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THE MOST INNOVATIVE IN CREDIT SCORING
SERVICES
Data Science. Credit Scoring. Digital Finance
INNOVATION LEADER
2017
BEST LENDING PLATFORM
2017
TOP-2 FASTEST GROWING FINTECH
COMPANY IN EUROPE
April 2018
TOP-50 FASTEST GROWING
COMPANY IN EUROPE
March 2018
100 HOTTEST STARTUPS IN EUROPE
September 2018 September 2018
2
MARKET OVERVIEW AND COMPETITORS LANDSCAPE
PRODUCT & IT
KEY FINANCIALS AND FUNDING STRATEGY
3
4
2
EXECUTIVE SUMMARY1
3
• Industry: digital consumer finance
• Founded: 2015, HQ Barcelona
• Employees: 300+
• Products: Consumer instalment loans
• Geography : Europe (Spain & Poland), LatAm (Brazil & Mexico)
LEADING INTERNATIONAL FINTECH COMPANY
Executive Summary
Global Expansion: Europe and LatAm
Company Overview
ES 2015 (HQ)
PL 2015
BR 2016
MX 2017
BL 2012 (R&D hub)
Key Business Highlights
• Strong financial performance:
− $33m revenue for 9m18 (197% growth vs. 9m17)
− $64m issued for 9m18 (142% growth vs. 9m17)
− $55m gross portfolio in Sep-18 (175% growth vs. Sep-17)
− $55m annual revenue after 3 years of operations, plans for 2019 - $135m (including $6m credit card revenue)
• 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
18 55135
256423
63392
610
1 202
2017 2018F 2019F 2020F 2021F 2022F
Loans Credit cards
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LEADING INTERNATIONAL FINTECH COMPANY
Executive Summary
Our successful tractions was proved by top Recent Selected Awards
Fastest growing fintechcompany in Europe
Fastest growing company in Europe
100 hottest startups in Europe
To build number one online consumer lending platform across Europe (Poland, Spain) and LatAm (Brazil, Mexico)
To launch new consumer products:
credit cards with zero balance transfer
money transfer & payments
credit monitoring and educational tool
finance planner
Our strategy
1m+ registered users
c.20,000 new registered users weekly
$600m+ of revenue from loans by 2022
$1.2bn of revenue from credit cards by 2022
Key Numbers
Empowering underbanked to become financially included and live better lives by offering flexible, technology-empowered financial products
Our mission
The most innovative in credit scoring
services
5
RAPID GROWTH EMPOWERED THROUGH EFFECTIVE SCALING STRATEGY
ID Finance Solid Expansion Plan to Capture Market Opportunity in Latin America
Centralised IT and risk-infrastructure
Availability of fundingProfessional and motivated global and local team
2017 2018 2019 2020 2021 2022
Net Loan Portfolio
Launch in Europe LatAm expansion Product diversification Further scaling
Spain. Jun-15
Poland. Dec-15Hired teamLaunched unsecured lending
Expand product range: Credit cards (zero transfer
balance) New consumer loans Overdrafts Current accounts/deposits Currency exchange tools Money transfers
Brazil. Nov-16
Mexico. Sep-17Created pool of loyal customers
Achieving profitability of credit card business
Exploring scaling opportunities in other countries
Major factors for effective scaling
2016
$1.3bn $2.5bn$109m $364m$36m$13m$3m
Consumer loans
Credit cards
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GLOBAL TEAM OF FINANCIAL SERVICES AND TECHNOLOGY EXPERTS
Strong Management Team
Co-founder, CEO15+ years of work experience in banking
Previously held various positions at Deutsche Bank, Renaissance Capital and RBS in London and Moscow
Graduated from Cambridge University with a degree of Master in Economics
Co-founder, COO10+ years of experience in banking and finance
Previous experience: Deutsche Bank, London
Holds Chartered Financial Analyst degree
Graduated from Imperial College with a degree of Master in Finance
Chief Financial Officer (CFO)Boris Batin PhD Alexander Dunaev CFA Kieran Donnelly
19+ years of experience in financial services
Previous experience in General Electric and
Standard Chartered BankGraduated from ESADE University (Barcelona, Spain) with a degree of MBA
Chief Risk Officer (CRO)Ekaterina Kazak
10 years of work experience in risk management
Previously worked as Head of Russia & CIS Experian Analytics
Graduated from Moscow State University of Economics, Statistics and Informatics
Chief Marketing Officer (CMO)
Alessandro Ceschel
11 years of professional experience in Digital Marketing and international IT Projects
Previously developed online internet businesses B2C, B2B and P2P in Spain –Ulabox, Logismarket, Socialcar, worked in MNC (Nestlé) and in early stage startups
Graduated from Padova University with a Master in Industrial Engineering and Business Administration
Country Manager (Mexico)
Yannick Del Ponte Bonilla
20+ years of experience working for financial multinational companies.
