Our Game Plan
FOCUS
FinTech
Home Plate will focus on high growth, U.S. and international acquisition targets in the Fintech and Embedded Finance sectors. Examples of traditional sectors within Fintech include:
Embedded Finance
Enbedded Finance refers to the transformation of an existing consumer business through the integration of financial technologies, catalyzing a meaninful expansion in revenue and value.
Examples include:
E-commerce site offering a "buy now, pay later" option
Ride-hailing site allowing users to pay directly on the app instead of via cash or credit card.
Auto manufacturer electronically incorporating the application for insurance into the process of buying a vehicle.
Healthcare provider leveraging data for optimal coverage.
Real estate service closing a transaction on-line without an agent as an intermediary.
$230 Billion in embedded finance by 2025
Source: “What the embedded-finance and banking-as-a-service trends mean for financial services,” Mckinsey.com.
MARKET
DYNAMICS
Addressable Market
The Financial Services Industry remains well behind others in terms of penetration by disruptive technologies. To that end, the addressable Market for FinTech is large and rapidly expanding, particularly as payments and other embedded finance capabilities have a highly accretive impact on myriad consumer and enterprise applications.
- Large Legacy Base to Disrupt
We remain in the early stages of the life cycle for many segments of the FinTech market. For example, like Online Advertising in 2006 and Software as a Service in 2012 which exhibited 5-10% market penetration. Only 6% of US adults consider a digital bank to be their primary bank.(1) By 2019 and 2020, respectively, Online Advertising and Software as Service had soared to 49% and 23% penetration.(3) The secular tailwind for growth is enhanced in part by the large legacy base of Financial company revenues which are ripe for disruption.(2) Companies more than 50 years old represent 60-65% of the market capitalization for legacy Financial institutions.(3)
Source: BMC, Capital IQ, eWeek, Gartner Group, IAB Reports, Statista, and Home Plate. (1) 2020 Cornerstone Advisors survey, representing the % of adults who consider a digital bank to be their primary bank, reported in Forbes 7/20/2020. (2) 2021-2025 Growth projection by Research & Markets, 2020. (3) Home Plate estimate based on aforementioned sources.
- The Pandemic Hastened the Process
Innovation, evolving consumer/enterprise needs, and even the recent pandemic provide catalysts for the transition to financial technologies.
Source: “How US customers’ attitudes to FinTech are shifting during the pandemic,” Published December 17, 2020 by McKinsey and Company; Survey conducted by Plaid & The Harris Poll of more than 2,000 US adults, posted on Plaid.com on September 15, 2020.
Opportunity
There is significant capacity for expansion in FinTech & Embedded Finance, with myriad innovative startups. Despite the impact of COVID-19, FinTech financing activity remained robust last year with more than $45B in volume, representing nearly 2,000 transactions.
Number of FinTech Startups as of 2019
Source: Statista, as reported by Financeonline.com.
Source: “FT Partners, 2020 FinTech Almanac.”
HOME PLATE'S APPROACH
Methodology
Home Plate’s strategy and process are the culmination of over 100 years of combined experience in venture, private equity investing, mergers & acquisitions advisory services, equity research, investment banking, and senior management. Collectively, our sponsors, board members and advisors have sat on numerous public and private company boards, while sourcing and providing diligence for a variety of transactions. Two have led successful public offerings as Chief Executive Officers.
Our Team’s extensive experience differentiates Home Plate and enables us to contribute meaningfully across the core skills needed for a successful SPAC, including:
Deal Flow and Screening
• We possess proprietary deal sourcing channels across the FinTech and Embedded Finance landscape, putting us in contact with a plethora of corporate leaders and highly experienced investors at various ends of the spectrum.
• These relationships derive from decades spent operating businesses, investing in private and public firms, advising managements on transactions, sitting on boards of companies, and researching investment ideas.
• We source opportunities from these broad networks and historical partnerships as well as from proactive diligence on investment themes and ideas.
Process
• We have deep experience analyzing fundamentals, valuation and risk adjusted returns to ensure that we target investments with appropriately priced operational and execution risk.
• We also seek specialized support from respected industry experts and consultants in target sectors.
Execution
• Together with our board and advisors, we bring extensive transaction and deal structuring expertise within FinTech and beyond.
Value Add
• Our diverse backgrounds as investors, research analysts, advisors and company operators enable us to add value for management as they execute on their journey, including future needs related to capital, M&A and strategy.
We will employ a robust diligence process.
Goal: Long Term
Share Price Appreciation
Impactful Combination
Our strategic focus, experience and tested principles will enable us to generate compelling returns for investors through an impactful business combination.
Strategic
Focus
• Embedded Finance
Deep
Experience
• Public Market Insights
• Investment Expertise
• Operational Proficiency
Tested
Principles
• Appropriate Size and Valuation
• Robust Growth
• Clearly Monetizable Product
• Competitive Barriers
• Catalysts & Path to Profitability
• Benefits from our Capital/Expertise
• Sound Internal Processes
• Management Readiness
Lead to
Compelling Investor Returns
TARGET
GUIDELINES
Investment Criteria
Home Plate will target venture capital-backed growth equity opportunities where our collective expertise, relationships, and access to capital can significantly enhance the chances of success for an acquired Company. Though no single criterion will determine whether or not we pursue a business combination, we have identified the guidelines below for evaluating prospective targets. We will focus on companies that:
