice, the best investments - Transfenvise and Xero - money valuation. The purpose of this fundraise is to bring the company's balance account for over 50% of the Fund's deployed capital (and the lionshare of its gains). sheet to the level where they have enough cash to cover nine months of operating expenses. The total transaction size (including secondaries) may end up being quite In the second half of 2016, we began selling down our position in Xero, and we a bit larger, as there is significant interest from many other large buyers. This accelerated that in 2017. While we continue to be bullish on Xero's prospects, our transaction is expected to close within the next month. initial investment was made nearly seven years ago, and we felt it was time to start returning capital to ow investors. We have now exited over 90% of our position, Valar Fund I has invested $22.2M in Transfenvise, which is now valued at with the only remaining piece being the final investment we made into the company $252.7M. in October 2013. Valar Fund 1 invested $31.4M in Xero. Gross distributions to date are $119M with a remaining stake of $5.5M. Transfenvise is now a $145M annual revenue business, with monthly volumes across the network in excess of $1.58, growing nearly 100% year over year, and profitable. They are set to be the global leader for consumer money transfer in the coming years. The company predicts they will hit >20% EBITDA margin in 2019, generating $80M+ in cash. Fund 1 Highlights Over the past 7 years, Transfenvise has built the infrastructure to solve money transfer for consumers. Now they are well positioned to use that infrastructure to Inception: October 2010 address the same problem for businesses and banks across a $200B revenue market, Capital Commitments: $100.0M essentially replacing the correspondent banking model. Larger customers, including some banks (such as N26), have started moving to that new infrastructure. So Current FMV: $411.8M really, they are just getting started. Multiple (Gross & Net): 4.33x / 3.36x IRR (Gross & Net): 43.7% / 36.3% The most recent financing news is that the company has accepted a Series E term % of Fund Invested / Reserved: 100% DPI: 1.2x I I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810511 VALAR SUMMER 2017 UPDATE Fund 2 Review FUND 2 PORTFOLIO UPDATE Fund 2 is now approximately 90% called and deployed, with a significant majority of 2017 the company has revamped its marketing program and hired a new VP of of that amount invested in three companies - Breather, N26 and Kalo (formerly Marketing to further build the demand side and amplify Breather's brand with both Lystable). An update on these major investments — and a few notes on some of the consumers and businesses. We expect the results of this initiative to dramatically Fund's smaller investments - follows. decrease the time a new unit takes to ramp up to full utilization, even when the company is adding units at a high rate. In our last update, we announced that Breather had raised a Series C round led by Venky Ganesan of Menlo Ventures in November 2016. Google Ventures Breather should continue to grow well through the Summer and be positioned for subsequently invested $5 million at the beginning of 2017 as part of an extension of another strong fundraise in the Fall. Their Series D valuation will be above the point that round, bringing the companies post-money valuation to $252M. In the at which the main funds would participate (and Fund 2 is already at its following seven months (through June 2017), revenue has nearly doubled and they concentration limit). We plan to make our pro-rata available to ow investors have opened 143 more spaces, bringing the total number of Breathers worldwide to through an SPV, similar to those we have put together for Transferwise and Stash in 433. Most of these new spaces were opened in their existing core cities of New the past. York, San Francisco, London, Toronto and Los Angeles. Valar Fund 2 has invested $25.5M in Breather, which is now valued at $42.3M. Since reorienting around B4B (Breather for Business) and implementing commercial space utilization standards (starting Q1 2016), they have opened larger spaces that allow them to serve bigger groups and a broader range of use cases. This approach has more than doubled company-wide square footage since September of last year. In addition, since January 2017, user cohorts have had larger than ever initial reservations and consistent repurchase pattern. The initial transaction of a new customer is now $320 and second and third month cumulative spend levels are Fund 2 Highlights at record-highs. With both first booking value continuing to rise along with six Inception: January 2015 month retention rates, projected LTV has continued to grow. Q1 LTV averaged Capital Commitments: $102.3M $1,014 which was a 12% increase over Q4. Current FMV: $139.5M While Breather has an extremely high NPS score (north of 70), which drives Multiple (Gross & Net): I.57x 11.34x significant organic demand, its CEO felt that their brand marketing and demand IRR (Gross & Net): 36.2% 127.9% generation capabilities needed upgrading. To address this, over the first six months % of Fund Invested / Reserved: 100% 2 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810512 VALAR SUMMER 2017 UPDATE Fund 2 Review At the end of 2016, N26 received its full banking license from BaFin (the German Given N26's ambitions to grow quickly and expand into the UK and USA, we banking regulator) and transitioned all of its customers off of their partner, expect N26 will raise a Series C round in Q4 this year at a valuation that is above Wirecard's, platform and onto their own. The focus since the start of 2017 has been the level where it makes sense for Valar main funds to participate. Again, the plan on building out their internal systems and the customer-facing product suite, is to make ow pro-rata available to our investors through an SPV. through internal development as well as through integrations with other startups (e.g., N26 customers make foreign currency transfers using Transferwise inside the Including the most recent financing round, which has been agreed to and is N26 app). expected to close later this quarter as soon as regulatory approval is received, Valar Fund 2 will have invested $I 5.0M in N26, which will be valued at $40.6M. Offering its customers a wide range of financial products allows N26 to capture a Between Funds 2 and 3, Valar will own approximately 16.3% ofN26 and be the greater share of wallet, and unit economics have improved rapidly as a result. In Q4 company's largest shareholder. 2016, the company was earning approximately E29 per customer; that has risen to E50 per customer in May 2017, roughly the current level where a customer is Lystable formally changed its name to Kalo earlier this year. The rebranding takes profitable for N26. As the company scales, they will breakeven at a lower point by care of a trademark dispute with a UK company and better aligns the company's driving down variable costs (e.g., negotiating a better deal with MasterCard on brand and product. interchange fees). N26 believes it can drive revenue per customer into the high E50s by the end of 2017, and projects monetization per user in the high €70s by the end The big win for Kalo since our last update is that, after a year of Airbnb using Kalo of 2018. As a result of its rapid acquisition of customers, N26 has seen a revenue across 10 of its teams, Kalo has secured a global deal to roll out its product to every ramp of nearly 3X in the first six months of this year. We have seen breakout team at Airbnb. This is particularly notable given that, while Airbnb has a large revenue acceleration like this before (with Transferwise) and believe N26 has number of employees (around 3500), it has an even larger number of freelancers similar potential to become a fintech giant. (approximately 4200). Moreover, Airbnb spends $15-25 million per year on freelancers who manage over 2500 tasks per month. In addition to improving unit economics, N26 has been expanding its geographic reach. The company now has over 400,000 customers (-200,000 financially active) Once Kalo has been fully rolled out across Airbnb, the only way someone can and operates in 17 EU countries with plans to expand into