In 2014, US-based financial services firm Capital One set up a corporate venture capital (CVC) subsidiary, Capital One Growth Ventures (now Capital One Ventures), 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.
Regarding the current fintech innovation landscape, Shergill said: “We are going through one of the most interesting times in the transformation of financial services. People are expecting differentiated experiences and financial services companies are, in turn, upgrading their whole technology stack to meet those demands.”
The unit has backed companies operating in areas including data, security, blockchain and enterprise technology. Its recent deals include accessibility compliance automation technology developer Evinced, cash management technology developer Trovata, food waste management platform Goodr, technology skills assessment platform CodeSignal, customer documentation software developer Lightico and email creation software developer Stensul.
From his investments at the unit, data analysis software provider Snowflake went public in a $3.36bn initial public offering in September 2020 while retirement plan provider United Income, mobile payment platform Paydiant and cybersecurity technology provider Cylance were respectively acquired by Capital One, BlackBerry and PayPal.
“We started in a very scrappy manner,” said Shergill in a speech at the Global Corporate Venturing & Innovation Summit in 2018. “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 Ventures decided to evaluate 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.”
Capital One Ventures now has 15 team members, including 12 investments professionals. Shergill 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 CVC unit in 2007.
Previously, he worked in the US and the UK across several financial services firms including Credit Suisse, Lansdowne Capital and Deloitte, after getting an MBA at Insead and an engineering degree at Northwestern University.
