Long regarded as a megatrend by Citi Ventures, democratization broader and easier access to financial services is bearing fruit as an investment theme, says Vanessa Colella, global head of venture investing and strategic growth initiatives for Citigroups technology accelerator and fintech fund. With technology increasingly economical and accessible to new markets and underserved populations, there is a much higher degree of trust, and therefore acceptance, by consumers and small-business owners, says Colella, 46, a onetime biology teacher who worked at McKinsey & Co., Yahoo!, and Citis North American consumer bank before joining Citi Ventures in 2013. Theyre getting accustomed to interacting with highly bespoke financial services in a much more automated way. Portfolio companies of Palo Alto, Californiabased Citi Ventures, which was started in 2010 by its CEO, Citigroup chief innovation officer Deborah Hopkins, reflect democratization trends; they include online wealth management pioneer Betterment, mobile payments company Square, and brokerage app developer Trade It. BlueVine Capital provides business lines of credit and invoice factoring, C2FO addresses working capital needs, and a recent portfolio addition, FastPay Partners, finances receivables for digital enterprises. Were looking at this specific sector of payment and at how to use some of these tools to bring capital management to companies that ordinarily would not have been large enough to access those kinds of sophisticated tools, Colella says. Noting that many traditionally integrated banking services disaggregated, or unbundled, after the global financial crisis, she is anticipating a swing back to rebundling and eyeing potential winners as that unfolds. Among those Colella sees as well positioned are money transmitter TransferWise and Berlin-based bank Number26.
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