the UK in the near term. freelance with Airbnb is through Kalo, Kalo will be the system of record for all Planning is also underway for a potential US launch in 2018. While the UK and Airbnb freelancers and more than half of Airbnb's workforce will be reliant on the USA are competitive and enormous markets, we believe N26 is well positioned to Kalo platform. In short, Kalo will be critical to Airbnb's day-to-day operations. compete in these markets; it has a huge head start on all the other European neobanks and offers a superior product experience and cost structure to incumbent This global deal is a big step forward for the company and Kalo has a substantial banks in all geographies. pipeline of smaller and larger size deals it hopes to close this year. 3 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810513 VALAR SUMMER 2017 UPDATE Fund 2 Review Granify has continued to solidify its enterprise sales team and revenue has started Tradelt is in the process of signing Master Services Agreements with Fidelity and showing the results of the effort to improve their sales capability that began in late several other massive financial institutions. These deals would put Tradelt in the 2016. Revenue in May was —$250k and the company feels they can double that by position of managing all API access for these clients. Once implemented, if a October. If they are able to hit their targets, Granify should be profitable by year- developer wants to build something on top of a Fidelity API, they will have to go end. through Tradelt to do it. This is a huge opportunity for the company. Valar Fund 2 has invested $6.3M in Granify, which is being held at cost. Valar Fund 2 has invested $3.7M in Tradelt, which is now valued at 4.6M. EyeEm operates in a difficult and shrinking market for paid stock photography. The Since our last update, Homie has become licensed as both a mortgage broker and a company has been unable to achieve sufficient scale in its own photo marketplace real estate broker, in order to more fully facilitate its for-sale-by-owner customer to warrant further investment in the business. The positive news is that the wedge and begin to increase monetization. Now, whenever buyers and sellers use computer vision technology the team has built to automatically classify photos has Homie's software to transact, they can seamlessly find a mortgage through the been the subject of considerable interest from larger companies. EyeEm and its service as well. This provides a substantial revenue stream for the company. board have determined that a trade sale may be the best outcome at this point and Revenues have begun ramping nicely, and the company should be well positioned that process is evolving. to raise a sizeable Series A this Fall. Valar Fund 2 has invested $10.4M in EyeEm which is now valued at 11.2M Valar Fund 2 has invested $2.8M in Homie, which is being held at cost. (change due to FX). Even is still heavily in product development — they are building a bank app for hourly workers that can use machine learning to automatically budget for its users and provide short term loans to smooth income. The company's first customer is Walmart, who pays them a fee per user per month. Even plans on rolling out with Walmart nationwide in the Fall. Valar Fund 2 has invested $4.5M in Even, which is being held at cost. 4 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810514 VALAR SUMMER 2017 UPDATE Fund 3 Review FUND 3 PORTFOLIO UPDATE Fund 3 is now 60% called and deployed into six major investments and a handful of The following graph (excerpted from Stash's marketing materials) helps illustrate smaller, seed stage companies. We expect that the substantial majority, if not all, of the company's traction vis-i-vis other well-known players in the space: the remaining capital will be invested in follow-on financings in these existing portfolio companies. Adoption Curve Speed of Erna/NA and a kite lAM hos sowed us to goh tro0NA 0NI0Ny. So far, Stash has commanded the largest share of Fund 3, with just over 20% of the Fund invested in the company's Series A, Series B, and Series C financings. Omit App Downloads since twitch The big news for Stash is they just raised S40M at a $200M pm-money valuation in a Series C funding led by Coatue Management, with participation from Valar, Goodwater and Jim Breyer. The company has now raised a total of $78 million in STASH less than two years. Coatue has been following the company's progress for some robinhccd time and wanted to be sure they would win the deal before it hit the open market. "Stash is disrupting the financial services industry by removing bathers and making digit investing more approachable and accessible to the 100 million-plus Americans on A Betterment the sidelines," said Coatue's Founder and Portfolio Manager Philippe Laffont. "Its rapid growth in a short period of time shows that Stash has found a way to transform how Americans manage their money and gain financial independence.- Fund 3 Highlights Stash has continued to grow extremely quickly. It currently serves over 865,000 customers; adding more than 25,000 per week while keeping its blended CAC Inception: July 2016 under $16. In our last update we shared the company's audacious goal ofreaching Capital Commitments: $103.9M 1,000,000 users by the end of September 2017. We are pleased to report that the company is in fad ahead of schedule and should hit that figure six weeks early, Current FMV: 894.8M around mid-August. We believe they are growing faster than any competitor while Multiple (Gross & Net): 1.41x / 1.26x maintaining engagement metrics that are the best in the market. IRR (Gross & Net): 208.5%/ 146.8% % of Fund Invested / Reserved: 90% 5 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810515 VALAR SUMMER 2017 UPDATE Fund 3 Review Stash is planning on quickly rolling out new products to its customers. Stash Retire, Although Octane is currently exploiting a profitable niche within secured lending, which allows users to save and invest their money in an IRA, is already in beta and we believe Jason can build the company into a diversified giant over the coming will be fully released this summer. And a checking account and debit card product years. are on the roadmap for the end of this year. Octane Lending has raised -428M in equity capital from VCs, including $12.5M In terms of customer growth and fundraising velocity, Stash is reminiscent of from Valar, and $95M in warehouse lines from Macquarie Group and other Transferwise and N26. We have high hopes that the opportunity in front of them is financial institutions. as big. We are pleased to be working on Octane with Roger Ehrenberg from IA Ventures, Valar Fund 3 has invested approximately $21.8M in Stash, which is now valued at who sits on the board of Octane as well as the Transferwise board with us. $46.6M. Valar Fund 3 has invested $13.2M in Octane Lending, which is now valued at Octane Lending is the second largest position in Fund 3 at this point. Octane is a 13.5M (the change in valuation is due to the small amount of secondary shares we technology-enabled lender focused on secured consumer lending markets, purchased from an early investor at a minor discount). beginning with powersports (motorcycles, ATVs, UTVs, etc). One of Fund 3's first investments was a seed check into Qonto, an SME focused Octane initially launched as a marketplace for powersports loans, similar to what neobank based in Paris. The company was founded by Alexander Prot (whose Dealertrack does for the automobile industry. Octane observed that there was father was formerly the Chairman of BNP Paribas) and Steve Anavi, repeat limited competition to provide loans to buyers who had near-prime credit scores entrepreneurs and co-founders who grew up together and have previously exited a (550-650 FICO) and if they built their own underwriting model they could company together. efficiently generate high volumes of attractive loans. Octane launched Roadrunner Financial in June 2016 to be a direct lender and has been ramping up origination They started Qonto out of the belief that banking for startups and small businesses volume over the last few months. in France is hopelessly broken. Dominated by Credit Agicole and BNP, the customer experience is even worse than with consumer banking. Every time they We met the company through a referral from Wes Barton and Keith Hamlin of needed to ask for something from their bank, it was costing them a lot of money and Third Prime Ventures, old friends oflames' from their days as lawyers at Skadden was a slow and analog process. Qonto is conceptually similar to N26, but Arps. We immediately felt that Jason Guss, the CEO, is a special entrepreneur. specifically geared to the needs of SMEs. Andrew affectionately refers to him as a "Terminator Robot sent from SkyNet." He is one of the most detail obsessed and knowledgeable entrepreneurs we have met in our career. 