There’s good news for fintech startups as Spanish banking giant Santander earmarks a fresh $100m to invest in innovative financial tech companies.
Innoventures, the bank’s London-based corporate VC arm, headed up by Mariano Belinky, says it has secured the extra funding from the Santander Group.
Launched in 2014, this will bring its total investment in financial tech companies to $200m.
Commenting on the funding, Belinky says the new fund will help Santander Innoventures to expand its portfolio to exciting geographies like Latin America, as well as deeper into Europe.
The fund will also be expanding the themes it invests in, which include blockchain and mobile payments, to themes like artificial intelligence, machine learning, cognitive computing, digital banking and more that help the bank offer its customers better services.
— SAN InnoVentures (@SanInnoventures) July 19, 2016
Speaking in an interview earlier this year, Belinky said Innoventures’ strategy is not looking for the latest fintech unicorn, because the recent emphasis on private tech company valuations was the wrong wrong metric and the fixation with billion-dollar plus valuations comes at the expense the real target: building a sustainable business.
“Creating unicorns is easy,” said Belinky. “I’ll write a term sheet for a billion dollar valuation and we have a unicorn. Is that sustainable? No. If anything it just puts more pressure on the company. Let’s aim for healthier valuations and healthier companies instead.”
“People ask me, who will be the next unicorn –the answer is: I don’t know and I don’t care. I’m not looking for unicorns. We should be pursuing sustainable growth, more companies, more collaboration and happy customers. If that is the case then unicorns will come.”
Innoventures investments at a glance:
> Socure – digital identity
> SigFig – wealth management
> Ripple – blockchain
> Digital Asset – blockchain
> Elliptic – blockchain
> Kabbage – companies financing
> Cyanogen – mobile ecosystems
> MyCheck – mobile payments
> iZettle – mobile payments
Meanwhile, speaking on a panel at Money20/20 Europe earlier this year, Belinky answered a question on whether Innoventures invests for financial return or strategy with “both”, but the emphasis is on strategic.
“We aim to find companies that can help us increase value proposition for clients and let us learn from those companies and add value. There’s a good symbiosis between a startup and a bank in the sense they have disruptive ideas and agility while we have brand, scale, and regulatory experience. We try to partner with comps that have strong strategic value for Santander but at same time we’re expecting to not lose money.”
Ana Botín, group executive chairman of Banco Santander, said in a statement that Santander remains committed to the UK and is “excited about its fintech enterprises”.
“The fund’s base in the UK has allowed it to benefit from London’s position as a fintech hub, while talent-spotting our investments on a global basis,” says Botin.
Stripe, the biggest fintech company in the US, is about to consolidate its position at the top by almost doubling its valuation to $9.2 billion following Series D funding.
Payoneer, the international money transfer company, has completed a strong funding round, raising $180m through equity financing.
Remitly, an independent US-based remittance company, has received $38m in new funding through equity and debt financing from IFC and Silicon Valley Bank.
Metromile has just landed nearly $200m in Series D funding for its auto insurance payments platform.