Previously held senior management positions in Servicios Financieros con Valor, Pretmex and Fullerton Financial Holdings
Certified in Financial Institutions for Private Enterprise Development at Harvard Kennedy SchoolPost Graduate Certificate in Corporate Finance at Universidad Intercontinental
Javier Lopez
30+ years of management experience in banking and finance
Served as CEO of 4finance
Holds senior roles at Standard Bank Group, MDM Bank and Renaissance Group
Board member
Country Manager (Brazil)
Antonio de Brito
12+ years of experience in financial services
Previous experience in Asset Management industry as well as in Enova (multinational online lending company) as Strategy and Operations Manager and Security Asset
Graduated from Duke University at North Carolina, USA, with a degree of MBA (Operations and Strategy)
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MARKET OVERVIEW AND COMPETITORS LANDSCAPE
PRODUCT & IT
KEY FINANCIALS AND FUNDING STRATEGY
3
4
2
EXECUTIVE SUMMARY1
8
33%
37%
37%
40%
42%
52%
69%
World average
Spain
Australia
Brazil
UK
India
China
$40 bnrevenue by
2028 (BR+MX)
Money transfer & payments
Pivotal Moment for Latin America FinTech Market
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%
*Adoption is a percentage of respondents in each market who reported using one or more FinTechservice in that category. Calculated based on survey prepared by E&Y in 2017
FinTech adoption* (world), 2017
Adoption in Brazil is anticipated to grow up to 69%*
Insurance
Savings & Investments
Financial planning
Borrowing
The major FinTech categories
9
7079
89100
113
127
142
$0
$20
$40
$60
$80
$100
$120
$140
$160
2016 2017 2018 2019 2020 2021 2022
Pivotal Moment for Latin America FinTech Market
FinTech market is rapidly growing in LatAm and expected to generate $40bn in the next 10 years with transaction volumes future CAGR of 12%
Transaction volumes on LatAm FinTech market ($bn)
Actuals Forecast
Sources: Statista, E&Y survey (2017), Goldman Sachs
303
648
802
2008 2017 2022
Sources: EIU, Goldman Sachs, Central bank of Brazil, ID Finance
Household loans in Brazil and Mexico, $bn
$100bn unsecured consumer loans outstanding
with 7% CAGR expected in Brazil and Mexico
10
Low competition: 5 banks controlling c. 80% bank assets which results in the world’s third highest borrowing costs
Outdated technology: offline and bureaucratic business processes
Digital Banks Poised to Revolutionise LatAm’s Banking Sector
Internet and mobile penetration increases: Brazil is the fourth-largest by number of smartphone users in the world (80 mln)
New distribution channel for financial services makes “branch”-banking obsolete
Only 14 bank branches per 100,000 inhabitants and only few small alternative consumer lenders (Kueski, Kubo, Albo, Prestadero) cause strong demand in banking services
Young, educated, tech-savvy and financially literate generation enters the
period of greatest productivity
Structural reforms, fiscal discipline, falling nominal interest rates will unlock GDP
growth during next 2 years
>50% Brazil & Mexico population is underbanked
Key drivers of digital banking
growth in Brazil and
Mexico
Economic recovery
Demographic bonus
Underbanked population
Technology disruption
Arising Mexican market
Uncompetitive 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
11
05
1015202530
Brazilian Credit Card Market Sizing
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
Monthly transactions made by credit cards, $bn
Credit card outstanding balance, $bn
30%
12%16%
4%3%
35%
ITAU Banco De BrazilBradesco SantanderCaixa Other
$61bn
Top 5 players represent 65% of the market (2017)
Credit card transactions
represent
c. 20% of household
consumptionSources: MarketLine, ABECS, Companies’ Reports, ID Finance analysis