6 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810516 VALAR SUMMER 2017 UPDATE Fund 3 Review We believe the environment in Europe is quite good for new banks if they can get We have been thinking about insurance and talking to entrepreneurs in the space for started quickly and build a head start on the competition. The regulators are in favor several years, without finding an investment that made it all the way through our of increasing competition and will grant a de novo license. The local incumbents process. As it happens, after years of turning down good opportunities, we found are large and unfocused, and a lack of competition over many decades has left them two compelling companies almost simultaneously, Jetty and Coya. In the business with a customer experience that is inefficient and expensive. of insurance, the most difficult and valuable thing to achieve is effective distribution and customer acquisition. There are many paths to reach these goals, We were impressed by the level of execution we saw from the Qonto team and led starting with the way the company is structured. their Series A round in January. They launched to the public in June and the initial response is promising. Coya is based in Berlin. We met the company through an introduction from Max Levchin's firm, SciFi Ventures. SciFi was doing a deep dive on the insurance Valar Fund 3 has invested $8.4M in Qonto, which is now valued at I0.6M industry and wanted our help from our European network in reference checking the entrepreneurs. Andrew Shaw, the CEO, was previously the original data science Recent Insurance Investments employee at Kreditech, a well-known European consumer loan business. His partner, Peter Hagen, was previously the CEO of Vienna Insurance Group. "Formula for startup success: Find large highly fragmented industry with low NPS; Together they have the magic fintech combo of one person who can write beautiful vertically integrate a solution to simplify value product" - Keith Rabois (our good code and the other person who deeply understands how this complex industry friend and a co-investor in Even). actually functions. Andrew and Peter decided that in the German market, there is an opportunity to capture more value by becoming a fully licensed new carrier. Once The insurance market is huge, insurance premiums are roughly $2.4 trillion dollars licensed, Coya will build, sell, and service several insurance products, beginning per year in the U.S. and Europe. However, it is still dominated by paper processes, with rental P&C policies and expanding to various specialty add-ons (e.g., bicycles, structural inhibition to innovation and incentives to cut costs by downgrading the jewelry). They will operate in-house a number of departments: product customer experience (for example, by making claims a hassle). Entrepreneurs that development, underwriting, sales, marketing, claims, and finance/investment. They manage to navigate the massive regulatory complexity and build the skill set should have structurally higher margins through cutting out most traditional brokers required to operate at a high level in the industry, combined with investors patient from their distribution funnel and applying the sophisticated analysis learned at enough to support the companies over the long-haul, will create huge businesses. Kreditech to their own underwriting models. The license is issued by BaFin, the The insurance industry is too large and built on systems too archaic for any result same German regulator that granted N26 its banking license. BaFin's familiarity other than massive change. with Valar was a significant advantage in our winning the Series A lead. 7 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810517 VALAR SUMMER 2017 UPDATE Fund 3 Review Jetty is based in New York City, and we met the entrepreneurs through Velar Fund 3 has invested SRAM in Jetty and $6.3M in Coya, both of which are introductions from our friends at SV Angel and BoxGroup. Mike Rudoy and Luke being held at cost. Cohler have had careers in technology and consulting and saw an opportunity to apply their backgrounds in design and marketing to the P&C market in the United States. The company is set up as a Managing General Agency or MGA. An MGA is an insurance business set up through a fronting program with another carrier that lends its license and regulatory reserves to the MGA for a fee. Jetty has complete responsibility for product design and pricing, similar to a full carrier. The company underwrites, quotes, binds, and services policies up to a specific amount. Jetty's launch suite includes two traditional insurance products, Renters & Condo/Co-op, as well as Jetty Passport, a pair of revolutionary renter services that help tenants get in the door and help landlords drive occupancy. Jetty Passport is a pair of credit- based-underwriting surety bonds which replace traditional security deposits and lease guaranty, indemnifying the landlord and preserving Jetty's right to recover. They have negotiated distribution agreements with several large residential property portfolios owned by Blackrock. Both Jetty and Coya are in the very earliest stages, so there aren't a lot ofmetrics to evaluate yet. They are innovating on the sales channel for distributing insurance products first, by utilizing mobile and point of sale channels (instead of through agents in-person or over the phone) as well as offering shorter duration and more granular products (e.g., Jetty Passport). Over time they can collect far more data on their customers and utilize big data and machine learning techniques to improve underwriting models far above what incumbents are able to. We're excited to work with these teams as they transform the insurance business. This document is confidential, trade secret, and not for further circulation. This document is informational and is not an offer or solicitation to buy, sell or hold any securities. Except where otherwise indicated, "Fund I" refers to all funds and investment vehicles managed by Valar Ventures Management LLC prior to the formation of Valar Global Fund II LP, on an aggregate basis, "Fund 2" refers to Valar Global Fund II LP and Velar Global Principals Fund II LP, on an aggregate basis, and "Fund 3" refers to Velar Global Fund III LP and Valar Global Principals Fund Ill LP, on an aggregate basis. Figures presented are unaudited estimates in USD as of 68012017, including signed deals that are expected to close in Q3. Gross figures do not include the impact of fees, expenses and carry, and net figures are calculated by reducing gross investment profits by a flat 25% for hypothetical management fees, expenses, and carry. S I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810518 VALAR SUMMER 2017 UPDATE Fund 4 Preview FUND 4 FUNDRAISING As Fund 3 is largely invested and reserved for, we are formally entering the market for Valar Fund 4. We are currently preparing the marketing materials, data room and legal documents (pitch deck, PPM, LPA, DDQ, etc.) and will be making those documents available over the next month. Our intention is to have conversations with each of you starting after Labor Day and close on our existing investor& commitments in December of this year. Consistent with our past practice, the official time stamp for the new fund will be in January, making Fund 4 a vintage 2018 fund. Our expectation is that the Fund will be between $100M and $150M in capital commitments. We appreciate your continuing support and partnership in Valar. We hope you all have an enjoyable summer and we look forward to speaking with each of you in the coming weeks and months. Fund 4 Terms: Target Capital Commitments: $100M - $150MM Anticipated