When corporate venture capital investments hit their mark, they have a direct strategic impact on the parents business. Santander InnoVentures, the London-based strategic investing unit of Spains Banco Santander, showed how its done after participating in a $135 million Series E financing for Atlanta-based Kabbage in November 2015. Santander UK began working with the online lender in January to create an automated underwriting platform that delivers almost immediate decisions on small- and medium-size-business loan applications. If youre a small business in the U.K., it takes up to four weeks to get an answer from a bank, says InnoVentures managing partner Mariano Belinky. Weve taken that to minutes. In ten minutes you have an answer. Also in the U.K., Santander in May released a pilot app for international payments, using the blockchain technology of San Franciscobased Ripple, in which InnoVentures made a $4 million Series A investment in October 2015. Were making good progress with our portfolio companies in terms of adding value to them and them adding value to Santander and our clients, says Belinky, 41, a former McKinsey & Co. principal who took charge of the venture fund five months after it was launched in July 2014 with $100 million. Some 70 percent of that original amount has been placed in 12 portfolio companies. In July of this year, Banco Santander put an additional $100 million into InnoVentures, in part to focus more on Latin America exploring applications for financial inclusion, such as microlending and micropayments and to make a big push toward artificial intelligence, says Belinky, who completed five years of doctoral studies in AI at Barcelonas Universitat Politècnica de Catalunya in 2009. In March, InnoVentures took part in a $5 million Series A round for London-based Elliptic, which applies machine learning in blockchain monitoring and compliance, and in June it bought an undisclosed stake in Socure, a New York company that uses pattern recognition in verifying digital identities. The latter is an example of what Belinky calls a by-the-way business model. I like when an entrepreneur comes to me and says, Weve solved X and, by the way, we are using AI.
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