Venture investing is often described as more of an art than a science, and the ability to track down interesting deals using intuition and sleuthing skills is a valued one among the colleagues of Brandon Gath, a director at CME Ventures, the corporate venturing unit of the derivatives exchange operator.
Rumi Morales, executive director and head of CME Ventures following the departure of Mark Fields to one of its portfolio companies, Wickr, said: “Brandon has been an essential member of CME Ventures since its inception, and has directly contributed to building it into one of the financial industry’s most innovative corporate venture arms.
“He has sourced the majority of our investments, often pursuing a company with no more than a hunch and its LinkedIn page, and emerging with an impenetrable investment case and lasting business relationship.
“Brandon also contributes significantly post-investment, as a valued observer on three of our portfolio companies’ boards.
“He has single-handedly developed CME Ventures’ profile in the Bay Area, situating himself there on his own initiative to be at the heart of dealflow, forging important connections in the VC community and representing CME’s strategic value as an investor.
“CME Ventures could not have reached its success without Brandon and there is no question that he is the one to drive it to future greater heights.”
CME Ventures had made 22 investments in 14 portfolio companies, Gath added, with 11 public:
• Dwolla, a real-time payment network, series D round with Andreessen Horowitz.
• 1QBit, a quantum computer software company, series A and B round with Royal Bank of Scotland.
• Powerlytics, an economic data software company, series A convertible note.
• Ripple, a payment protocols company, series A and B round with IDG and Santander Ventures.
• Nervana Systems, a deep-learning cloud company, series A with Data Collective and DFJ Capital.
• Fortscale, a security and user behaviour analytics company, series A with Intel Capital and Blumberg Capital.
• Wickr, a secure communications platform run by Mark Fields as CEO, series A and B with Breyer Capital and Alsop Louie Partners.
• SparkCognition, a developer of cognitive analytics for the internet of things, series A with Verizon Ventures.
• Digital Currency Group, a blockchain fund, series A with Bain Capital Ventures and RRE.
• Digital Asset Holdings, a blockchain applications company founded by former JPMorgan Chase banker Blythe Masters, series A with JPMorgan and Goldman Sachs.
• Orbital Insight, a satellite image analysis company, series B with Google Ventures and Sequoia Capital.
Gath, a former consultant at Accenture after graduating in economics and entrepreneurial finance from University of Chicago Booth School of Business, said CME Ventures was investing in frontier technologies, such as data science, financial technologies and cybersecurity. This edge investing was an important reason behind his move from corporate development and finance to helping found the corporate venturing unit, he added.
Gath said: “The ability to have a direct influence on emerging industries and company’s through investment and ongoing support was what attracted me.
“It has been very rewarding supporting companies that are leaders in new fields like deep learning, geospatial, and quantum computing. These companies are addressing challenges and opportunities in finance, medicine, and transportation that will have a long term positive impact on society.
“My greatest success was leading our investment in Nervana Systems. We were an early investor in one of the first deep learning cloud companies, which was acquired by Intel in 2016 [reportedly for more than $350m].
“Being a three-person VC team [with Morales and Justin Strausbaugh], it is always a challenge to allocate time between supporting your existing companies and investing in new companies.
“CVCs should strive to put in place structures and incentives that ensure they are positioned to be in the market for the long term. I think you are seeing more corporate VCs set up structures that replicate their financial VC peers, which is really positive for the industry.”