Deployment Period: 2018 - 2020 Target Fund Return: 4x - 6x Due Date for Signed Sub Does: December 2017 Anticipated Closing: January 2018 9 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810519 VALAR FALL 2016 UPDATE Fund 1 Key Drivers 'l TransferWise Headquarters: London Company Description: Securities Held: Series A Preferred Shares TransferWise is a peer-to-peer currency exchange service that brings institutional pricing to Series B Preferred Shares retail customers by coordinating transfer needs within countries across a large user base. Series C Preferred Shares Recent Financing History: Initial Investment Date: 1/8/2013 TransferWise recently signed a term sheet for a $65M Series E financing round led by Valar Cost Basis: $22.2M Institutional Ventures Partners (IVP). Previously, the company closed on a $58M Series C Current FMV: $252.7M financing round led by Andreessen Horowitz in December 2014, and a $26M Series D financing round led by Baillie Gifford in February 2016. Multiple: 11.4x Headquarters: Wellington Company Description: Security Held: Ordinary Shares Xero is the leading cloud-based accounting software provider globally for SMBs. Initial Investment Date: 10/28/2010 Recent Financing History: Valar Cost Basis: $31.4M Fund 1 initially invested in Xero in October 2010 at a $98M valuation, with significant Current FMV: $124.3M follow-on investments by the Fund in February 2012, November 2012 and October 2013. Over the past year, Fund I exited over 90% of its position at a blended $2B valuation for Multiple: 4.0x aggregate proceeds of $118.8M, including through a $30 million block trade with Technology Crossover Ventures (TCV). 10 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810520 VALAR FALL 2016 UPDATE Fund 2 Core Investments ® breather Headquarters: Montreal and New York Company Description: Securities Held: Series B Preferred Shares Breather provides a network of private, professional meeting rooms designed for work, Series C Preferred Shares meetings and to focus. Initial Investment Date: 9/10/2015 Recent Financing History: Valar Cost Basis: $25.5M Breather completed a $42M Series C financing in October 2016 at a $210M pre-money Valar Current FMV: $42.3M valuation led by Menlo Ventures, with participation from Google Ventures, Valar, RRE, Real Ventures, Slow Ventures and others. Prior to that, Valar led the company's Series B Multiple: 1.7x financing round, investing a total of $17M in two tranches that closed in September 2015 and April 2016 at a pre-money valuation of $80M. N26 Headquarters: Berlin Company Description: Securities Held: Preferred A Shares N26is a new European bank focused on building an innovative mobile-first banking Preferred B Shares experience. Initial Investment Date: 4/24/2015 Recent Financing History: Valar Cost Basis: $14.9M Currently, N26 has agreed to a E15M Series B extension round at a E250M pre-money Valar Current FMV: $40.6M valuation led by Valar Ventures and Hedosophia. In June 2016, N26 completed a €35M Series B financing at a €120M pre-money valuation, led by Horizons Ventures, with Multiple: 2.7x participation from Valar, Earlybird and others. Previously, Valar led the company's Series A financing in April 2015 at a E38M pregnancy valuation. II I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810521 VALAR FALL 2016 UPDATE Fund 2 Core Investments kalo Company Description: Headquarters: London and San Francisco Security Held: Series A Preferred Stock Businesses increasingly rely on external workforces of freelancers and contractors, often without an effective way to keep track of them. Kalo (formerly Lystable) provides an Initial Investment Date: 5/6/2015 elegant platform to simplify every step of these workers — from onboarding to internal Valar Cost Basis: $12.4M reviews to payment. Current FMV: $16.5M Recent Financing History: Nlultiple: 1.3x In March 2017, Kalo closed on a $10 million Series A extension round led by Valar Ventures, with participation from Goldcrest Investments, Kindred, Max Levchin and others. Kalo had previously closed on an $1I.3M Series A financing round in June 2016 also led by Valar. The convertible notes held by Fund 2 from Kalo's prior seed financing rounds were EyeEm convened into Series A Preferred Shares in the round, at a blended 2.3x multiple. Headquarters: Berlin Company Description: Securities Held: Series B Preferred Shares EyeEm is a marketplace for commercial photography. The company's highly engaged user Convertible Notes base and machine-curated image library provide a more valuable sourcing channel for commercial clients than traditional stock photography databases. Initial Investment Date: 4/14/2015 Valar Cost Basis: $10.4M Recent Financing History: Current FMV: $11.1M (change due to FX) In April 2015, EyeEm closed on an El IM Series B round led by Valar Ventures, alongside Earlybird and Wellington Partners, among others. Existing investors have since collectively Multiple: 1.1x added E5.9M in bridge financing rounds. 12 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810522 VALAR FALL 2016 UPDATE Fund 2 Core Investments Even Headquarters: Oakland Company Description: Security Held: Series A Preferred Stock Even is a financial app that ensures hourly workers always get at least their average pay. By offering consistency, Even helps its customers save more and use expensive payday lenders Investment Date: 3/11/2016 less. Valar Cost Basis: $4.5M Recent Financing History: Current FMV: $4.5M In March 2016, Even closed on a $9M Series A financing round, led by Valar Ventures, Nlultiple: 1.0x with participation from Khosla Ventures, Box Group, Allen & Company and others. granify Headquarters: Edmonton Company Description: Security Held: Series A Preferred Shares Granify maximizes revenue for online retailers by identifying shoppers that aren't going to Convertible Note buy and changing their mind — while they're still on the site — by harnessing the power of real-time data analytics and machine learning. Investment Date: 3/2/2015 Valar Cost Basis: $6.3M Recent Financing History: Current FMV: $6.3M Granify closed on a $7M Series A financing round in March 2015 led by Valar Ventures. The convertible notes held by Valar Ventures prior to the Series A financing were convened Multiple: 1.0x into Series A Preferred Shares in the round, at a 3.7x multiple. Existing investors have since added $800k in bridge financing to the company. 13 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810523 VALAR FALL 2016 UPDATE Fund 2 Core Investments TRADEITIN Headquarters: New York Company Description: Security Held: Common Stock Trading Ticket (dba Tradelt) facilitates quick and secure online stock trading through Series Seed Preferred Stock any website or app. Initial Investment Date: 4/2/2015 Recent Financing History: Valar Cost Basis: $3.7M After participating in Tradelt's $1M pre-seed round in 2015, Valar has led two Series Seed Current FMV: $4.6M rounds totaling $7M, with participation from Citi Ventures, Sandy Robertson, Point72 and others. Multiple: 1.2x homie Headquarters: Salt Lake City Company Description: Security Held: Series Seed Preferred Stock Homie is a peer-to-peer marketplace for buying and selling homes. By leveraging Convertible Note technology and taking the transaction process online, Homie saves buyers and sellers thousands in broker commissions. Initial Investment Date: 3/17/2016 Valar Cost Basis: $2.8M Recent Financing History: Current FMV: $2.8M Valar led Homie's $3.8M Series Seed round in March 2016, with participation from Peak Ventures and others. Most recently, Valar participated in a $3M convertible note round in Multiple: 1.0x March 2017. 