SenaHill Partners, a New York-based investment bank dedicated to fintech-related clients, has made its first foray into Asia by opening a Singapore office.
Frank Troise (pictured, left) has joined as managing director and CEO of Asia Pacific. He says the firm is looking to bring deals to Singapore’s virtual-bank applicants, among others.
He says Grab’s acquisition of robo-advisor Bento, assumed to be part of its ambition to have a full-service proposition for the virtual-bank license it wants to win, demonstrates that the other 20 applicants will also need to acquire the right fintech businesses.
North American fintech companies are also keener to expand into Southeast Asia, both for its growth as well as the reality of a cooler IPO market for tech companies in the U.S.
Troise has been a Singapore-based investment banker with SoHo Capital since 1997, where he helped build separate-managed accounts play Strategy Data Exchange, and founded Move 78, a digital-inclusion platform.
Justin Brownhill, co-founder of the firm (pictured, right), says the expansion follows work the firm did in which Troise provided advice. “We decided two great people working together was better than two people working separately,” he said.
Finance is being purchased rather than soldJustin Brownhill, SenaHill
In his view, Singapore is emerging as the region’s fintech hub. Digital banking and wealth-management services are consolidating and delivering financial services in a new, digital medium. Singapore’s virtual banks are at the forefront of this trend.
“Throughout history, financial services have been sold, not bought,” Brownhill said. “But now for the first time, finance is being purchased rather than sold to consumers. People want to lean in and pick their products, in lending, wealth, insurance.”
Fintech’s M&A boom
The expansion comes at a time when deal-making in fintech is booming: the past year has seen Morgan Stanley acquire E-Trade, Visa acquire Plaid, Intuit acquire Credit Karma, FIS acquire WorldPay, Fiserv buy First Data, and the London Stock Exchange’s planned acquisition of Refinitiv.
Brownhill says five years ago the goal of a fintech was to secure an exchange listing. “Back then less than 10% of capital raising was done by strategics,” he said. Today strategic buyers account for one-third of fintech deals, and in some areas, like insurtech, more than half.
This reflects the growing need among incumbents to move quickly to complete their technological and product stacks to meet the new demands of customers and counterparties.
There’s another reason for the surge in strategic acquisitions in fintech, says Gregg Sharenow, New York-based partner and CFO at SenaHill: cloud technology. “Five years ago, financial institutions wouldn’t touch fintechs operating cloud-based services, but now they’re comfortable with this,” he said.
SenaHill’s initial business proposition is to help match U.S. fintechs with emerging virtual banks or other partners in Asia. “But we’re also seeing innovation and technology from Asia that should be expanding to the West,” he said, citing virtual banks as a business model where Europe and Asia lead.
Investment banking in Asia is different than in the U.S. Clients in Asia pay far less in fees, tend to work through many banks rather than rely on a handful of bookrunners, and like to stuff market listings with cornerstone investors. Brownhill says the firm will need to win the trust of corporate managers and boards through good advice and access to the right opportunities.
SenaHill has three lines of business: principle investing, investment banking, and consulting. Three years ago it opened a London office under Todd Rupert, formerly of T. Rowe Price. It is one of two fintech-dedicated investment banks in the U.S., along with FT Partners; Torch Partners runs a similar business from London.