Commerzbank's newly formed fintech fund will invest from series A to C stage in Europe and the US, and could partner with the bank's existing incubator.
CommerzVentures, the newly formed corporate venturing subsidiary of financial services provider Commerzbank, will aim to invest at the series A to series C stage as it targets start-ups in Europe and the US, managing director Patrick Meisberger told Global Corporate Venturing.
The Germany-based fund was launched at the start of this month with a brief to invest in the most promising fintech companies at early stage before contributing follow-on funding as its portfolio companies grow.
“Initially, we are looking to invest in fintech 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 start-up companies can make a lot of sense: consumer and [small and mid-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 fintech 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 the banks to become familiar with new technological developments before they become widely accepted.
“The Fintech venture capital industry and the start-up ecosystem have already begun to affect the business models of banks and will continue to do so,” Meisberger explained. “Banks have taken notice 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 that fintech 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 fintech could eventually be situated in Europe.
“Europe is definitely on similar level than US when it comes to the degree of innovation and business dynamics,” Meisberger said. “In terms of VC funding of course Europe is still lagging, but with several VCs being formed to address the fintech space, Europe will catch up over time as well.
“London is on track to eventually become the most important place for Fintech entrepreneurship, and investing, worldwide.”
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 start-up incubated in 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 alongside 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 Swutzerland) business, while CommerzVentures will invests across all segments. We actively share dealflow where applicable.”
– Photo of Patrick Meisberger courtesy of LinkedIn
