“We do not see a need for additional large-scale VC funds in the market but believe the revisions will embolden large banks to raise new vehicles,” PitchBook analysts James Gelfer, Dylan Cox, and Hilary Wiek wrote in the note.
Goldman Sachs has already announced plans to raise a $2bn venture and growth fund, while Citigroup launched an impact venture capital fund earlier this year and Jennifer Friel Goldstein this month was promoted to managing partner for life science and healthcare at SVB Capital to raise its first institutional fund in the sector. (Her SVB colleague, Alex McCracken, will moderate a fintech roundtable at the GCV Digital Forum on 29 September, including insights from Sam Myhrman at SEB, Jacqueline LeSage Krause at Munich Re Ventures, Stefan Tirtey at CommerzVentures and Alokik Advani from Fidelity International Strategic Ventures.)
There is a lot of capital they can draw on as clients look to them. US banks saw their net income plunge by 70% year-on-year in the second quarter even though customers flooded the banks with more than $1 trillion in deposits, according to data provider CB Insights, which looks at where the top US banks, including Goldman, Citi, and JPM, are investing in fintech here.
While banks see a chance to claw back some income from added-value services, the joining up of the financial services ecosystem through integration of VC with private equity and public and private capital more broadly will make markets more efficient in allocating resources to where they can best be used (ceteris paribus). This will require the other service providers to join in.
Lead by Jonathan Cardenas, the Financial Services Technology Joint Subcommittee of the American Bar Association Business Law Section’s Private Equity & Venture Capital Committee and Commercial Finance Committee will host a virtual panel on “Cross Border Corporate Venture Capital Investment in Fintech” on Tuesday, September 22nd. To attend, please register for the ABA Business Law Section 2020 Virtual Annual Meeting on the link.
The following day will see the GCV Connect powered by Proseeder pitch challenge for financial and deep tech (the sustainability and mobility sessions will be on the 22nd after and separate to the ABA event).
