Hi everyone, Charley here.
I thought it would be interesting to put together a quick list of active US based fintech companies that have corporate venture activity. It’s a good way to get a sense of how these companies think about the future of themselves and their industry :)
Surprisingly (or maybe not so surprising given the amount of cash they generate), Coinbase came in at the top with over 70 companies that have publicly announced investments from Coinbase Ventures. Stripe came in second with over 20 companies that it’s invested in across a wide range of companies.
Below is a deeper look at these investments and others.
Coinbased announced its official venture fund in early 2018 and has been extremely active across the crypto ecosystem. Notable / more well known companies now include Dapper Labs (the creators of Cryptokitties and NBA TopShots), BlockFi, OpenSea, and BisonTrails (whom Coinbase ended up acquiring). Its portfolio does seem to align with the announced purpose of providing financing to promising early stage companies that can move the space forward - so there isn’t necessarily a strategic partner relationship requirement that some corporate VCs have. The team also actively invests in Coinbase alumni that go out to start companies in the defi + crypto space.
Over 20 companies have announced fundraises in which Stripe participated in - and it’s all over the board! The first time Stripe came on my radar was when it was announced it had invested in Monzo in 2017. Fast forward to 2019, Step announces that Stripe was leading its Series A which is a pretty big deal. Typically in order to lead, you’re no longer writing small flyer checks, but rather meaningful check sizes, and Stripe was definitely down to play ball. It also ended up leading Fast’s $20M Series A and co-leading its $102M Series B for its checkout platform, and most recently led a substantial $115M round into Ramp (corporate card + expense management provider that I used to work at).
It seems as though Stripe’s corp dev strategy is a mix of investing in companies that have Stripe alumni + Stripe usage (Assembled - support software, Accord - B2B sales software), will help push Stripe’s product as a marquee client (Step, Ramp, Lambda School maybe??), highly complementary (Pilot - automated accounting, CheckHQ - embedded payroll), or potentially strategic in the future (Paystack - which Stripe ended up acquiring for $200M to expand into Africa, PayMongo - Stripe led series A into a Stripe for the Philippines, Rapyd - co-led series B for international payouts platform, I would even put Stellar in this camp).
SoFi has most notably been active on the acquisition front (Galileo, HK based 8 Securities), but it has also built up an interesting venture portfolio. It was an early investor in BlockFi (one of the leading defi platforms today) and most recently invested in Wage FKA Verix in the income verification space (which has other well funded competitors such as Atomic, Argyle, Pinwheel, Citadel ID, Plaid, etc). Interestingly enough, it also seems to have invested in Partake Foods, which creates allergen-free cookies.
Brex most recently announced its first investment, participating in a $8.75M seed round into Kodo which came out of the YC W21 batch and provides corporate cards for Indian companies. Definitely worth keeping an eye on the team there to see how much active it’ll get looking towards other areas to expand into.
I feel as though Affirm would have had more investments, but surprisingly I couldn’t find many that have Affirm as a direct investor. In the recent acquisition of Returnly, Max Levchin had invested in the Series B. Max and Nellie (his wife) also have their own venture fund, SciFi, that invests across fintech, payments, ecommerce, and much more. I would imagine that several of the portcos such as Capchase, Teller, Settle, TryNow, etc could be strategic to Affirm at some point, but this is mostly conjecture on my part for now :)
Square has had a few investments - with the most interesting being Oura, which provides a wellness-tracking ring + app that founder Jack Dorsey loves. Square also invested $18M into Italy based Statispay, which provides mobile payment services across Italy, as well as Transparent Systems, which is developing a “real-time” cryptographic payment settlement network.
The two investments I could find from Shopify were the strategic investment into Pipe’s March fundraise and an investment into Toronto-based Swyft in April. Swyft also looked to be quite strategic, as the company enables merchants to offer same-day delivery through integrations with Shopify, WooCommerce, and Magento.
Carta Ventures has also started to become active, participating in companies that are strategic to Carta including Alto Solutions and Panther. Alto provides a platform that simplifies investing out of an IRA into alternative assets while Panther helps with international payroll.
Finally, I did want to highlight the work that PayPal Ventures has been doing as I think some of the deals it has structured are quite unique. It most recently announced a strategic investment into Codat, APIs for accounting data, and has invested in other fintech companies including Acorns (about to SPAC!), LendUp, Dosh, Raise, Tink, and many more. PayPal isn’t afraid to take really big swings either. Prior to the IPO, PayPal committed to invest $500M into Uber while also ensuring that PayPal would continue to be a highly strategic partner to Uber’s superapp aspirations.
I think we’ll continue to see more activity as fintech companies continue to grow in valuation (and also start to go public). These were the main companies that I found with public investment activity in the US, but please tweet at me if I missed anyone :)