BBVA, the Spanish bank, has restructured its corporate venturing activities, and almost doubled its commitment to invest in fintech, as TechCrunch reports.
BBVA is one of the most active financial services incumbents to embrace the profound change that is taking place in financial services. Already a significant investor in fintech start-ups, it is upping its commitments and establishing a more "arms length" investment vehicle in order to provide more flexibility and to make itself potentially more attractive as an investment partner for emerging fintech companies.
Despite vast early criticism aimed at the banks for underestimating the fintech opportunity, this is a good example of a leading incumbent making significant steps to understand the opportunities being presented by new technology and innovation in this market.
At present, the banks are mostly just dipping their toes in the fintech waters by making some investments and developing partnerships with innovative fintech companies, and M&A has been limited in scope. However we expect that as companies demonstrate the success of their business models and achieve scale, we will see a flurry of M&A activity.
BBVA — the Spanish banking giant that acquired Simple in the U.S. and last year made a $67 million investment in still-stealth mobile-only bank Atom in the UK — is changing up how it plans to invest in fintech startups in the future. The company is shutting down its in-house venture arm, BBVA Ventures; and it is taking BBVA Ventures’ portfolio, the $100 million fund it had allocated to the group, and another $150 million, and putting all of it into a new VC called Propel Venture Partners, based in San Francisco and London.