MILANO VALUE PROPOSITION

FINTECH 2019

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TABLE of Contents

YesMilano for Fintech1. Why Milan2. Mapping the Landscape3. Milan’s Verticals4. Talent Base & Innovation5. Milano is the gateway6. Quality of Life7. Competitive Incentives8. Get in Touch

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YESMILANO for FINTECH

ONE OF THE RICHEST EUROPEAN REGIONS

€49.198GDP

per capita

GATEWAY

3000WEEKLY FLIGHTS

THRIVING INNOVATION ECOSYSTEM

> 1900INNOVATIVE STARTUPS

HIGH QUALITY OF LIFE

EXCELLENT INFRASTRUCTURES

FINANCIAL CAPITAL

TOP LEVEL UNIVERSITIES & TALENTS

200.000STUDENTS

INTERNATIONAL SPIRIT

> 4500MNE

WELCOMING AND PROACTIVE GOVERNMENT

COMPETITIVE INCENTIVES

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1. WHY MILAN International MomentumSince 2015, Milan has experienced athriving moment in terms of growthand internationalization. As of 2018,Milan hosts 4579 Multinationalcompanies, providing jobs to over430 K people, and it’s surrounded byone of the strongest economicregions in Europe, Lombardy.Milan’s reputation is wellestablished among top global citiesand is recognized as a competitivetop economic, creative and culturalhub in the global network.

Financial CapitalThe companies that choose Milanbenefit from accessing a financialecosystem which agglomerates thevast majority of Italian financialservices and corporations.With more than 10.000 companiesfocused on financial and insuranceservices, Milan is one of the largestfinancial markets inthe world. Ithosts the Italian Stock Exchange(Borsa Italiana), which is part of theLondon Stock Exchange Group, with421 companies are listed and aMarket Cap that exceeded € 688billion (37,8% of the Italian GDP), in2018. There are over 46.730 peopleemployed in financial and insuranceservices (7,7% of the total workingforce).

GDP€ 398 B

POP.10 M

REGIONAL ECONOMICS & DEMOGRAPHICS

GVA per capita

€ 34064

ENTERPRISES 816 K

R&DTotal expenditure

€ 4.7 B

EXPORT€ 120 B

ITALY ranks 8° in the Global FDI Confidence Index (ATKearney, 2019)

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2. MAPPING THE LANDSCAPEFINTECH FIRMS ECOSYSTEM

GROWTH IN NUMBER OF FINTECH YOY

+27%(PWC, 2019)

Milan’s has developed a mature Fintech ecosystem, within an already established, strong network of financial institutions which make Milan one of the global financial capitals.

Fintech is redesigning the world we live in with magnetic and disruptive power. In the last three years, a growing number of fintech startups have chosenMilan as their home, either for headquarters, or for country hubs.

There are two words which best describe the Fintech world in Milan: Growth & Opportunities. Growth as the Fintech firms already operating in Italy are growing at a fast pace, both in terms of numbers and revenues. Opportunities because the Italian ecosystem’s financial and economic potential is still far from being fully exploited, leaving several untapped opportunities for new Fintech players on the market, both for the B2C and the B2B markets.

GROWTH IN REVENUES FOR FINTECH FIRMS YOY

+30%(PWC, 2019)

40% OF ALL FINTECH FIRMS IS LOCATED IN MILAN (PWC, 2019)

56%21%

14%

9%

Top performing technologies on the market

AI & Big Data

Web Platforms

Mobile & UX

Other (OpenBanking & Open API, IoT, Blockchain & Crypto)

+54% GROWTH YOY OF ITALIANS USING FINTECH SERVICES (PWC, 2019)

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120 FINTECH FIRMS OPERATING IN MILAN (PWC, 2019)

The hunger for innovation of the financial sector, has turned Milan intoa vibrant and international ecosystemwith a rich value chain and a diversified supply of products and solutions. From Roboadvisory and Artificial intelligence to Cibersecurityand Invoice Financing, Milan hasproven to be an innovative proactiveenvironment to the needs of bothbusinesses and consumers, thanks to the intersection of top levelUniversities, large financialinstitutions, and the signature Milanese entrepreneurial spirit.

In the last 3 years, the Fintech sub sectors which have grownthe most in terms of number of StartUps are Insurtech, RegTech, Capital Market & Trading, Payment, Money Management and Lending.

