WealthTech Report Q1 2024

WEALTHTECHREPORT APRIL 2024 WV.DRAKESTAR.CCM OURKEVTAKEAWAYS ONTHE WEALTHTECHMARKET WealthTech stocks confirmed their momentum in Q12o24 following their strongrebound in Q42o23,butarestill laggingvs.some FinTechverticals InQ12o24,investors shiftedtheirfocusonearly-stage companies,withfundraising levels surpassing those of later stage companies Strategicbuyersaccountedformorethan7o%oftotalWealthTechM&AdealsinQ12024 InQ12024,averageM&Adealvaluereached$145mvs.$98min2023highlighting acquirers focus on more mature assets InQ12024,WealthTechaccountedfor8.0%oftotalFinTechM&Aactivitywith78deals vs.11.8% in 2023 In2o24,thefragmentedwealthTechmarketisexpectedtocontinuetoincreaseits consolidation driven by further digitalization of legacy players and changingregulation *DRAKESTAR DRAKE STAR'S PARTNER.SAM LEVY ATTENDED SAM LEVYFaner "VWeaithTeci pilayers see he ootentiai for Ai to prfoumoiy transfom?their mgustry From supporting tne largest ever gererationai weaithLremsfer tc cuigrrentin user experence.the Af-opportunities are reaf.However panefists at the Gfobaf Weafth Tech Summit warn againstAr hafucinations and data privacy.Humansremain criticai innterpreting ane interfaeis with cjents an he resuits of Af cannotbecome a blackbox.but ratherneeds to be auditabfe.traceabiearciscloseoy iis s.c; (o t/e cieni.s." WEALTHTECH STOCKS EXPERIENCED A STRONG RECOVERY AT THEEND OR2O23 CONTNUNGINTO 2O24BUT ARE LAGGING VS.OTHERENTECH VERTICALS VALUATIONSOELEADNGWEALTHTECHSHAVEEXPERIENCEDASTRONGREBOUNDINQ12024 AFTER ADIFFICULT2023 EXAMPLES Increasing focus on EsG/sustainable investments cy ssotsragers is attracting younger generations seeking to invest incompaniescommittedto responsibleandsustainablepractices Recent approval by the U.S. Securities and Exchange Comrnission (SEC) of spot Bitcoin ETFs as oustord the orices n cryocure"cies Lo ell-t rne fugla, be elitmg tallhl r, I ke Ikot rhe: IN THE LAST 16 MONTHS, MAJOR WEALTHTECH DEALS WERE DOMINATED BYSTRATEGIC BUYERS N QT 2O24. STRATEGIC BUYERS ACCOUNTED FOR OVER 7O% OF ALLWEALTHTECH M&A DEALS. CONTINUING THE TREND OBSERVED IN 2O23 Share of AllwealthTech M&A Deals in G12024& 2023 Comments STRATEGICS Slra.eac: tayers' Mga rlivily sgwd ansegcy playerscig a iztion cffor.s tc coo witl rewig ccmpetitio~ c custemcr clena"cs. Aur newIehclogyxt:iFrte:l..r:dFrta.esI:ircra=c comcctitivcros:.G.. H ! :HrsII.J idonsirnment. osocc sll: w-on t comos to ivostmen: aroriles s.seueoc nc, suo :s e. fo .ir PRIVATEEQUITY Friwa.e egily &a 2:ti-il: rapple wih :ha lerge: Titse cll enws were. Hig+ m.'ns. rulex. ' orn'. rg chulkous Ilkneuvhring crexs sw:lurs.oso: all n asst vsl.: on In'l:tic* sp:r virrg fiare. al Yierkel vol:tility d*t - eerlsin.y Hgl+ yecp il .x c im -t.r:pr +nd .p Mi:d:dle dal AFTER SHARP DECREASE IN FUNDING ACTIVITY, INVESTMENT IS SLOWLYSTARTINGTOPICKUP In Q1 2o24, investors started shifting their focus back to early-stage companies as fears of recoss or :r a c:crsasing i-l:io?ooostocl rvcstor octim's~ I :.r. f.Jd::inrdecreased 48.7% from Q1 2023 to Q12024. -'s occ.r..c is driven by the current economic andgeopolitical environment *DRAKESTAR $98M IN 2023 wealthTechDealCountandAverageDealValuel>2022-Q12024 Comments: •I- Gl 2c22. wca thTec~ M&A cloa 5 acco-ocl tor a s ig'tl: lewr": r. "l k : ::s, drll H. r .n 2o23. llowever, ceso te the clecrc:sc, tne 3verae Msa cea vsl."as r sety 4:%, in <21 7072 vs 205 ••<=rll MkA #enl ur ue drnn=1 8 1% in Q1 7072 vs. 2 7075he increse in ve'uge ceals walu was cri-e t:y :lrcrrg :ti-il:trom str=c c kusrs THE TOP 5 STRATEGIC AND FINANCIAL CONSOLIDATORS IN WEALTHTECHFOCUS THER ACQUISITIONS ONTHE U.S.AND EUROPE WEALTHTECH MARKET OUTLOOK FurtherMarketConsolidatlon ••c*e [y x. 1? l Ianls, trlier torchdulalt l wxseulc, tnye ey t cw n! *eess l: fut u'cfilolll: dc i-uul . bdj.. u's he ual.?l_* J' Ild l: uewl'es less esllI+td-hl u. *? le!lde rluve- 2elrile lr u :l.ul id. urle 'Tetle. -hew -lsc feeu- llere lered c u. urrs, t*? ehy f.e i uud lier? uu sl. urrs Changing Regulations •tri rlaics. :f e s hsc Fn th :.a. fcs I :n :tcre trsr serly cl est ints.s. wIinte cr:liel'c "tclJrneat: iwts th sr sgorrent Tis crcwing rrrstiv wil fje emerc fcr walt~ c:ns. as -: scl eficient sclutior: m roslac stancarellhi * t-ffct ve y rvin cl's Al-Based Advisors ••A Fwhc "t dviso s revol.ticrizi tre rveshen. lanscase. Lewe'agi g sophi:t ct. a gri.ns, tfey rovide righlyewnl eo ivas.nt ":dvie, 'kat:l ng nes .o ocv d t* e:l sol..licrs to ct.sto'r*?+ As sselt nn'ret is xp H.ec t: ar at a G -'. t.n.i 2u27, su:h Al sol. ticrs wI tcne cri. cal kr crnins c alay rahed clc ope.il:rs Asset Classes Diversification ••-h cr:gancr: cf n #::st classs ik ystocrroncy. altcat'v. irvetmcns. ansl Fsc-foc.ssl aporun ties omsinsl w th a rwrr rrat'cn arrng cifnt rvtine on looohies ano aai~ ne aos: : ce: -al i,rls, in:casocl crmanc f*chnc cs faclineting 3rcoss totso asst:+n -n: ..s: tne yol.nger gonrat c~ is co ssd -: 'nnerit 3 staegerir g g trlisni- ass cfere