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Published December 2021

Download a copy of the report here.

Report Highlights

In this report we explore two key themes within the capital market industry: 1) acceleration of roll-up activities to improve bottom line and 2) expansion of business services in personal finance advisory, data consulting and digital transformation.

Figure 1: Representative capital markets businesses we feature in our 2021 Capital Markets Landscape Deep Dive

Figure 2: We segment the capital markets industry into three distinct regions and 6 sub areas, each with a detailed market map, key trends, and market activity update

Capital Market Technology & Services Trends

2021 has so far been a robust year across the industry with strong IPO and M&A activity across nearly every vertical. To name a few in the financial institution space, PNC acquired Spanish financial group Banco Bilbao Vizcaya Argentaria (BBVA)’s US operations for $11.6 billion to become the fifth largest bank in the US.

Cryptocurrency trading companies and alternative trading platforms continue to soar to higher valuations as Coinbase concluded their IPO day at a valuation of $85.7 billion back in April, more than 10 times its valuation as a private company, and Robinhood raised close to $2 billion, at a valuation of $32 billion at its July IPO.

Both large strategy consulting firms and financial services incumbents have evolved in the business environment not only by rapid adoption of cloud consulting and more robust data analytics, but also with enhanced capabilities in growing areas such as risk and compliance consulting practices.

These sophisticated products and dynamic operational changes have raised demand in outsourced services such as alternative data sources, cyber security, risk management, and enterprise services. McKinsey & Company has strengthened its competitive positioning in the cloud consulting space through its acquisition of Atlanta-based cloud consulting provider Candid Partners, onboarding 100+ senior technical experts into the team.

We expect the digitalization of capital market to be a pervasive transformation, as both strategic players and sponsor-backed firms are increasingly adding innovative analytics, back-office management, and distribution solutions into their offerings through acquisitions. The U.S. capital markets fund over 70% of all economic activity in the country. At Evolve, we are committed to continuously sharpening our expertise and understanding of this specific domain.

Evolve’s Expanding Capital Markets Expertise

Evolve has advised on two recent transactions in the capital markets space. The most recent transaction was for the sale of a global leader in the trading services space to a preeminent NY-based fund with deep sector expertise (deal to announce in December 2021). The other was a data analytics firm on its capital raise with a group of private investors in the wealth management and securities sectors. These transactions reflect Evolve’s ongoing strategic focus on growing its footprint in the high growth SaaS and wealth technology sectors, one of our key areas of focus alongside Insurance and Lending.

The report is part of our research coverage which helps our clients take pulse of trends and transaction activity relevant to their space within the capital markets ecosystem. For entrepreneurs or sponsor-backed firms, this report may help you better understand the options available to you (such as a sale vs. a raise).

If you’d like to discuss the report in further detail or dive deeper into a specific sub-sector, feel free to reach out to the Evolve team at research@evolve-capital.co.

Evolve’s Leading Research

We also produce monthly transaction and market updates across our coverage areas. In November, we covered Insurance, Healthcare Tech and Financial Management Solutions. Our upcoming December issue will cover Specialty Finance / Alternative Lending, Business Process Outsourcing, and Payments.

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