Embedded Finance Marketplaces

The fintech space is exploding in popularity and alternative financing -- a 21st century solution to traditional credit -- is blossoming alongside it. A recent report from the Economist Intelligence Unit reveals that more than $25 billion has been invested into fintech companies over the past half-decade, making it the most popular destination for venture funding. And many of those investors are backing some of AltFi’s most disruptive players, like Upstart and Prosper.

What got us here

Out of control lending in the traditional banking space is one factor that got us to this point. An overabundance of subprime mortgage loans, concealed by high home prices and buoyed by securitization, were a chief driver of the last Financial Crisis. As a result, U.S. regulators were forced to enact an array of new regulations to ensure lenders wouldn’t threaten the country’s financial system again. In the aftermath, new regulations placed on the financial markets included Dodd-Frank, Basel III, Basel II/II.5 and the Card Act. These bills have also stifled traditional banks’ appetite to lend, and the stats are clear: Since 2009, the total amount of revolving credit in the U.S. has declined by nearly $1 trillion. Between 2008 and 2012, traditional small business lending in the U.S. fell by a whopping $120 billion. According to Mercator Advisory Group analyst Alex Johnson, another reason customers are flocking to alternative lenders has to do with technology. “In my research, I found that the answer is less a matter of pricing (as many assume) and more about providing the fast, digital-centric borrowing experiences that today’s consumers want,” he explains in a blog post. AltFi customers appreciate the transparency of the borrowing process, the hands-on control they have over the process and the ease and speed of using the technology involved.

Lower rates: A third factor

A third factor boosting the AltFi space has to do with interest rates. Minimal overhead expenses -- in other words, increased efficiency -- allow marketplace lenders to pass those savings on to the consumer. Companies like Lending Club, for example, have hundreds of employees operating an online infrastructure without the need for physical branches. "Our innovative marketplace model, online delivery and process automation enable us to offer borrowers interest rates that are generally lower on average than the rates charged by traditional banks, credit cards or installment loans,” the company explains in a recent SEC filing. There are several laws that apply to both banks and alternatives alike, including SEC oversight, but lighter regulations also let alternative lenders keep costs down. Unlike banks, marketplace lenders are generally not subject to the same capital requirements, according to Morrison Foerster’s Ze’-ev Eiger.

A natural evolution

New regulations, along with technological improvements and lower rates for some, have allowed a natural evolution to take place. Sites like LendingClub Corp (NYSE: LC) and On Deck Capital Inc (NYSE: ONDK) have now become household names after stock market IPOs, while student loan-focused SoFi plans on going public within the next year. What’s more, many of Wall Street’s biggest names are supplying the gunpowder for the boom. Prosper,with a valuation above $1 billion, has funding support from JPMorgan Chase, Credit Suisse, SunTrust and Neuberger Berman. Barclays Accelerator is also heavily invested in the space, while Citigroup and Goldman Sachs have made 26 different bets on fintech companies since 2009.

So...just how big of a threat is AltFi?

New survey data from The Economist shows 70 percent of bankers believe fintech will disrupt traditional lending in the future. And more than half of respondents think banks aren’t doing enough to keep a competitive advantage over new alternatives. In 2011, Lending Club issued $258 million in loans. By 2014, that number had grown to $4.4 billion. Business-related alternative financing in the U.K., which has a larger market than the U.S. on a per capita basis, is projected to grow ten-fold by 2020. While one might assume that the vast majority of this growth has come from the 88 million or so under-banked Americans, Lending Club actually requires a minimum FICO score of 660 for its borrowers. That said, other lenders like fast-growing Avant Credit focuses on lower areas of the credit spectrum.

One simple truth

This means that the AltFi revolution is not just being driven by below-prime customers banks no longer want. It’s also being driven by qualified bank customers who are making the decision to take their business elsewhere.

Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content.