55 6167
Forecast
* Interest free transactions, associated with an instalment plan or not.** Regular instalments (non interest free) only.*** Includes cash withdrawals
0
20
40
60
80
Revolving*** Financing** Non-financing*
Annual Monthly
Major traditional banks
Banco do Brasil 195.7% 9.5%
ITAU UnibancoBM 218.3% 10.1%
Caixa 252.4% 11.1%
Santander 254.8% 11.1%
Bradesco (Brasil) 255.0% 11.1%
Average (major banks) 235.2% 10.6%
Digital nature banks (certain examples)
Banco Inter 95.8% 5.8%
Banco Original 369.4% 13.8%
Agibank 514.2% 16.3%
Nubank n/d 2.8%-14.0%
Next n/d 15.1%
Statistics on interest rates
12
9331,079 1,129 1,161 1,212 1,281 1,362
$0
$500
$1,000
$1,500
2016 2017 2018 2019 2020 2021 2022
537 583 633 687747
811880
$0
$200
$400
$600
$800
$1,000
2016 2017 2018 2019 2020 2021 2022
European Fintech Market Trends
Europe has world average adoption of 33% with Spain in Top-6 markets with the highest FinTechadoption. The level is expected to grow from 37% to 56%
European FinTech market is expected to grow with 9% CAGR until 2022
Transaction volumes on European FinTech market ($bn)Actuals Forecast
Sources: Statista
Key European market trends
Sources: EIU
Household loans in Spain and Poland, $bn
$1000bn+consumer loans outstanding with
5% CAGR (2017-22) expected in Spain and Poland
Spain and Polandconstitute only 8% of European FinTech market
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)
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Disruptive Consumer Focused Digital Banks (globally) Equity raised 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 Last valuation: $4bn (Oct-18).
$707m
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. In June 2018 had passed the 2 million user mark (doubled since November 2017) Last valuation: $1.7bn (Apr-18)
$340m
UK-based mobile-only bank . Launched in 2014. Focuses only on savings accounts and mortgage offerings In 2017 passed over £900m in deposits. Last pre-money valuation is $370m (Mar-18)
$480m
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 Last pre-money valuation is $280m (Nov-17)
$140m
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 Customer base has grown 20%/month during 1H2018.
$190m
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. Claimed a customer base of 850,000, with the goal of having 5,000,000 customers by 2020
$210m
Global Digital Bank Case Studies
Professional team Access to funding Loyal client baseKey ID Finance competitive advantages
ID Finance unlocks talent pools in countries outside LatAm and shares international expertise
ID Finance may use internally generated income to scale and grab market share
ID Finance may leverage existing loyal customer base offering new banking products and driving LTV up
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MARKET OVERVIEW AND COMPETITORS LANDSCAPE
PRODUCT & IT
KEY FINANCIALS AND FUNDING STRATEGY
3
4
2
EXECUTIVE SUMMARY1
15
WE TARGET PEOPLE LIVING IN LARGE CITIES WHO ARE UNDERSERVED BY TRADITIONAL BANKS
Understanding Our Clients
Geographical expansion strategy
Disposable income
25-45 years old
Age
c. US$1000 monthly for LatAmand EUR1500 for
Europe
Availability of product across the
whole countries presence
Has a smartphone
Active card user
Has bank account, but partially
underbanked
Active loan users
Have/had any loan outstanding (car,
mortgage…)%
16
WE PLAN TO OFFER A RANGE OF FINANCIAL SERVICES ON A FULLY MOBILE PLATFORM IN LATIN AMERICA
Technology-Powered Products that Solve Customer Pain Points
ACQUISITIONDevelop unsecured lending and build up loyal customer base
1RETENTION
2 Collect data, monitor and instantly address issues to increase retention and lower churn
Steps:
NEW PRODUCTS3 Offer new products to existing
customers – credit cards, payments, FX etc.