14 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810524 VALAR FALL 2016 UPDATE Fund 3 Core Investments STASH Headquarters: New York Company Description: Securities Held: Series A Preferred Shares Stash is a community for people who want to start investing and who don't want to rely on a Series B Preferred Shares black box service to do it for them. It's a platform to help people take ownership and Series C Preferred Shares become confident investors. Starting with as little as $5, Stash investors build a portfolio of investments that aligns with their interests, beliefs and goals. Initial Investment Date: 8/5/2016 Valar Cost Basis: $21.8M Recent Financing History: Current FMV: $46.6M Stash recently closed on a $40M Series C financing, at a $200M pre-money valuation, led by Coatue Management, with participation by Valar Ventures, Goodwater Capital, Jim Multiple: 2.1x Breyer and others. Valar also led Stash's $25M Series B Preferred financing round in November 2016, and co-led the company's $9M Series A Preferred financing round in August 2016. Octane Lending Company Description: Headquarters: New York Octane Lending is a technology-enabled lender focused on secured consumer lending Security Held: Series A Preferred Stock markets starting with powersports. Initial Investment Date: 4/7/17 Recent Financing History: Valar Cost Basis: $13.2M In April 2017, Valar led a $15M Series A extension round with participation from several Current FMV: $13.5M existing investors, including IA Ventures, Contour and Third Prime. Multiple: 1.0x IS I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810525 VALAR FALL 2016 UPDATE Fund 3 Core Investments X qonto Headquarters: Paris Company Description: Security Held: Series Seed Ordinary Shares Qonto aims to become the next generation bank for entrepreneurs, SMEs and startups by Series A Ordinary Shares providing an online service that will allow them to create an account in less than five minutes. Initial Investment Date: 9/30/2016 Valar Cost Basis: $8.4M Recent Financing History: Current FMV: $10.6M in March 2017, Valar led Qonto's E10M Series A financing with participation from Alven Capital, after Valar co-led the Series Seed round with Alven Capital in September 2016. Multiple: 1.3x Jetty Headquarters: New York Company Description: Securities Held: Series A Preferred Stock Jetty is a new kind of insurance company designed to help people in cities reach their goals faster by removing obstacles and risks. Its mission is to protect its customers against Initial Investment Date: 7/17/17 setbacks of all kinds, from fire and theft to wasted time and money. Valar Cost Basis: $8.1M Recent Financing History: Current FMV: $8.1M In July 2017, Valar Ventures led Jetty's $11.5M Series A financing, with participation from Multiple: 1.0x Ribbit Capital, BoxGroup, SV Angel and others. 16 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810526 VALAR FALL 2016 UPDATE Fund 3 Core Investments COYA Headquarters: Berlin Company Description: Security Held: Series A Preferred Shares The insurance industry is broken with its legacy infrastructure, organizational design and products built for brokers rather than around the customer. Coya is a fiillstack European Investment Date: July 2017 insurance challenger that has redesigned the insurance value chain working backwards from Valar Cost Basis: $6.3M the customer to offer scalable protection at the point of need with personalized predictive risk management and simple, transparent, personal insurance designed to manage life's risks Current FMV: $6.3M and join the customer's journey. Nlultiple: 1.0x Recent Financing History: Valar Ventures led Coya's €7.25M Series A financing in July 2017, with participation from Ribbit, E.ventures and others. 17 I CONFIDENTIAL & TRADE SECRET VALAR EFTA00810527 Interview with Brandon Krieg. founder of Stash app that lets you invest in the stock market for $5 - Business Insider BUSINESS INSIDER Stash, now valued at $240 million, lets anyone start investing in the stock market with just $5 AVERY HARTMANS JUL. 13, 2017, 2:35 PM Brandon Krieg spent more than 15 years working as a trader on Wall Street. But he left his career for the startup world after being asked a simple question from a financially savvy friend: "Where should I put my money?" Krieg and his coworker, Ed Robinson, had something of an "aha moment." "We said, 'If that's happening with a person who knows about this stuff, what is everybody else going through?'" Krieg told Business Insider. Krieg and Robinson started asking around, gauging how people were saving their money. But the answer to the question "Do you invest?" was always a "no," with the reason being that people just didn't know how or they thought it was something only Brandon Krieg, cofounder and CEO of Stash. rich people could do. SfUSII Krieg and Robinson realized then that they had an opportunity to help. They founded Stash, an app that lets you build a portfolio and start investing with only $5, plus it teaches you the ins and outs of the stock market. The company launched in October 2015 and just closed on a $40 million Series C led by Coatue Management. That brings Stash's total funding to $78 million and values the New York-based startup at $240 million, according to a person familiar with the company. Stash makes money by charging a subscription fee of $1 per month for accounts with less than $5,000. When an account has more than $5,000, Stash charges a fee of 0.25% fee. And the company is growing quickly: Stash now has about 850,000 customers nationwide. So how does it work? Krieg and Robinson knew that in order for Stash to catch on, they'd need to make the barrier of entry low — very low. Getting started with Stash requires only $5 and about five minutes to set up an account. hfip://www.businessinsider.com/stash-brandon-krieg-interview-investing-stock-market-2017-7 EFTA00810528 7/1812017 Interview with Brandon Krieg. founder of Stash app that lets you invest in the stock market for SS - Business Insider "People just want the chance Invest in your beliefs to start," Krieg said. "Our customers are typically starting with around $20 to Clean & Green $40, and they're turning on our feature called Autostash, Make your money even greener. which helps them invest either Invest in the power of clean energy weekly or biweekly." sources like solar and wind. Once you get started with Stash, the app evaluates how Defending America much risk you should be taking based on factors like Aerospace and defense companies your income and your assets. that provide the weapons our Then, it recommends troops need to fend off threats... investments based on what "The biggest problem I see right now is people doing nothing," Krieg said. you've told the app about your finances. You can also choose between a handful of packages based on what you're passionate about, like companies that supply parts to the military (Boeing, Lockheed Martin), companies that champion LGBTQ rights (Twitter, Gap, Time), or clean-energy companies (First Solar, Vestas Wind Systems). There's also an education component of the app, which Stash hopes to expand with its latest round of funding. The "Learn" tab will teach you things like the difference between index funds and mutual funds, or provide a glossary of investing terms. "People just need to understand that this stuff isn't that hard to understand," Krieg said. "We make it relatable and understandable." "There's this misconception, we believe, that because people don't understand it and never learned it that they're never going to learn it," Krieg said. "But we think that everybody should have an opportunity to start putting money away when they're young." Krieg said Stash's average customer is around the age of 29 and make about $45,000 per year, typically someone who's "hitting those critical life points" like starting a family or buying a house. While 29 falls firmly in the millennial generation — which is often critiqued for being bad at saving and investing — Krieg says the app is proof millennials do care, and that they shouldn't get all the blame. "[Saving] is not just a generational problem, it's an American problem," Krieg said. "My big competitor, I believe, is a checking account." hnp://www.businessinsider.com/stash-brandon-krieg-interview-investing-stock-market-20I7-7 2/3 EFTA00810529 Qonto launches its digital bank accounts for small companies I TcchCrunch TC News Video Events Crunchbase Ct ()onto launches its digital bank accounts for small companies Posted Jul 5, 2077 by Romoin Dillet (@romaindillet) f tf in 8+ Ir French startup Qonto has raised another $11.3 million (El 0 million) from existing investors Valar Ventures and Alven Capital. The company is now also open for business. You can now create a French business bank account on the company's website. Qonto wants to become the N26 of business accounts. While retail banking hasn't changed quickly enough over the past few years, it feels like business banking is even