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MONEYLION

MoneyLion to Acquire Even Financial, Expanding Distribution Network and Enhancing Consumers’ Financial Access and Decision Making

NEW YORK, NY, December 16, 2021 -- MoneyLion Inc. (“MoneyLion”) (NYSE: ML), the award-winning digital financial platform, announced today that it has agreed to acquire Even Financial Inc. (“Even”), the category-leading embedded finance marketplace, to accelerate its mission of providing financial access and advice to hardworking Americans. The transaction provides for total consideration to Even’s equity holders of up to $440 million, using a convertible financing structure that values MoneyLion at its initial public listing price of $10 per share. Even’s investors include Goldman Sachs, American Express Ventures, SoFi, F-Prime Capital, MassMutual Ventures, LendingClub, Canaan Partners, and GreatPoint Ventures. Founded in 2014, Even digitally connects and matches consumers with real-time personalized financial product recommendations from banks, insurance, and fintech companies on mobile apps, websites, and other consumer touchpoints through its marketplace technology. Even’s infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial institutions and channel partners via its industry-leading API and embedded finance marketplaces. The acquisition strengthens MoneyLion’s platform by improving consumers’ abilities to find and access the right financial products to help them manage their financial lives. Even’s growing network includes over 400 financial institution partners and 500 channel partners, covering a breadth of financial services including loans, credit cards, mortgages, savings, and insurance products. The acquisition also expands MoneyLion’s addressable market, extends the reach of its own products, diversifies its revenue mix, and furthers MoneyLion’s ambition to be the premier financial super app for hardworking Americans. The strategic benefits of the acquisition include: Expanding MoneyLion’s target addressable market leveraging Even’s scalable embedded marketplace infrastructure, to tap into the rapidly growing $230 billion embedded finance industry (1) Increasing MoneyLion’s distribution capabilities across Even’s growing network of over 500 channel partners Broadening the range of products and services available within MoneyLion via 400 financial services partners covering a portfolio of consumer purchasing intents, including loans, credit cards, mortgages, savings, and insurance products Immediately positioning MoneyLion as a “must have” consumer finance product, leveraging MoneyLion’s AI-driven intelligence layer to match consumers with the right product at the right time in pursuit of improved financial access and outcomes across all FICO segments** Accretive to MoneyLion’s earnings with Even expected to add $90 million of revenue and positive EBITDA in 2022 (excluding synergies) “Even has revolutionized how consumers receive recommendations for financial services," said Dee Choubey, Co-Founder and CEO of MoneyLion. “Combining Even’s best-in-class recommendation engine with MoneyLion’s powerful first-party products and open architecture marketplace expands the range of products and services available within our platform, while delivering a new distribution channel for Even’s financial partners. Together, we can accelerate our mission of providing financial access and advice to hardworking Americans, reaching them where they are, and enabling them to make financial progress regardless of where they are in life.” Phillip Rosen, CEO and Founder of Even said, “At Even, our vision is to use machine learning to reimagine how financial institutions find and connect with consumers, while providing them with a superb and trusted user experience. By integrating Even’s powerful infrastructure technology with MoneyLion’s platform, we will be able to power their fast-growing Marketplace and provide consumers with the optimal mix of financial solutions for their needs, while greatly extending distribution for MoneyLion’s suite of products.” Even will continue to operate as an independent subsidiary of MoneyLion, led by Even’s current management team. Phillip Rosen will continue in his role as CEO of Even and will join MoneyLion’s executive committee. Even will collaborate with MoneyLion to accelerate the technology roadmap for its financial marketplace, as well as offer the full MoneyLion suite of products to Even’s channel partners looking to broaden their offerings to better meet the needs of their customers. Transaction Details MoneyLion will pay a total purchase price of up to $440 million to acquire Even, using a convertible financing structure that values MoneyLion at its initial public listing price of $10 per share, comprised of: A $360 million upfront payment comprised of $15 million in cash and $345 million in preferred shares that are convertible into 34.5 