PETAH TIKVA, Israel, Jan. 12,
2021 /PRNewswire/ -- Migdal Insurance announces a
step that places it on par with the world's leading investment
institutions: establishment of the Next Generation Finance
specialty fintech investment arm. This investment arm plans to
invest at least 1-2 billion $ in fintech companies, startups and
funds in the next two years, with the global perspective of a
significant financial player.
Ran Oz, CEO of Migdal Insurance, said: "The growing
fintech sector has recently gained substantial momentum and
maturity. We are high achievers, aiming to position ourselves as a
leading financial investor not only locally, but also globally.
Maintaining an edge in this innovative field will allow us to
generate high yields for savers and enrich our investment
portfolio with the new generation of finance. This is yet another
step in our investment strategy of a strong shift from traditional
finance to innovative financial sectors that we deem as the future
leaders of the finance industry. Having honed our expertise in this
field over the recent months, accumulating extensive knowhow, we
are now ready to launch an extensive investment operation."
Migdal views fintech as a significant growth engine and intends
to channel a substantial portion of its activities and investments
to this sector. To this end, Migdal has created a broad
infrastructure for fintech investments, including processes for the
examination of investment opportunities with leading global
entities and the establishment of a professional team comprising
fintech analysts and experts, which is personally headed by
Guy Fischer Chief Investment Officer
in Migdal Insurance. Moti Shatner,
long-standing entrepreneur and esteemed senior consultant in
fintech, who is among the founders of Bluevine, provides consulting
and guidance to the investment arm.
Concurrently with the establishment of the investment arm,
Migdal announces an investment of US$ 100
million in consumer loans in the
United States. The investment will be carried out through
Pagaya, a fintech company that manages investments in U.S. consumer
loans using a technology-based decision-making process. The
companies have also agreed on an option (soft commitment) for a
future investment of US$ 150 million in the various
instruments.
Changes in the business environment in recent years, and more
notably during the coronavirus crisis, have significantly
accelerated the development of fintech, which has achieved a
significant foothold in the financial industry, challenging the
existing order and affecting both organizations and consumers.
Today, the fintech sector is commonly believed to have reached
maturity and already comprises more than a few companies with a
proven track record.
In 2019, investment transactions in fintech companies exceeded
3,280, aggregating more than US$ 150
billion, as reported by KPMG. According to CBInsights,
within six months, from September
2019 to April 2020, the number
of fintech unicorns increased by 76%, and their estimated
value rose by 74%, from US$ 144.9
billion to US$ 252.6
billion. In September
2019, the global rate of adoption of fintech solutions by
consumers was very high, most notably in developing countries,
China and India leading the trend, with 87% of consumers
implementing fintech technologies (as reported by EY). In the
Western world, too, adoption rates were high, reaching 73% in
the Netherlands, and 71% in
Ireland and the UK.
Migdal plans to become a central player in this field,
capitalizing on its advantage as a dominant institutional investor
with the largest investment portfolio in the sector, its solid
investment infrastructure, expert and experienced team and its
close ties with investment entities in Israel and overseas, that enable it to
identify diverse opportunities. Migdal will base its investments in
fintech startups on equity and/or debt investment models and will
continue to guide its portfolio companies, including in following
financing rounds. The company intends to focus on advanced
financing rounds, but may also consider some first-round
investments.
Migdal will pursue opportunities in all fields of finance that
are currently affected by the fintech industry, including
insuretech, capital market trading, lending (in lieu of bank
credit), personal finance (day-to-day money management tools),
payments and debits, money transfers, blockchain, risk management
and more.
For more details, please contact Michael
Swift, Head of fintech investments, Migdal Insurance /
micaesw@migdal.co.il
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SOURCE Migdal Insurance