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Money management Lending

Wealth & Asset Management

Capital & Trading

RegTechInsurTech

Tech Enabler

Cyber Security

Payment

Piattaforme Web

AI/Big Data

Mobile & UX

Blockchain & Crypto

Open Banking / API

IOT

Altro

FINTECH DISTRICTThe Fintech Districtwas created in 2017, and is now the established referencepoint for all the fintech ecosystem in Milan and in Italy aswell. It currently hostshttps://www.fintechdistrict.com/

IN THE NEXT 4 YEARS, THE DIGITAL DISRUPTION IS EXPECTED TO CREATE FROM 58500 TO 73300 NEW JOBS IN THE FINANCIAL AND INSURANCE SECTORS, IN ITALY(Excelsior, 2019)

LE VILLAGE, CREDIT AGRICOLEIn 2018, Credit Agricole (11° largestbank in the world in 2019) opened in Milan its Innovation Hub for start-ups, Le Village. Le Village Milan is the first one opened by CA outside of France.https://levillagebyca.it/it/

A growing interest of the institutions at the national level is promising an even stronger growth for the future development of the sector. The two main regulators Banca d’Italia and Consob have opened a direct channel to discuss with fintech firms and their category associations about their needs and proposals. In the last two years Italia Fintech and AssoFintech were created, which have been advocating and lobbying for new regulations to foster the growth and the attractiveness of the sector.The large financial institutions have started to respond to the industry’s disruption and they are ready to invest in innovation, technologies, talents, and ideas.

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ELITEELITE is a global community that spans 33 countries with the clearvision to provide companies access to capital, skills and network needed to scale up and make a lasting economic impact. Elite is part of the London Stock Exchange group and its headquarter is based in Milan.https://www.elite-network.com/it

ILLIMITYIllimity is a startup “neobank” which, has been launched following the creation of a SPAC – Special Purpose Acquisition Company named SPAXS that raised about 600 M € with 64% of foreign investors. In September 2018, the Spac acquires Banca Interprovinciale, and from their merger comes Illimity. In March 2019 Illimity gets listed on Borsa Italiana (Italian Stock Exchange) and employs today over 200 people.https://illimity.com/it

FABRICK

Fabrick is a new financial ecosystem that enables a fruitful exchange between financial operators that discover, collaborate and create innovative solutions for end customers, through an API platform. Fabrick presents the new way of doing banking: open, modular and data driven. For Banks and Financial Institution, Fabrick represent a vast ecosystem of quality services to access in order to grow their business. Launched in 2018, the company already involves more than 200 people and leads Fintech brands such as Axerve, Hype, Vipera, Fintech District.

https://www.fabrick.com/

3. MILAN’S VERTICALSFINTECH MARKET SUBSECTORS. OPPORTUNITIES FOR NEW BUSINESSES AND INVESTORS

SMART PAYMENT & NEW BANKSMilan is Italy’s living lab for smart solution and its residents are consolidated early adopters. The Fintech firms have found the perfect playground to grow, by offering renovated digital customer experiences, easier operations, safe & fast solutions and higher efficiency to meet the consumer demands and needs of ease, speed, omnichannel and affordability, both for Consumers and Businesses. Instant Payments are growing fast in Europe and are expected to boom in Italy after the introduction of TIPS (target Instant Payment Settlement) by Banca d’Italia, which guarantees an almost immediate settlement by employing directly central bank’s currency, instead of cash.The usage of mobile proximity payment solutions grew of about 600% in 2017, but the experts expect it to reach € 15 B in the next 5 years.The revenues of this Fintech segment grew of about +38% in 2017. Satispay, which was added in 2018 in the list of the fastest growing Fintech startups by CB insight, has led the market in Milan so far.

Tips & Insights: the market is becoming mature enough for moving forward and experts say that payment solutions on instant messaging app is the next big thing

NEXI

has grown to become a colossus of innovation in the payment sectore and has already engaged in acquisition and partnerships with startups. In 2018, Nexihas acquired Sparkling 18 which is one of the 7 Mastercard global Platinum Digital Vendor.

