A New Kid on the Corporate Venture Block
/At a time when plenty of venture capital dollars have been put on pause, this week we saw the announcement of a new corporate venture investment division from FIS.
FIS Ventures plans to invest $150 million in fintech start-ups over the next three years. Its focus will be on emerging technologies, such as:
artificial intelligence and machine learning
digital enablement and automation
data and analytics
security and privacy
distributed ledger technology
financial inclusion
FIS's last publicly announced investment was $25 million in a stock trading app, Billion, in March. FIS also invested in a $35 million Series B to Flutterwave, a payments infrastructure provider operating in Africa.
Reading between the lines, FIS's announcement looks like a bit of a defensive move, as it comes on the heels of the announcement of Canapi Ventures. Nonetheless, it’s welcome news.
Canapi Ventures is focused on B2B and enterprise fintech. It was co-founded by the chairman and CEO of Live Oak Bancshares and the group founder and CEO of Promontory Financial. In January, Canapi announced closing its inaugural $545 million fund from a network of 35 institutional investors collectively called the Canapi Alliance.
The FIS announcement is especially timely in light of some breakdowns in banks’ tech stack exploited by the coronavirus — one of biggest being the breakdown in processing applications for the Small Business Administration's (SBA) Paycheck Protection Program (PPP). If there’s blame for that, it doesn't rest solely at the feet of banks, though. Imagine trying to process an unprecedented volume of loans with unclear guidance from the SBA and a government website that keeps crashing.
Historically, though, enterprise fintech funding has lagged behind consumer fintech investing. Just take a look at the bloated fintech unicorn club, which is the opportunity FIS and Canapi, among others, are doubling down on.
