A forecast for 2019 from data company Pitchbook sees shifts toward bundling of services in shared mobility applications and in fintech and predicts continued elevated autonomous vehicle partnerships and M&A activity.

Pitchbook also expects technology conglomerates to make a grand entrance into the financial services sector by introducing large-scale financial products, major acquisitions, and partnerships.

Pitchbook said it expects automakers, ride sharing companies an investors in the mobility space to pivot toward last-mile, micro-mobility and bundled mobility-as-a-service solutions. It sees a shift away from pure-play ride-sharing apps, resulting in higher levels of M&A activity.

Uber, for instance, has shifted toward additional offerings such as Uber Eats and bought Jump Bikes for about $200 million in April. Pitchbook said Uber may acquire Lime or Bird.

Photo courtesy Uber

Uber self-driving car

It points out that venture investors have poured $3.1 billion into 34 startups that target last-mile urban transportation using shared bicycles and scooters. That has led to an upward trend in VC valuations of micro-mobility deals, reaching a median value of $400 million.

By bundling services, these companies can gain additional users and scale  quickly, Pitchbook said.

Prediction: elevated autonomous vehicle M&A

Pitchbook expects automakers, suppliers and technology players in the autonomous vehicle space to continue vertical integration and consolidation, especially as leaders launch commercially available ride-sharing networks.

Still, Pitchbook warns, given the immense computational challenge of fully autonomous driving, “Commercialization could be further out than the most bullish estimates.”

It predicts that acquisitions and partnerships related to autonomous vehicles will be key for competitors to close the gap with Waymo, which Pitchbook views as the leader in the space.

Prediction: consumer fintech will move toward bundling

Retail banks will try to claw back market share in the fintech space, Pitchbook predicts. In turn, emergent fintech companies will try to retain their customers and further monetize their base by consolidation and product diversification.

So far, fintechs attacked the retail banking value chain via a  piecemeal approach, offering targeted, dedicated key services, unbundling the retail banking products. Pitchbook expects that trend to reverse course in 2019.

Source: Pixabay

It also sees consolidation within the sector increasing, with retail banks acquiring fintechs and established fintechs merging or acquiring others to increase services offered and market share.

Prediction: tech conglomerates will enter financial services

Tech giants with digital prowess and strong understanding of the consumer experience will look to expand into new, larger markets.

Since the financial crisis, Pitchbook notes, consumer trust in traditional financial systems has eroded and was further degraded by the Equifax data breach and other controversies.

Pitchbook believes that has created a “battleground for new, non-bank competitors to enter the field.” The most formidable of these: the large, public tech conglomerates such as Facebook, Amazon, Apple and Google.

Retail banks, long contending with disruption from fintech startups, may now have to cope with deep-pocketed tech giants entering financial services. They have already shown interest, Pitchbook points out, via partnerships, investments and acquisitions.

Those include, for instance, Google’s various forays into financial services, such as its peer-to-peer payments service, Google Pay (formerly Google Wallet) and partnering with Lending Club to facilitate financing to Google partners. More recently, it invested in fintech health insurer Oscar Health.

Other areas it sees these large tech companies entering include  consumer credit, loans, wealth management and insurance.