worse and has been stuck in the past. Everything is too expensive and it takes too much time to tell your bank to do something. Qonto wants to put you in charge of your account. It's a web and mobile service like the ones you're using every day, and you remain in control. So for €9 per month, you get a MasterCard, a French current account with an IBAN to receive payments and the ability to manage transfers and debits. But that's just the beginning as you can order new cards for €5 per month or create virtual cards for €2 per month. Qonto lets you manage your user base. If you hire a new sales hups.fitechcrunch.com/2017,07A15/qonto-launches-its-digital-bank-accounts-for-snudl-companies/ 1/7 EFTA00810530 7/18/2017 Qonto launches its digital bank accounts for small companies I TechCrunch You can block and unblock your card from the app, change the PIN code and get real-time notifications for each transaction. Administrators can adjust card limits and share transaction information with accountants. Other features are coming soon, such as an easy workflow to upload receipts and attach them to a particular expense — accountants are going to love this. Qonto will also make it easier to handle transfers in multiple currencies. In the future, you'll be able to connect your Qonto account with various fintech services you might also be using, such as Stripe, PayPal and GoCardless. This way, you'll be able to monitor and manage payments on all sorts of platforms from a single, unified interface. Behind the scene, Qonto partnered with Treezor for the back end. Treezor is the company that is actually managing your money. It generates current accounts and debit cards for Qonto. On the other side of the equation, Qonto tailors the experience and handles the relationship with its own customers. Other companies, such as iBanFirst in France, Seed in the U.S. and Tide in the U.K. are working on similar services with a few differences here and there — Tide just announced a $14 million funding round yesterday. While the market seems fragmented, those big funding rounds indicate that there seems to be a big opportunity to replace those expensive and ineffective business bank accounts. f tr in 8+ Jt, r hups://techcamch.com/2017/071O5/qonto-launches-its-digital-bank-accounts-for-snudl-companies/ 2/7 EFTA00810531 = Forbes MAR 23. 2017 rµ 06:14 AM 3.636 Peter Thiel And Max Levchin Bet On Freelance Economy Peter Johnston,founder and CEO ofLystable Peter Thiel's venture capital firm Valar Ventures has led a $10 million investment round in Lystable, an app for collaborating with freelancers, Lystable announced this morning. The round includes earlier investors such as Max Levchin's fund SciFi VC, Kindred Capital and Goldcrest Capital, as well as new backers Glynn Capital Management and Wilmont Ventures. Thiel and Levchin were co-founders of PayPal. EFTA00810532 Lystable, which was founded in London and has an office in San Francisco, enables companies to onboard freelancers, create profiles for them, assign work to them, track invoices and make payments. Freelancers can also use the platform for functions such as checking the status of invoices. "We are growing rapidly," says Peter Johnston, founder and CEO, a former designer at Google and alum of the prestigious Techstars accelerator. "Our plan is to hire people to cope with that growth." Lystable plans to use the money it raised to introduce a new payments product, ideally by the end of the year, and hire senior executives to help that part of the business scale, says Johnston. Target clients are companies in the media and tech sector that rely heavily on freelance talent, according to John Lystable is SciFi VC's "first investment focused squarely on the freelance space," said Eric Scott, partner in SciFi VC, based in San Francisco. Scott said the firm sees the data Lystable is collecting on freelance talent to be "enormously valuable." While it is relatively easy for small firms to hire freelancers, it can be trickier for multinationals to find freelancers who work well with their team and fit into their culture, he noted. "They address a problem no one else does," he says. Lystable raised $11 million in Series A financing in June 2016, bringing the total raised to $25 million since its founding in 2014, according to the company. Lystable says its users include celebrity and style site POPSUGAR, the NY Daily News, Airbnb, ESPN, CNBC, IDEO, and Google. Using Lystable's basic platform is free but companies that pay their freelancers through the platform incur a processing fee. Paying through the platform is an alternative to direct bank transfers, which can be costly and, in some cases, impossible--presenting challenges as multinationals tap into an increasingly global talent base, says Johnston. "The future of work is becoming more international," says Johnston. "It's going to be more important to get these freelancers paid, wherever they are on the earth." EFTA00810533 Lystable's 2016 revenue was in the $1 million-$3 million dollar range, according to Johnston. The company employs 4o people. There is significant competition in the freelance management space, with platforms such as Work Market and Upwork going after enterprise clients. Some companies, such as the Washington Post, have developed private talent clouds to manage freelancers. "I think there will always be companies that decide to build vs. buy, but in most cases it's still going to make sense to buy," says Scott. EFTA00810534 N26 founder Maximilian Tayenthal: Growth. redundant banks, profits - Business Insider BUSINESS INSIDER App-only bank N26 doesn't care about 'short-term profits' — it wants to build a European bank that will make rivals 'redundant' I OSCAR WILLIAMS-GRUT JUN. 29, 2017, 2:00 AM COPENHAGEN, Denmark — App-only startup bank N26 is one of Europe's hottest startups — and it's moving very fast. The Berlin-headquartered bank announced on Monday that it has partnered with fellow startup Clark to offer insurance through its app. It's one of a number of new products that N26 has launched this year, either built in-house or conceived through partnerships. Other launches include an overdraft you can apply for through your smartphone and a partnership with German investment platform Raisin. "Right now it's about making traditional banks redundant, in that we offer a product for every financial need of our customers," cofounder and N26 cofounder and CFO Maximilian Tayenthal. CFO Maximilian Tayenthal told Business Insider at the Money2020 conference in Copenhagen this Numbenth week. "Today, if you're a customer and you want to use a savings product you still have an excuse to use something other than N26. In the next 6 months, we want to bring one product and what we see as the best product in every category." http://www.businessinsider.com/n26-founder-maximilian-tayenthal-gmwth-banks-redundant-profits-2017-6 1/3 EFTA00810535 7/18/2017 N26 founder Maximilian Tayenthal: Growth. redundant banks. profits - Business Insider ING's head of fintech Benoit Legrand told Business • Insider last year: "Frankly, if you look at the neobank [as app-only banks are known] space — 826 4- sew. •• ••••(“d I they're flourishing everywhere but we're still waiting 40.00 for the business model to show up. Where is the money? Where is the return?" Tayenthal says: "We used to get people saying you don't have a business model. It's not true. We always had a clear monetization strategy. He adds: "What is true is that no one at N26 has a single monetary KPI in the first year after our launch. We were working on our customer base, on the branding, on launching products, building up the team. We didn't work on short-term monetization. We want to be an app that customers open once a day. N26's insurance partnership with Clark. N26 is "not focused on short-term profits," he says. For now, it's all growth, growth, growth. "We have positive unit economics which is cool, so every customer we add to the platform is making the business less negative," Tayenthal says. "When it comes to our revenue model, one has to understand that we operate at a very low cost. We acquire customers at a much lower cost. Secondly, we have much lower overheads. We have lower IT costs, everything is automated. We don't have branches." N26 is working on building more credit products and