GROWTH IN USAGE OF MOBILE PROXIMITY PAYMENT IN 2017

+600%(PWC, 2019)

REVENUES GROWTH OF PAYMENT FINTECH FIRMS

+38%(PWC, 2019)

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SATISPAYSatispay is the fastest growing Italian fintech company in payments. Launched in 2013, it is the third most funded Fintech company in Italy and employes over 80 people with offices in Milan and Luxemburg. With over 400K active users, Satispay is now focusing on its international expansion, and it has been included by CB Insights as one of the 250 Fintech to watch in 2019. https://www.satispay.com/it/

MILAN’S VERTICALSFINTECH MARKET SUBSECTORS. OPPORTUNITIES FOR NEW BUSINESSES AND INVESTORS

ALTERNATIVE LENDINGHungry for ancillary activitiesThe Fintech Ecosystem is growing fast in Milan and Fintech companies demand for ancillary and technological solutions is increasing. If you are looking for new B2B customers for innovative solutions, in Milan you will find a fertile ground to expand your business.

THE WORLD OF SMEs in ITALYThe SMEs represent a potential market of thousands of B2B clients. October’s choice of opening its Italian offices is a clear indicator of the opportunities. Nevertheless, the opportunities are there also for companies focused on other services as the invoice financing, a segment which has anticipated invoices for € 0.5 , just in 2018.

The startups operating in Milan can be divided intoEnablers - for Credit scoring or enabling infrastructuresand circuits-, traditionalbanks Competitors, -focused on Business Lending, Consumer Lending and Invoice Financing -, and Intermediaries – which are mostly Marketplaces & Comparing tools. Eventhough the growth in thissector remains strong it isdefintely a mature one, where 75% of the revenues are generated by established firms, older than5 years.

REVENUES GROWTH OF LENDING FINTECH FIRMS

+29%(PWC, 2019)

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OCTOBEROctober is a leading SME-Lending platform launched in 2014 in France with the brand Lendix. With over 300 M€ of loans given to European SMEs, October has established its Italian offices in 2017 and is now employing more than XXX people. It has chosen Milan as the gateway to the Italian market thanks to the city’s proximity to the other European hubs and to the Italian customers.

https://it.october.eu/

MILAN’S VERTICALSFINTECH MARKET SUBSECTORS. OPPORTUNITIES FOR NEW BUSINESSES AND INVESTORS

INSURTECH

REVENUES GROWTH OF THE INSURTECH SECTOR

+71%(PWC, 2019)

Expected to exceed the € 1 B market revenue by 2023 (Research and Markets, 2018), the Insurtech sector has seenan exponential growth in the world. In Italy, the revenues of this sector have almost doubledevery year +97% in 2016 and +71% in 2017.In terms of opportunities in technologies employed, AI and IoT are quickly becoming the must have in this sector, whilemost of the firms employ web platforms as their maintechnology. There are still a lotof untapped niches and processes where incoming new players can innovate - accidentmanagement, CX digitalization, health policies, housing insurance, just to name a few.

PRIMA, THE BIGGEST ROUND OF VC GROWTH IN ITALYPrima Insurances is an Insurtech firm, founded in 2015, specialized In the distribution Insurance policies in the automotive sector. In 2018, it became the first company to hit the € 100 M wall, in a single VC round, in Italy.

35-45%OF INTERNET INSURANCE CUSTOMERS WOULD BE WILLING TO SHARE MORE PERSONAL DATA FOR HAVING TAILORED POLICIES(Nielsen, 2019)

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4. TALENT BASE & INNOVATIONIN CONTINENTAL EUROPE, BOCCONI UNIVERSITY RANKS 2° FOR ACCOUNTING & FINANCE, 2° FOR BUSINESS & MANAGEMENT AND 1° FOR ECONOMICS & ECONOMETRICS (QS World University Ranking, 2019)

Thanks to its top level educationinstitutes Milan guarantees tostudents a diversified and challengingoffer in terms of university levelcourses. Students here come becausethey know they will find severalopportunities for their career havingMilan one of the lowestunemployment rate in Europe.There are 11 universities andacademies in the city of Milan, with200.000 students - 15% of the totalresidents- 10% of which are comingfrom abroad. There are 40 differentfaculties in Engineering, Informaticsand Economic studies, with a total of10833 Informatic Engineering studentsand 29211 Economics, managementand finance students. Milan is leadingthe digital and innovation disruption inItaly and Milaneses are early adoptersand innovation enthusiasts both interms of tech products and services.These characteristics make Milan theperfect testing ground for newtechnologies and innovative solutions.Italy overall - and Milan as a Universitycity - rank very high in terms ofresearch productivity. Italy is the 1stcountry in Europe in terms of numberof Citiations per researcher (EuropeanHouse-Ambrosetti, 2017).Milan alone registers 20% of the totalpatents registered in Italy.

