6 venture capital funds linking banks and credit unions to fintechs


A wave of venture capital funds with financial institutions as sponsors has emerged, and return on investment is not their only motive.

The funds – managed by companies such as Canapi, Curql Collective and JAM Fintop – try to find promising technologies and potential fintech partners for regional and community banks as well as credit unions that lack the resources to find and control these partners on their own. . Fund managers will also consult their bank investors on the usefulness of a product before committing to it.

“In particular over the past 12 months, [financial institutions] have used fintechs more as a partner than a competitor, ”said Vincent Hui, CEO of Cornerstone Advisors. “But the challenge is to know who is the best partner, how to manage this partnership, how to gain visibility on potential partners? “

Most small institutions don’t have dedicated staff to manage fintech partnerships, so participating in this type of fund is a way to learn about fintech without wasting time with the wrong partner, Hui said.

“If they get a comeback, that’s the icing on the cake,” he said.

It’s an active time for fintech investing. CB Insights’ Q3 State of Fintech report found global fintech funding to stand at $ 94.7 billion as of September 30, nearly double the year-end total of 48.4 billion. billion dollars in 2020.

Here is a look at six funds that have debuted in recent years. Some of them are still in the process of raising funds or supplementing their ranks of sponsors; others have launched new funds focused on niches such as minority-owned startups or blockchain.

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