Emerging Trends and Challenges

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Global Money Transfer Industry Overview Executive Summary We divide the non-bank Global Money Transfer industry into two broad, yet distinct segments: 1. “International Payment Specialists” Provide solutions to businesses and affluent consumers with foreign exchange and crossborder payment needs – Key growth drivers include heightened global trade among businesses and increased mobility of affluent consumers – Payments made on a bank account-to-bank account basis, average payment size $10K - $20K – Segment is fragmented, but growing quickly – Historically dominated by banks, which lack transparency, charge high fees and have limited online capabilities 2. “Consumer Remittance Providers” Largely serve unbanked / under-banked workers sending remittances to their home countries – Global immigration remains key growth driver – Remittances primarily cash-to-cash through independent agent networks, average remittance size ~$300 – Segment is mature, dominated by Western Union, MoneyGram, Ria (Euronet) and others – Rest of market fragmented with smaller players facing increasing regulatory costs and compliance requirements This report focuses on key trends within each industry segment: • The emergence of “International Payment Specialists” as a distinct and fast growing industry segment attracting significant interest from strategic buyers and financial investors • The disruption of the traditional “Consumer Remittance Providers” by new, emerging / fast growing entrants leading with mobile and other technology-based solutions 4
Global Money Transfer Industry Overview Executive Summary (cont.) FT Partners was the lead advisor to: -- OFX (fka as OzForex) in its dualtrack process, which resulted in a 100% sale / IPO (A$480 mm valuation) -- Custom House, which was acquired by Western Union ($370 mm) -- Currencies Direct, which was acquired by Corsair and Palamon ($310 mm) Widely recognized as the three most successful transactions in the “International Payment Specialists” segment • “International Payment Specialists” have emerged as a distinct and fast growing industry segment attracting significant interest from both strategic buyers and financial investors globally – Several years ago, Western Union made two notable strategic acquisitions to diversify into the segment: Custom House ($370 mm) and Travelex Global Business Payments division ($975 mm) • Part of strategy to offset slowing growth and margin compression in Consumer Remittance – Segment remains fragmented, but with numerous key players gaining traction – Highly successful OFX (formerly known as OzForex) IPO in 2013 significantly increased strategic and investor awareness regarding the attractiveness of the “International Payment Specialists” segment – Expanding number of PE-backed participants and large strategic players expected to accelerate transaction activity in the next 12 to 18 months • Recent transactions include Palamon’s and Corsair’s joint acquisition of Currencies Direct for $310 mm, Bridgepoint’s $352 mm acquisition of Moneycorp, Euronet’s $242 mm acquisition of HiFX, FTV Capital’s investment in WorldFirst and significant capital raises by Ebury, Currency Cloud and Flywire (fka peerTransfer) • On Nov. 18, 2015, Western Union announced that it submitted an indicative proposal to potentially acquire OFX while noting that discussions were still at a preliminary stage; on Feb. 8, 2016, OFX terminated talks with Western Union while also reporting lower than expected customer trading activity and financial results • Other notable firms include Cambridge Global Payments, Commonwealth Foreign Exchange, FEXCO, FIRMA, Monex and many others • The “Consumer Remittance” space has attracted a number of new disruptive entrants that are expanding channels and taking market share by offering lower pricing and leveraging online / mobile-based technology offerings – Xoom IPO in 2013 paved the way for other innovative companies to garner greater attention from the investor community and raise capital to accelerate their growth plans – Notable recent transactions include PayPal’s $890 mm acquisition of Xoom, $39 million capital raise by Remitly, $20 mm capital raise by Azimo, $100 mm raise by TransferWise and $40 mm raise by WorldRemit 5
Page 1 and 2: April 2016 Financial Technology Par
Page 3: I. Executive Summary
Page 7 and 8: Global Money Transfer Industry Tren
Page 13 and 14: Global Money Transfer Selected Indu
Page 15 and 16: Matt Oppenheimer, Remitly
Page 17 and 18: Global Money Transfer CEO Interview
Page 19 and 20: Gary McDonald, Cambridge Global Pay
Page 21 and 22: Global Money Transfer Gary McDonald
Page 27 and 28: Global Money Transfer Public Valuat
Page 29 and 30: Global Money Transfer Selected Publ
Page 31 and 32: “International Payment Specialist
Page 49 and 50: “Emerging Consumer Remittance Pro
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“Emerging Consumer Remittance Pro
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VII. Profiles of Selected Global Mo
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Currencies Direct Sale to Palamon a
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Profile of OzForex Transaction FT P
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Profile of OzForex Transaction FT P
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Profile of OzForex Transaction OzFo
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Profile of OzForex Transaction Sele
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PayPal Acquires Xoom for $890 mm Tr
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PayPal Acquires Xoom for $890 mm Xo
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PayPal Acquires Xoom for $890 mm Pa
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$300.0 $250.0 $200.0 $150.0 $100.0
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Euronet’s Acquisition of HiFX
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Euronet Acquires HiFX Transaction D
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Euronet Acquires HiFX Euronet Busin
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Bridgepoint Acquires Moneycorp Tran
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Euronet Acquires XE and IME
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Remitly Raises $38.5 million in Fin
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Remitly’s $38.5 million in Financ
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Remitly’s $38.5 million in Financ
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TransferWise Raises $58 million in
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WorldRemit Raises $100 million in S
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WorldRemit Raises $45 million in De
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VIII. Global Money Transfer Transac
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Global Money Transfer Selected Tran
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Announced Date Selected Transaction
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Announced Date Selected Transaction
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IX. Overview of FT Partners
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Overview of FT Partners Leading Adv
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Overview of FT Partners FT Partners
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Overview of FT Partners FT Partners
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Overview of FT Partners Proven Trac
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Overview of FT Partners Platform of
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Emerging Trends and Challenges

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