CommerzVentures, the new corporate venturing subsidiary of financial services provider Commerzbank, will aim to invest at the series A to series C stage as it targets startups in Europe and the US, according to managing director Patrick Meisberger.
The Germany-based fund was launched last month with a brief to invest in the most promising fin-tech companies at early stage before contributing follow-on funding as its portfolio companies grow.
“Initially, we are looking to invest in fin-tech companies in Europe and the US, typically in their series B and C rounds,” Meisberger said. “There are many areas which are relevant for Commerzbank and where collaboration with best-of-breed startup companies can make a lot of sense – consumer and small to medium-sized business banking services and big data analytics, but certainly also many obvious areas such as the whole value chain of payment processing.
“To give a specific example, we believe that the Bitcoin Blockchain as a [transfer database] technology, and not so much as a currency, holds tremendous potential as an enabling technology in the finance sector.”
Commerzbank is one of several banks to establish dedicated fin-tech investment units over the past year or two as the financial industry enters a period of disruption, and forming a corporate venturing subsidiary can be an important way for banks to become familiar with new technological developments before they become widely accepted.
“The fin-tech venture capital industry and the startup ecosystem have already begun to affect the business models of banks and will continue to do so,” Meisberger said. “Banks have taken notice and have started to engage with these companies by way of forming VC units, thus embracing the next big wave of innovation coming into their industry.”
Nor has fin-tech corporate venturing been confined to the US. Spain-based Santander launched a $100m fund in July, following the lead of Russia-based Sberbank and compatriot BBVA, and Meisberger predicted that the centre of fin-tech could eventually be in Europe.
CommerzVentures will follow on from Main Incubator, the seed-stage unit Commerzbank founded in March, and although the two have separate investment criteria, it is still possible that a startup from Main Incubator could subsequently receive funding from CommerzVentures.
“The vehicles have a different focus,” Mesiberger said. “CommerzVentures invests in series A, B and C rounds along–side other institutional investors. The Main Incubator invests in pre-series A rounds and would typically be the first investor in a business.
“Moreover, it is looking for investments that can have a direct impact on Commerzbank’s Mittelstand – small and medium-sized companies in Germany, Austria and Switzerland – business, while Commerz Ventures will invest across all segments. We actively share dealflow where applicable.”