Heavily-Regulated Industries Prime for Disruption, Finds Silicon Valley Bank Survey

Global Innovation Bank Convenes Marketplace Founders and Investors to Discuss Opportunities in Funding and Growth

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Nov 04, 2014, 08:00 ET

NEW YORK CITY, Nov. 4, 2014 /PRNewswire/ -- Heavily-regulated industries such as healthcare and finance are seen as prime targets for disruption by marketplace innovators, according to a survey released today by Silicon Valley Bank. The Marketplace Disruption Survey found that just over half of participants said the healthcare and finance industries (25 percent and 26 percent, respectively) were most likely to see shakeups based on the online marketplace model.

The survey was conducted at Silicon Valley Bank's Marketplace Mashup on October 14 in New York City. Nearly 100 marketplace founders, venture capital and private equity investors and industry veterans from around the world came together at the exclusive event. Participants included Airbnb, Uber, oDesk and Andreessen Horowitz, among many others. The Mashup is part of SVB's effort to engage and connect founders and CEOs with industry visionaries on topics related to the future of the innovation economy.

"Marketplaces like Uber and Airbnb are so successful because their innovations addressed frustrating issues for consumers in industries that were desperate for change," said Shai Goldman, Managing Director for Silicon Valley Bank in New York City and host of the one-day, invite-only event. "It's no surprise that disruptive thinkers see significant opportunity within healthcare and finance marketplaces next. The trend toward new vertical marketplaces and expansion based on mobile adoption will continue to change how we access and consume these types of services."

"Despite a fuzzy definition of the word 'marketplace,' and the variety of businesses that exist in this category, it is clear that they are going to increase in number. They're resilient and antifragile," said Marketplace panelist and Haystack Fund investor Semil Shah. "I see four types of businesses that could be classified as a marketplace: pure marketplaces connecting buyers and sellers directly, curated marketplaces that vet providers on the buyers' behalf, businesses with marketplace dynamics like metered pricing, and marketplaces with subscription services. It's an evolving area with serious growth potential, when you consider the large industries these companies could disrupt."

The survey examined opportunities and hurdles that marketplace insiders see as they grow their businesses, finding that more than half (51 percent) of marketplace founders see balancing supply and demand as their greatest issue. Another 30 percent of respondents pointed to establishing trust with their users as an issue. Just seven percent of participants pointed to regulatory hurdles as a barrier to success and even fewer said that access to financing was an issue. Sixty-three percent of marketplace founders and executives do not plan to accept bitcoin, according to the respondents.

The survey results are available at http://www.svb.com/Blogs/Steve_Allan/The_Outlook_for_Marketplaces/ in addition to an overview of the marketplace sector by Steve Allan, the Head of SVB's research and valuations unit SVB Analytics.

Editor's Note: The Marketplace Disruption Survey was conducted on October 14, 2014 at Silicon Valley Bank's Marketplace Mashup event. The 74 survey respondents, who were among the attendees at the Marketplace Mashup, included marketplace founders and executives.

About Silicon Valley Bank

Banking the world's most innovative companies and exclusive wineries, SVB offers diverse financial services, knowledge, global networks, and world class service to increase our clients' probability of success. With $35 billion in assets and more than 1,800 employees, we provide commercial, international and private banking through our locations around the world. Forbes Magazine ranks us among America's Best Banks and Fortune named SVB one of the best places to work. (Nasdaq: SIVB) www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is registered in England and Wales at 41 Lothbury, London EC2R 7HF, UK under No. FC029579. Silicon Valley Bank is authorized and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorized by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at 41 Lothbury, London EC2R 7HF, UK under No. 5572575 and is authorized and regulated by the Financial Conduct Authority, with reference number 446159.

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SOURCE Silicon Valley Bank