In LatAm, ID Finance plans to …
... develop existing products
… launch new consumer products
• Build number one online consumer lending platform across Europe (Poland, Spain) and LatAm (Brazil, Mexico)
• 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
%
$
17
HIGHLY EFFECTIVE CLIENT ACQUISITION AND RETENTION STRATEGY
Our Products and Client Acquisition Funnel
Term
APR
Europe: $25 - $1900LatAm: $50 - $750
Loan size
Europe: 50% - 100% annuallyLatAm: 15% - 30% per month
1 – 12 months
7m website visitors (vs. 2.5m for 9m17)
709k applications(vs. 352k for 9m17)
161k loans issued(vs. 81k
for 9m17)
23%
90%
10%
Conversion to applications
Approval rate
Retention rate
Client Acquisition Funnel (for 9m2018)Product overview
18
PROPRIATERY IT PLATFORM AND IN-HOUSE IT TEAM
IDF Technology Overview
Web and mobile
application
Ongoing IT-support
High Technologies
Park
Dedicated developme
nt team
Proprietary developed IT platform makes personal banking services available for thousands of active mobile users automazing regular banking activities
Highly efficient org structure: Front-end, java, back-
end developers Quality assurance Business analysts
Using user-centric approach constantly improve usability, accessibility, empower high-quality visual designs and front-end development
Technology
1
3
6
25
4
CRM support Security issues Regular back-ups
Located in the center of IT innovations - Belarus High Technologies Park
FlexibilityIn-house developed IT infrastructure allows IDF to adapt to changing fintech market conditions faster than competitors
Top-25 IT companies in Belarus* Chief Technical Officer (CTO)
Pavel Shareyko
13 years of experience in software development, including development of high-load applications and financial systems
Previous experience: Lead developer at Itransition
Graduated from Belorussian State University* dev.by
19
Data-centric approach to risk-management
Credit history
Internet presence
Fraud prevention
Behavioural data
1 2
34
The data-driven client assessment of the client is key to a robust credit risk management framework
ID Finance uses market leading risk-management solutions, in addition to proprietary technology empowered capabilities
20
MARKET OVERVIEW AND COMPETITORS LANDSCAPE
PRODUCT & IT
KEY FINANCIALS AND FUNDING STRATEGY
3
4
2
EXECUTIVE SUMMARY1
21
4 1855
136
349
1 034
1 838
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM
X16 GROWTH IN 4 YEARS
Key operating metrics performance
Reveune ($m)
152%CAGR
(2017-22)
22
0,04 0,1 0,3
0,7
1,5
3,6
5,5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM
X45 GROWTH (2017-22)
Key operating metrics performance
Number of loans/cards issued (mln), cumulative and growth (2017-22)
45x
Net loan portfolio ($m)
140%CAGR (2017-
22)
3 13 36109
364
1355
2563
0
500
1,000
1,500
2,000
2,500
3,000
2016 2017 2018 2019 2020 2021 2022
Lending: Europe Lending: LATAM Credit Cards: LATAM
23
STRONG UNIT ECONOMICS
P&L Flow 2022 (in $ m)
247 247 247 247 247 247
107 107 107 107 107
314 314 314 314
385 385 385
608 608
175
1837
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Interest income Interestexpenses
Provision andwrite off
Operatingexpenses
Administrativeexpenses
Tax expenses Net income
24
0.0 0.0 0.0
100.0
0.0
100.0
0.010.8 16.7 23.860.0
286.8
997.8
1,142.6
36%
13%14% 15%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
200
400
600
800
1,000
1,200
2016 2017 2018 2019 2020 2021 2022
New equity additions, US$m New debt issuance, US$m Capital adequacy ratio
ACTIVE SCALING WHILE KEEPING HEALTHY LIQUIDITY RATIOS
Funding needs
12% - minimum acceptable level
Total equity need for 5 yearsUS$200m
New debt issuance
US$ 2.5bn
Healthy liquidity ratiosCapital adequacy ratio above 12%
25
Alexander DunaevCo-founder, COO @ ID Finance
Thank you!
Boris BatinCo-founder, CEO @ ID Finance
26
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• 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 noreliance should be placed on such information.
• This presentation contains forward-looking statements, which include all statements other than statements of historicalfacts, 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. Suchforward-looking statements involve known and unknown risks, uncertainties and other important factors beyond thecompany’s control that could cause the company’s actual results, performance or achievements to be materially differentfrom 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 strategiesand the environment in which it will operate in the future. These forward-looking statements speak only as at the date ofthis presentation. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisionsto any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or anychange in events, conditions or circumstances on which any of such statements are based.
Disclaimer
