In 2014, US-based financial services firm Capital One set up a corporate venturing subsidiary to make early-stage investments in financial technology companies. Jaidev Shergill, then Capital One’s head of digital products, was chosen to lead the unit as a managing partner.
In a speech at the Global Corporate Venturing & Innovation Summit last year, he took an in-depth look at investment strategy and his unit’s evolution. Capital One Growth Ventures now has 12 team members, including nine investments professionals.
“We started in a very scrappy manner,” said Shergill. “At the two-year mark, we had a good investment process, and so we started looking at the strategic traction our investments could bring.”
Capital One Growth Ventures currently evaluates companies with three metrics – 40% is based on investor relationship value, 40% on vendor relationship impact; and 20% on learning and culture impact. These evaluations are repeated throughout the investment period, according to Shergill.
He added: “Using these metrics enables us to put the lens of strategic impact pre-investment and opens up the possibilities of seeing how portfolio companies evolve over time. It enables us to figure out the direction we want to go into from an investment perspective. It also helps us in our reporting to the investment committee, which in turn is more involved and able to see where we are in our journey, and can provide a more targeted help on specific issues.”
By the end of last year, the unit had made nearly 20 investments in total across multiple stages in a variety of sectors, including data, security, blockchain, and enterprise technology.
Capital One Growth Ventures provided a $6m extension to a $31m series C round for US-based marketing technology developer PebblePost in November, made a follow-on $450m series F investment in US-based data warehousing technology provider Snowflake Computing in October, and participated in a $95m series C investment in US-based data-as-a-service provider Enigma in September.
Other earlier deals Capital One Growth Ventures conducted in 2018 included a $21m series B round for US-based cybersecurity validation software developer Verodin and a $12m series A round for US-based data management software developer Okera.
Capital One previously invested in startups through North Hill Ventures, the venture capital firm with which it was affiliated until North Hill was spun off in 2012. It also operated Capital One Labs, a San Francisco-based research subsidiary operating as a startup laboratory.
Shergill also oversaw digital venture investing and startup business development for Capital One from 2012, and was previously president of Citi Ventures, the corporate venturing arm of financial services firm Citigroup, from 2007 to 2009, when he left to found and run Bundle, a big data consumer-facing digital startup.
Similar to his Capital One experience, Shergill worked at Citi for a number of years – from 2004 in this case – before creating its venture unit.
Previously, he worked in the US and UK across a swathe of top-tier financial services firms, including Credit Suisse, Lansdowne Capital and Deloitte, after gaining an MBA at Insead and an engineering degree at Northwestern University.