also has plans to expand its current product range across all the markets it is in. There are no immediate plans to get into business banking space but "in the long run we will launch a product there as well," Tayenthal says. One notable market where N26 is absent is the UK. The Times reported in April that N26 was set to launch in Britain by the end of the year, but Tayenthal is coy. He says: "It's a really interesting market and we are thoroughly looking at it," before adding: "I don't want to commit to any timeline." hnp://www.businessinsider.com/n26-founder-maximilian-tayenthal-gmwth-banks-redundant-profits-2017-6 2/3 EFTA00810536 If You Can't Real 'Em. Join Em: Landlords Embracing. Investing In Disruptive Forces - O113cc If You Can't Beat 'Em, Join 'Em: Landlords Embracing, Investing In Disruptive Forces May 04, 2017 I Ethan Rothstein, East Coast Editor Despite the real estate industry's reputation for adapting to technology at a glacial pace, Manhattan landlords have made a rapid about-face in the last few years. Pressed to stand out in the most competitive office market in the country, they have begun welcoming disruptive forces into their buildings and into their investment portfolios. Montreal-based on-demand meeting space provider Breather is a prime example of the rapid shift in mindset. Last year, Breather signed 50 leases totaling 8oK SF in New York City. Breather operates almost i4o spaces in 15OK to 175K SF here at the moment, but vice president of real estate Maggie Burns said the firm is planning to have more than 200 locations by the end of 2017. Breather, which also operates in Toronto; Los Angeles; San Francisco; Washington, DC; Denver; and London, leases spaces of up to 4K SF and provides full-services meeting spaces by the hour or the day. The firm started its Manhattan journey in Midtown South catering to tech tenants, but its growth potential reaches far beyond. Burns considers some of the firm's most recent deals — at 183 Madison Ave., the first in a Tishman Speyer building, and at 594 Broadway in SoHo, its first with Newmark Holdings — achievements because of the caliber of landlord that has recognized the company's potential. "Two and a half years ago, the best-case scenario for us to sit down with a Class-A institutional owner was for them to say, 'Seems interesting, let us know how it's going in six months,'" Burns said. "Now the level of excitement is palpable. We're getting a lot of inbound requests from landlords." Just as important as the landlords who recognize the firm's potential — which Burns called "massive" numerous times in a telephone interview Thursday morning — is the volume of major, multinational companies seeing a need for its service. Breather is now the official small meeting space provider for Estee Lauder worldwide, Burns said. "We are serving more clients than ever before, and I think we're just scratching the surface," Burns said. "We're now very focused on serving [major institutional] clients, but also thinking about how can we meet the hnps://www.bisnow.cornincw-yorkfnewsktffice/lareather-wework-rfr-realty-manhattan-74I19 1/3 EFTA00810537 If You Can't Beat 'Ern, Join 'Em: Landlords Embracing. Investing In Disruptive Forces - Office needs of these massive occupiers globally as they think about their real estate footprint? We see a really massive opportunity there." If that business model sounds familiar, that is because it is reminiscent of what the office market's biggest disruptor is also striving for. When WeWork struck a deal to manage nearly an entire building, 7oK SF, on behalf of IBM near Greenwich Village, it effectively sent a message to brokerage giants like CBRE and JLL that it is not content to simply serve as a landing spot for some companies. WeWork and Breather launched effectively as middlemen between landlords and tenants. Firms of their ilk now see offering real estate as a service — managing spaces directly on behalf of major clients — rather than short-term deals for freelancers and entrepreneurs — as the business model that has the best potential to scale. "From Day One, we wanted to be both B-to-C and B-to-B," Burns said, referencing platforms facing small consumers and large enterprise clients. "But two years ago, we started reorganizing around B-to-B, because the opportunity was just so massive." Likewise, landlords are not waiting for tech firms to come to them. Canadian giant Brookfield just invested tens of millions of dollars in Convene, another on-demand workspace company. On Tuesday, CBRE, Hines, Lennar, Macerich and Equity Residential were among the founding investors in Fifth Wall Ventures, an investment fund that raised $212M to invest in real estate startups contributing to the "Built World." "We're in the early innings of one of the single biggest shifts in the history of the U.S. economy," Fifth Wall's launch announcement reads. "The 'Built World' encompasses much more than buildings: it represents an entire ecosystem of the companies who own and operate physical space, and the innovative startups developing technologies that will transform, optimize and democratize access to these spaces. This ecosystem hasn't yet fully been realized." While technology was bound to change the way the real estate industry operates eventually, the acceptance of the change at every level of the industry in New York City has been significant, especially over the last year. And it is not just the technology itself, but the ethos and environment that technology inspires. "Fried Frank, which is one of the most prominent real estate law firms in New https:1/www.bisnow.cominew-yorkinews/office/breadier-wework-rfr-realty-manhattan-74119 2/3 EFTA00810538 If You Can't Beat 'Em. Join Em: Landlords Embracing. Investing In Disruptive Forces - Office York, in their office downtown, they put in a pool table," RFR senior vice president and director of leasing AJ Camhi said. "Law firms are usually about efficiency and offices, and in a million years you wouldn't think they'd encourage downtime. Park Avenue buildings are now putting in ping pong tables and open tenant lounges. It spreads the gamut now. It's pretty wild." For landlords like RFR, which owns the Seagram Building, attracting the right employees to the right project is more important than checking the hip, trendy boxes. "[The building] is an architectural masterpiece," Camhi said. "We are never going to redo that building to attract tech tenants. We were one of the first buildings to offer an executive lounge and a 7K SF terrace, but we're not going to put in pool tables." But the area where WeWork and Breather really succeed — personalized touches, service, programming — have landlords taking note. "We view our tenants as our partners, we want them to do very well. If they do well and we treat them well, then they grow within our building," Camhi said. "What WeWork has done has raised the bar for a lot of other landlords. A lot [of] amenities that are now springing up have a little to do with what WeWork provides. It's showing that level of service works." hap If/www.bisnow.cominew-yorklnewsioffice/breather-wewmic-rfr-realty-manhattan-74119 3/3 EFTA00810539 Fintech unicorn TransferWise reaches profitability. planning 'new financial services I TechCrunch Ts: News Video Events Crunchbase Ct Fintech unicorn TransferWise reaches profitability, planning `new financial services' Posted May 16. 