million MoneyLion common shares at $10 per share Subject to the successful achievement of certain revenue targets, a potential earn-out of up to $80 million, payable up to 8 million in preferred shares valued at $10 per share Unconverted preferred shares carry a 3% annual dividend payable in common equity or cash, at MoneyLion’s discretion Even employees will be subject to a lock-up of 12 months following closing of the transaction; all other Even shareholders will be subject to a lock-up until March 22, 2022 The transaction is expected to be accretive to MoneyLion’s 2022 earnings The transaction is expected to close in the first quarter of 2022, subject to regulatory approvals and other customary closing conditions Evercore is serving as financial advisor and Davis Polk & Wardwell is serving as legal advisor to MoneyLion. Broadhaven is serving as financial advisor and Goodwin Procter is serving as legal advisor to Even Conference Call MoneyLion has published a presentation to provide an overview of the acquisition, which is now available on MoneyLion’s Investor Relations website at investors.moneylion.com, and management will hold a conference call and webcast today at 8:30 a.m. ET to discuss the transaction. A live webcast and replay will be available here and on MoneyLion’s Investor Relations website. Please dial into the conference 5-10 minutes prior to the start time and ask for the MoneyLion to Acquire Even Financial conference call. Toll-free dial-in number: (888) 428-7458 International dial-in number: (862) 298-0702 (1) Embedded finance revenue forecast in 2025 based on Light Year Capital Markets estimates About MoneyLion MoneyLion is a mobile banking and financial membership platform that empowers people to take control of their finances. Since its launch in 2013, MoneyLion has engaged with 9.4 million hard-working Americans and has earned its members’ trust by building a full-service digital platform to deliver mobile banking, lending, and investment solutions. From a single app, members can get a 360-degree snapshot of their financial lives and have access to personalized tips and tools to build and improve their credit and achieve everyday savings. MoneyLion is headquartered in New York City, with offices in Sioux Falls and Kuala Lumpur, Malaysia. MoneyLion has achieved various awards of recognition including the 2020 Forbes FinTech 50, Aite Group Best Digital Wealth Management Multiproduct Offering, Finovate Award for Best Digital Bank 2019, Benzinga FinTech Awards winner for Innovation in Personal Finance 2019 and the Webby Awards 2019 People’s Voice Award. For more information about the company, visit www.moneylion.com. For investor information and updates, visit www.moneylion.com/investors and follow @MoneyLionIR on Twitter. About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (such as SoFi) and channel partners (such as TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com. Forward-Looking Statements The information in this press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial and performance metrics and expectations and timing related to potential benefits, terms and timing of the transaction. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of MoneyLion’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of MoneyLion. These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political and legal conditions; the inability of the parties to successfully or timely consummate the proposed transaction, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed transaction; failure to realize the anticipated benefits of the proposed transaction; risks relating to the uncertainty of the projected financial information with respect to MoneyLion; future global, regional or local economic and market conditions; the development, effects and enforcement of laws and regulations; MoneyLion’s ability to manage future growth; MoneyLion’s ability to develop new products and solutions, bring them to market in a timely manner, and make enhancements to its platform; the effects of competition on MoneyLion’s future business; or, the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that MoneyLion presently knows or that MoneyLion currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect MoneyLion’s expectations, plans or forecasts of future events and views as of the date of this press release. MoneyLion anticipates that subsequent events and developments will cause its assessments to change. However, while MoneyLion may elect to update these forward-looking statements at some point in the future, MoneyLion specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing MoneyLion’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements. Contacts Cody Slach, Alex Kovtun Gateway Investor Relations (949) 574-3860 ML@gatewayir.com MoneyLion Communications pr@moneylion.com The original version of this press release can be found at investors.moneylion.com