IN CONTINENTAL EUROPE THE POLITECNICO DI MILANO RANKS 3° FOR ENGINEERING & TECHNOLOGY (QS World University Ranking, 2019)

Milano has also grown into a Start-Uppowerhouse. According to theFinancial Times, Milan is the 3rd city inEurope for fastest growing startups.The number of incubators andaccelerators in Milan is now 24.Investors, Hubs, and Talent haveturned Milan into the perfectecosystem for startups to grow andexperiment. Recently Venture Capital istaking off in Italy and especially inMilan. VC Investments in Lombardyhave witnessed a 280% growth from2017 to 2018. In the City of Milan, VCInvestments in 2018 have been almost13 times the ones in 2017. The City ofMilano alone gathers 61,6% of thetotal of VC Investments in Italy.

3° CITY in Europe for FASTEST GROWING STARTUPS (FT, 2019)

6,00% 7,00%10,63%

13,40%

8,30%

3,50%

12,30%

0,00%2,00%4,00%6,00%8,00%

10,00%12,00%14,00%16,00%

Milan (L

ombardy)

Berlin

Barcelona(Catal…

Madrid

Paris (il

e de …

Frankfurt …

Wien

Unemployment rate (NUTS 2) source: Eurostat

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MAP OF FINTECH COMPANIES IN MILAN – to be edited

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PAYMENT MONEY

MANAGEMENT

WEALTH & ASSET

MANAGEMENTCAPITAL & TRADING LENDING INSURTECH CYBERSECURITY REGTECH TECHENABLER

Wallet-E s.r.l. Gimme 5 Investi.re 2meet2biz SOISY NAMU Banksealer SEECOD AgileLabNexi Soldo Back to Work 24 CardoAl p2p advisor Salary Fits General Expert Neutrino Cloud Finance NeoData Group Drop Pay (A-Tono) WalletSaver SiamoSoci Epic SIM Leanus RiskApp LiveTech Epiphany PersonaliveScloby s.r.l. Beesy SHAPPS Wolfway LoanXChain Neosurance Mobysign The AvantGarde Group Noovle Domec S.p.a. My Foglio Mamacrowd Why invest in Workinvoice s.r.l. YOLO Insurance XTN EasyTax Business4People Loyalty 24 Ekuota CrowdFundMe inch Capital FinDynamic s.rl. Prima.it Cleafy Fiscozen BuzzholeEpipoli Group Vipera Ecomill MDOTM October AIR DF LABS Digithera CubeYouGrowishPay Garanteasy S.r.l. Concrete The Rock Trading Borsadelcredito.it Easy Claims InTheCyber HitBytesSatispay Utego Fundera The social lender Claider A.I. Tech IndigoPlick (PayDo) 200 Crowd MutuiSupermarket DottorDog Conversate Tinaba S.p.a Deus Technology Mutui Online Covenholder USERBOT Chainblock Moneyfarm Smartika Victor Eudata Conio Virtual B Credimi S.p.a DigitalTech International Merkur.io EuclideaSplitty Pay Fondi OnlineMoneymour Online SIM Sparkling18 (Nexi) Finscience

WavaentureCASAVO

5. MILANO IS THE GATEWAYTO EUROPE, NORTH-AFRICA, MIDDLE EAST & ITALY

Located at the heart of Europe, Milan offers a priviliged location to access the European and ItalianMarkets, and is also the perfect hub for the widermediterranen basin, putting in connection the middle-east, north Africa and the Balkans.Milan has three major airports: Malpensa-MXP for intercontinental destinations (>20 million passengers), Linate-LIN with convenient connections to Europeanand Italian cities (>10 million passengers), and Orio al Serio-BGY which is an operating base for all major European low-cost airlines (>11 million passengers). The three airports are connected by bus to the city centre and Malpensa also has a direct rail connection to major railway stations in Milan, with a total of 158 journeys a day. The new metro line M4, to be completed by 2021, connects Linate airport directly to the city centre in less than 15 minutes.The Italian market is one of the largest consumer markets in the world and in terms of innovative and digital financial products it is full of opportunities for new players, considering it is still a rather uncrowdedmarket for a developed country.There are several examples of companies that havechosen Milan as their hub to expand heir offer in the Italian market – Stripe and October just to name a few.

