In November 2015, e-commerce giant Rakuten made a seemingly sudden leap into fintech financing, launching a dedicated $100 million fund. The Tokyo-based company, which has a financial services business but is better known as an Amazon.com-like retailer, was no stranger to strategic venture capital investing, however. Two years earlier it had formed Rakuten Ventures, whose portfolio includes algorithm marketplace Algorithmia and file-sharing service Send Anywhere; in July it doubled the size of its Global Investment Fund, to $200 million. (The unit also manages a ¥10 billion [$96 million] Japan Fund.) Headed by managing partner Oskar Miel, a Harvard MBA and former JPMorgan Chase & Co. banker who has been with the Rakuten organization since 2013, the Rakuten FinTech Fund in May led a $15 million investment round in U.K. remittances start-up Azimo. Other holdings include U.S. companies BlueVine Capital (invoice factoring), Insikt (loan originating and investing), and WePay (small-business and crowdfunding payments); U.K.-based global payments servicer Currencycloud; and Bitnet Technologies, a Bitcoin payment processor that Rakuten acquired in August and made the nucleus of a blockchain lab it set up in Belfast. Blockchain and distributed ledger are in their infancy, Miel says, but once consensus and adaptability are achieved among participants, they will reduce the cost of transaction processing and enable more efficiency across the banking, payments, insurance, and asset management industries. He also observes that the finance industry has traditionally required a lot of sector-specific knowledge, but we are recently seeing a new generation of outsiders bringing disruptive and innovative approaches to how the industry operates. This is effectively changing the landscape and spurring new competition that will no doubt bring about qualitative change in the way the financial industry operates.
The 2016 Fintech Finance 35 Click below to view profiles