2077 by Steve °Wear (@sohear) mi f VP in 3' d YOUR BANK IS OVERCHA RGING YOU Or. YOUR OVERSEAS most' IRAHSEERS V TronsisEvENNEENE, What's more mythical than a unicorn? A unicorn that is profitable. Six years after launch, TransferWise, the London-headquartered international money transfer startup, which was most recently valued at a reported $1.1 billion, has announced that it has finally reached profitability this calendar year and is "cash-generating". Breaking this down a little, the company says it's currently seeing £8 million per month in revenue, which extrapolates to a £100 million revenue run-rate, and is growing 150 per cent year-on-year and expecting to do the same this year. It also says over £1 billion is being moved every month, saving its customers what it claims to be over £1.5 million per day in foreign exchange fees. For reference, the most recent regulatory filing for the tax year ending March 2016, shows that TransferWise generated around £27.8 million in revenue and made a pre-tax loss of £17.4 million. It is yet to file its accounts for the year ending March 2017, but based on htipsWiechcninch.comt20I7i05/I6/finiech-unicorn-transienvise-reaches-profitability-planning-new-financial-seniees! EFTA00810540 Fintcch unicorn TransfcrWisc reaches pmlitability. planning 'new financial scrviccs' I TcchCninch Meanwhile, the startup has raised around $117 million in total (which is roughly £91 million at today's exchange rate). Top tier backers include Andreessen Horowitz, Peter Thiel's Valar Ventures, Sir Richard Branson, and most recently Baillie Gifford. "To have hit break-even just six years on from launch shows how strong the foundations of our business are," says TransferWise co-founder and CEO Taavet Hinrikus in a statement. "This is just the starting point. With the unique platform we've built, we're looking forward to creating a new kind of financial services for the future." Note the "new kind of financial services" part of the canned quote? That's because I understand the company is eyeing up additional customer pain-points that could also be solved under the TransferWise brand with functionality or services beyond helping you send money from one country to another. In a call with Hinrikus, he wouldn't be drawn on what they may be. However, when pressed he did say there were "no plans" to apply for a full banking license, for example, which would bring with it considerable further capital and regulatory requirements. In other words, we probably shouldn't expect a TransferWise challenger bank any time soon. With that said, let me speculate on what products I think the company could quite easily move into, should it choose to do so. Friend-to-friend or P2P payments within the same country, along the lines of Paypal's Venmo or Barclays Pingit, doesn't seem a stretch, given that TransferWise already has much of that infrastructure already in place. It also seems odd that the company doesn't offer its own debit card with low cost currency exchange when spending abroad, for example. Were TransferWise to do the latter, that would see it go up against Revolut, and a ton of other much more recent fintech startups that utilise MasterCard's low exchange rate, including all-your-cards-in-one app Curve, of which Hinrikus himself is an investor. What the TransferWise founder would say, however, is that having built a strong and trusted brand and now with a 1 million plus customer base, the company is in a great position to help its customers solve further problems adjacent to (or perhaps around the edges of) what it already offers. And it's true, the startup has, right from the get go, spent a lot of time and money on building the TransferWise brand and what is undoubtedly a great product. hupsfitcchcrunch.com/20I7J115/I6/finicch-unicorn-transicnvisc-reachcs-prolnability-planning-ncw-financial-scnices! EFTA00810541 Fintech unicorn TransferWise reaches profitability. planning 'new financial services' I TechCninch success over the last six years, its brand or product? "A billion dollar question," he replied, before pausing for thought and choosing his words in a carefully considered manner, as he is wont to do. "A product actually builds your brand. It's hard to have a great product which does not end up standing on its own two feet as a brand". To that end, I'm told TransferWise now claims 10 per cent of the international money transfer market in the U.K., a market still dominated by the major four banks who account for about 80 per cent by some estimates. Or, put over simply, the company is now the size of half a bank in international money transfer terms, something that hasn't gone entirely unnoticed by those incumbent banks. "If you look around there are a lot of other fintech companies but they are often selling their own product through a bank," adds Hinrikus. "In the fintech space, I believe we will only see a couple of new global brands being built, and I'm pretty sure we are going to be one of them". Lastly, here's a bit of fun. The TransferWise founder recently tweeted a copy of his first ever pitch email to TechCrunch, more than six years ago, which resulted in the fintech unicorn's first wave of coverage and revenue. The 700 person-strong and now profitable company has come a long way since then. Steve O'Hear @sohear 24 Jan I'm pretty sure I was first major tech pub to cover TransferWise and, I'm told, my story resulted in startup's first £1,000 transfer. twitter.comitaaveUstatus/... taavet hinrikus @taavet C Follow you were the first. always thankful. see pitch email below. cc @andruspurde pic.twitter.com/OzNfURZpXR 11:45 AM - 24 Jan 2017 • Palo Alto, CA hupsfitechcninch.com/20I7J115/I6/finiech-unicorn-transrenvise-reaches-prolnability-planning-new-financial-senices! EFTA00810542 US venture capital firm Technology Crossover Ventures buys Xem stake I afr.com FINANCIAL REVIEW Home News Business Markets Street Talk Real Estate Opinion Technology Personal Finance Leadership Life Ibme / Technology A01182017 81 1108 AM 1.10,141441A4. 18 2017 at 4 59 PM US venture capital firm Technology Crossover Ventures buys Xero stake ..cs44 Marlow A giant US venture capital firm that has backed Facebook. Spotify and Netfiix has emerged with a small stake in Kiwi cloud accounting provider Xero. Technology Crossover Ventures (TCV) spent SNZ28.5 million ($26 by John hicDuling million) to pick up a 1.3 per cent stake in Xero. according to a filing to the New Zealand Stock Exchange. Xero is listed on both the NZX and ASX TCV. which raised $U525 billion for its ninth fund last year. bought its shares from fellow US venture firm Matrix Partners. which has reduced its stake in the business to 8.5 per cent from 9.8 previously. TCV declined to comment. citing its policy for listed investments. While TCVs Xero stake is small.It represents the fund's first investment in the Australasian region in over three years and is another sign of growing interest among top-tier US venture capital firms for exposure to technology companies from this pan of the world. In 2014.TCV led a $30 million funding round for SiteMinder. a Sydney based hotel booking platform. Strong support The Indian arm of vaunted Silicon Valley fund Sequoia Capital has made a handful of investments on both sides of the Tasman over the past year. Other respected US VC hnp://www.afrromitechnologyfus-venturc-eapital-firm-tochnology-crossover-ventures-buys-xero-stakc-20170418-gymnn0 113 EFTA00810543 7/18/2017 US venture capital firm Technology Crossover Ventures buys Xero stake I afrrom firms actively investing in this region include Accel Partners (an Investor in Xero and Campaign Monitor. and an early backer of Atlassian) and Index Ventures (an investor in SafetyCulture and Culture Amp). Xero's ASX listing Ls up about 10 per cent this year. outpacing a 3 per cent rLse for the broader market. However, the stock has fallen about 55 per cent from its mid-2014 peak. "it Is routine that some earty-stage investors will rebalance their portfolios and we're thrilled to receive strong support from new investors who are ready toJoin Xero for its next phase of growth." the company's chief financial and operating officer. Sankar Narayan. said in an emailed statement TCV's share purchase - and Matrix's sale - continues the intrigue on Xero's shareholder register. Earlier thLs month the powerful Silicon Valley billionaire and Donald Trump adviser Peter Thiel sold shares worth about 323 million in the company. taking his stake below the 5 per cent threshold at which it must be publicly disclosed. The sale followed reports that Mr Thiel had been secretly granted New Zealand citizenship in 2011. stoking fierce debate in both the US and New Zealand. Mr Thiel's application had been strongly supported by Xero founder Rod Drury. while Xero's former chairman Chris Liddell recently quit the company to take up a White House advisory role in the 'Dump Administration. New Zealand's emerging technology scene has been attracting significant global attention lately. Last week. The New York Times wrote a glowing article on the country's ability to lure top tech talent to its shores. bnp://www.atbcomitechnologyfus-venture-capital-limmechnology-crossover-ventures-buys-xero-stake-201704 I 8-gymnn0 2/3 EFTA00810544