3 INTERNATIONAL AIRPORTS

app. 2 HOURS TO GET ANYWHERE IN EUROPE

THIS TYPE OF MAP BUT WITH DIFFERENT INFORMATION

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app. 1300 WEEKLY FLIGHTS TO EU 27 CAPITALS

DIRECT FLIGHTS TO SAN FRANCISCO, LONDON, NEW YORK, SHANGHAI, HONG KONG, TOKYO, INSTANBUL, TEL AVIV, ABU DABHI, CYPRUS

6. QUALITY OF LIFEA functioning city surrounded by Italian Beauty

ITALY IS THE 2°HEALTHIEST COUNTRY IN THE WORLD(Bloomberg, 2019)

Europe is a wonderful melting pot ofMediterranean quality of life andNordic Efficiency and in Milan you getthe best of both worlds. Milan is a fullyfunctioning city which let’s you enjoythe great quality of life of Italian’sDolce Vita.

A thriving cultural and creativeecosystem enlivens the city, which isfull of heritage and culturalinstitutions, concentrated in arelatively small metropolis. More andmore young people are choosingMilano as their home and thepopulation expected to grow of +6% by2030.Located in between mountains, lakesand sea Milan offers dozens ofdifferent solutions for weekendgetaways solutions which can bereached from 1 to 2.5 hours by train orby car. In 1 hour you’ll be able to joinbreathtaking views of the lakes. In 2hours you’ll be at a beach in Liguria orin one of the top class ski resorts onthe Alps.

Milan Offers an unrivalled livingexperience in terms of size and accessto amenities. Enjoying the Italianlifestyle comes without the commutingeffort that other major financialcentres often require. Food andHealthcare system are the 2 pillars thatsupport the healthy lifestyle ofmilaneses. Regarding the latter,Lombardy’s public healthcare system isone of the best in the world.Concerning food, don’t let Italians starttalking about food… 18 Michelinstarred restaurants, local markets,zero-mileage food, ethnic restaurants.Milan has them all.

Milan is an open and international city,where everybody is welcome. Milan’spopulation is 19% foreign-born

10.000 THEATRICAL, DANCE & MUSIC PERFORMANCES PER YEAR

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FINLEAPFinLeap is a German company bulder in Fintech founded in 2014 and entered the Italian market in 2017. In four years, it has launched 16 fintech companies and made various acquisitions in the industry, focusing on creating competitive advantage from collaboration and coopetition. Milan has been chosen as second hub for the high quality of life, small cost of developers and ability to retain foreign workers..https://www.finleap.com/

7. COMPETITIVE INCENTIVES & FISCAL BENEFITS

CORPORATE INCOME TAXIn 2019, the tax rate was reduced to 22.5%for companies reinvesting profits for purchasing instrumental goods and new hires. Further reductions are scheduled until 2022 (20.5%)

INDIVIDUAL INCOME TAX FOR NEW RESIDENTS• 90% tax exemption on the

income for 6 years* for Professors and Researchers

• 70% tax exemption on the income for 5 years** for Employees and Professionals

• € 100.000 Substitute tax for 15 years for high

* the exemption can be extended up to 13 years based on the number of children and the acquisition of a

property

** the exemption can be extended up to 10 years based on the number of children and the acquisition of a

property

SUPER DEPRECIATIONIt is an over-valuation of investments in newly purchased tangible assets equal to 30 % for investments up to € 2.5 MLN

R&D TAX CREDITIt provides a 25% or 50% tax credit on R&D incremental expenses ( at least equal to €30K or more) calculated ona fixed basi given by the average of R&D expense incurred in the previous 3 years period

INDUSTRY 4.0 TRAININGThe aid aims at stimulating companies investments regarding training paths about Industry 4.0 “enabling technologies” (automation, cloud, etc.).

It consists in a 40% tax credit of the expenses related to the personnel employed in eligible training activities

PATENT BOXIt consists in a 50% tax deduction for incomes arising from direct use or licensing of qualified intangible assets. It regards reduction of corporate tax and Regional production tax

EMPLOYMENT 50% bonus for companies hiring people under 35 recruited in 2019-2020, if they have never been occupied with a permanent contract. It regards social security contributions up to € 3,000 per year and for a total duration of 36 months.A bonus up to € 8,000 for the year 2019 on social security contribution for companies hiring with a permanent contract young people with excellent university careers, under 30 graduates with honors and young researchers under 34

HYPER DEPRECIATIONThe over-valuation applied is defined as follows:

• +170% for investments up to €2.5 mln

• +100% for investments between €2.5 and € 10 mln

• +50% for ivnestments between €10 and €20 mln

INCENTIVES FOR STARTUPS & STARTUPS VISA

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GET IN TOUCH

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