MONEYLION

MoneyLion to Acquire Even Financial, Expanding Distribution Network and Enhancing Consumers’ Financial Access and Decision Making

YAHOO! FINANCE

Yahoo! Finance: Even Financial Reaches $3 Billion In Credit Issued Milestone

Even has surpassed a significant threshold in credit issued, having now facilitated over $3 billion in consumer credit as of July 2021. The milestone is significant in the financial services industry, as Even has also expanded its platform to over 800 partners. Click below to read more at Yahoo! Finance.

HAVEN LIFE

Haven Life’s All-Digital Life Insurance Application Experience Launches on Even Financial’s Leading Life Insurance Search Engine

Even features the industry’s largest multi-carrier, all-digital life insurance marketplace
New York, New York – August 16, 2021 – Even Financial (“Even”), the leading search, comparison, and recommendation engine for financial services, has announced the launch of Haven Term and Haven Simple on its life insurance marketplace platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services customer acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions. With the addition of Haven Term and Haven Simple, Even has further expanded its extensive network of premium life insurance offerings, strengthening its position as the industry’s largest multi-carrier, all-digital life insurance marketplace. Haven Life, which offers Haven Term and Haven Simple, and is backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual), is known for its customer-centric approach and for its commitment to making life insurance more affordable and accessible. Haven Life’s term life insurance offerings will be available on Even properties and via its wholly owned subsidiary LeapLife. “In these uncertain times, the majority of U.S. adults want the financial security of high-quality life insurance, but are often dissuaded by the complex application process and need to complete an in-person medical exam,” said Phill Rosen, Founder and CEO of Even Financial. “Haven Life’s groundbreaking, all-digital application experience brings tremendous accessibility and peace-of-mind to consumers. We’re thrilled to welcome them to the Even platform.” The launch of Haven Term and Haven Simple on the Even platform enables consumers to get matched with medically underwritten term life insurance policies that they can apply for and, if approved, purchase instantly online. While most Haven Term applicants will need to take a medical exam, Haven Simple applicants do not. Haven Life’s offerings expand the variety of life insurance options already available to consumers through Even’s API. “Haven Life is committed to meeting life insurance customers wherever they are — and often, it's where they are managing the rest of their financial life," said Wade Seward, Head of Distribution Strategy at Haven Life. "On the heels of introducing even more affordable pricing for the Haven Term product, our partnership with Even Financial allows us to marry that affordability with greater accessibility to offer comprehensive financial protection to shared clients with ease and efficiency.” Even entered the life insurance industry in 2020 through its acquisition of LeapLife, a leading insurtech and licenced life insurance agency. Since that acquisition, Even has worked with its large network of channel partners to make the process of getting personalized life insurance fast, easy, and accessible for consumers. In addition to Haven Term and Haven Simple, products offered by leading insurance companies including Lincoln Financial Group, Pacific Life, and Mutual of Omaha are available through LeapLife, Even’s life insurance platform. Companies such as TransUnion and Lantern by SoFi rely on Even’s embedded finance marketplaces to power 100% digital personalized life insurance policy quotes for their customers, with live agent support. Even has continued its rapid growth trajectory in 2021 by reaching over $3 billion in consumer credit issued through its API and expanding its platform to over 800 partners. Earlier this year, Even was named one of “America’s Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (such as SoFi) and channel partners (such as TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity’s F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com. About Haven Life Insurance Agency Haven Life Insurance Agency, LLC (Haven Life) is re-thinking how people financially protect the ones they love. Haven Life is committed to delivering exceptional products, delightful purchasing experiences, and meaningful moments of service to the modern life insurance customer.

Haven Term is a Term Life Insurance Policy (ICC21 Haven Term in certain states, including NC) issued by C.M. Life Insurance Company (C.M. Life), Enfield, CT 06082. In New York (DTC-NY), and California (DTC-CA), and other states, it is issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. Policy and rider form numbers and features may vary by state and may not be available in all states. Haven Term is available through Haven Life Insurance Agency, LLC (Haven Life), whose agency license number in California is OK71922 and in Arkansas, 100139527. Both Haven Life and C.M. Life are wholly owned subsidiaries of MassMutual. Please note that issuing the policy or paying its benefits depends on the applicant’s insurability, based on their answers to the health questions in the application, and their truthfulness. MassMutual and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company are rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of June 1, 2021 and is subject to change. MassMutual has received different ratings from other rating agencies. Media Contact media@evenfinancial.com