Q&A with Arvind Purushotham, global head of venture investing, Citi Ventures
Vanessa Colella, financial services firm Citi’s chief innovation officer and head of its Citi Ventures subsidiary, said in her nomination of Arvind Purushotham, global head of venture investing at the unit: “Partnership is one of the most important ingredients for a successful corporate venture capital (CVC) team and Arvind Purushotham embodies all the qualities that make a successful partner.
“Arvind believes that emerging technologies and forward-thinking startups can drive innovation and push companies like Citi forward, but he also understands and appreciates the business challenges and constraints our colleagues face. He tactfully builds connections and has proven himself to be a tireless advocate for our portfolio companies while also serving as a trusted advisor to our Citi colleagues.
“Under Arvind’s leadership and dedication to partnership, Citi Ventures has helped over 50% of our portfolio companies sign commercialisation deals with Citi and the team has continued to embed itself deeper and deeper into Citi’s core businesses. I am immensely proud of Arvind’s work and look forward to seeing what the team continues to deliver over the coming year.”
1. Any highlights from the past year?
2019 was a remarkable year of growth for the Citi Ventures team. The team made 23 investments across six different sectors, making it one of the most active CVC teams in the world.
Two of our portfolio companies – Honey and Plaid – announced multi-billion dollar acquisitions by PayPal and Visa, respectively. In addition, we closed commercial contracts for eight of our new portfolio companies within Citi, bringing the total commercialisation of our portfolio to over 50%.
The Citi Ventures team has also continued to grow. We hired two new investors to join our ranks and promoted several of our team members. Two of our investors were promoted to director – Victoria Cheng, who has been leading the launch of our new Impact Fund, and [GCV Rising Star 2019] Travis Skelly, who has been leading our expansion into the property technology space. We also promoted two of our investors to senior vice-presidents – [GCV Rising Star 2020] Jimmy Zhu and Suman Natarajan.
2. What are the plans for the year ahead?
For 2020, we are excited to announce the launch of Citi’s new Impact Fund, which the venture investing team will be leading. The $150m fund will make equity investments in “double bottom line” private sector companies that have a positive impact on society. This is the largest fund of its kind to be launched by a bank using its own capital. Investments of up to $10m will primarily be made in post-product companies that have demonstrated proof of concept, built an existing customer base, secured prior rounds of funding and exhibited the potential for scale in multiple markets. There will also be an emphasis on funding businesses that are founded or led by women and minorities.
We have also launched a new focus area on proptech. While we have been working with several startups over the last few years that are relevant to the property management and real estate markets, we see this as a growing area that deserves its own focus. So far, we have made investments in four proptech companies – HomeLight, Reonomy, Roofstock and Unison – and we are looking forward to more in 2020.
Lastly, we are continuing to build out our Technology Council network to support our portfolio companies. In 2019, we hosted the first Technology Summit and look forward to delivering even more insights into our portfolio companies in the year ahead.
3. Could you mention some milestones achieved at your unit so far?
2020 is already off to a strong start already – we have closed two new investments and two follow-on investments. We closed an investment in Contour, a digital distributed ledger network focused on improving the Letter of Credit Process. We also closed an investment in Roofstock as part of our new proptech vertical, which is an online platform offering retail and institutional investors the opportunity to buy whole or fractionalised interests in single-family rental homes. We closed a follow-on investment in HighRadius, which an artificial intelligence-powered fintech software company that was heralded as one of the first new unicorns in 2020. We also closed a follow-on investment in Netskope, a leader in the cloud security space helping enterprises secure and accelerate their digital transformation and cloud adoption.
With the launch of our new Impact Fund, we are actively meeting with startups who meet our social impact criteria. As of April 6, we are very close to finalising our first investment from the fund.
The team has also already participated in nearly 20 different external conferences and events, including speaking at GCV’s Innovation Summit in January.
4. Please mention some pain points and opportunities you’ve encountered in corporate venturing.
It’s no secret that it can be frustrating to move quickly within a large organisation. As a result, the speed at which we operate is often at odds with the speed our portfolio companies do business. On a similar note, the mindset and culture within a large financial institution are typically very different from how a technology startup thinks and operates. These differences present many opportunities for CVCs to drive impactful partnerships between startups and the corporate business by aligning incentives. At Citi Ventures, we encourage our team to spend just as much time doing due diligence on potential investments as meeting with colleagues within Citi’s various business units. By opening a dialogue with our Citi colleagues to understand their needs, responsibilities, and goals, we can more adeptly connect them with our portfolio companies as possible solutions. This partnership is how we achieve a win-win for everyone.
5. What do you think all CVCs could do better to make it a stronger industry?
Business development and innovation for corporations are changing. Today, corporates can’t afford to build everything in house – it’s too expensive and cumbersome. As a result, CVCs have a unique opportunity to spur innovation by bringing the outside in, forging partnerships, and leveraging emerging companies as a way to provide better value, services, and products. My advice to fellow CVCs is to find more ways to embed themselves within their organisation and become ambassadors for innovation through external partnerships.
6. For colour, what did you do prior to CVC?
Prior to Citi, I spent nearly a decade as a managing director at Menlo Ventures, where I was an investor and board member at companies including Kazeon Systems, Cavium Networks, Solidcore, nCircle Network Security, Intelligent Results and Vhayu Technologies. Previously, I was a design engineer and a programme manager at Intel Corporation.
I obtained my BSEE from the Indian Institute of Technology, Madras, an MSEE from Case Western Reserve University, and an MBA with Distinction from Harvard Business School.
I am passionate about golf, a passion, sadly, that my skill level does not match. I live in Palo Alto, California with my wife and two sons.
As part of the Global Venturing Review podcast programme’s Leadership Series, GCV interviewed Arvind Purushotham in May this year:
