Santander, the Spanish multinational banking giant, has announced that its fintech venture arm will be spun off and managed more autonomously in the future.
Formerly known as Santander Innoventures and first founded in 2014, the VC will be renamed Mouro Capital. It will continue to be led by general partner Manuel Silva Martínez, who joined Innoventures five years ago and has headed the fund since 2018, and senior advisor Chris Gottschalk, who came from Blumberg Capital last year.
Despite his newly established independence, Santander will remain Mouro Capital’s sole investor / LP, including doubling its current exposure as the VC has $ 400 million in allocated funds.
However, to my knowledge, Mouro can invest faster with autonomous management by the multinational bank, including placing bets alongside pure fintech or financial services and in start-ups that could compete more directly with Santander̵
In the meantime, Santander Innoventures early supported a number of so-called unicorns (companies valued at over a billion dollars). These include Ripple, Tradeshift, and Upgrade. There have also been a number of exits, including iZettle to PayPal in 2018 for $ 2 billion and Kabbage, which Amex acquired last month.
“Mouro Capital strives to contribute its fintech expertise, its global network and its many years of experience with successful investments in startups in the early and growth phase worldwide. The fund will continue to deploy capital across Europe and America, primarily leading investment rounds with initial investments of up to USD 15 million and additional reserves, ”says Santander.
I have written questions to Mouro Capital’s general partner, Manuel Silva Martínez, to find out more. The following questions and answers have been easily edited.
TechCrunch: What enables the fund to do this that it hasn’t been able to? Does its independence allow a more aggressive investment in products that could directly compete with Santander’s own services and products? Or is it more about speed in terms of the investment committee making faster decisions?
Manuel Silva Martínez: As a corporate venture capital fund, Santander InnoVentures has been quite optimized in terms of business activity and investment speed. However, the development to the Mouro Capital structure enables an additional focus on entrepreneurs and co-investors (whose success is the main goal), even faster / more nimble processes and possibly a bolder investment strategy within the topics and investment policy of the limited partner agreed with our agreement.
Moving to a separate brand also reduces the potential affiliation that business owners fear as potentially conflicting (commercial, intellectual property), which is further reassured by a cleaner legal segregation. In terms of investment policy change, Mouro will indeed have a bolder investment strategy that may involve investing in perceived competitors (which has been done in the past, e.g. Neobank Klar in Mexico, Lender Creditas in Brazil, or Curve in the UK) ), but this still fits the logic that if venture capital associated with an industrial company were to be a beacon for the “coming industry”, investments in emerging competitors that could transform the future / long-term competitive landscape will be as aligned as any another topic.
In addition, Mouro will also explore the “limits” of financial services so you can expect Mouro to invest in areas such as proptech, mobility, logistics, edtech, etc. from time to time.
How big is the current team in terms of investment members and other support? And how will that change in the future? i.e. further operational / portfolio support or new investment partners etc.
The current investment team consists of six members, with finance, legal / compliance and communication also internalized (i.e. three additional people). The team will indeed grow. Early to say, but we would expect the investment team to add another 3-4 professionals with backgrounds that match our values (fintech know-how, entrepreneurial / operational know-how, contact with specific networks we are interested in , especially in Europe).
In addition, we will be building a business development and operational support team to help our companies grow and develop mutually beneficial relationships with Santander and across the portfolio.
Aside from largely focusing on fintech / financial services, maybe you can talk a little more about the future Mouro thesis.
As you say, we look very far into the future of financial services and even look beyond today’s industry boundaries. We ask ourselves fundamental questions and build strong theses on topics we are passionate about while being open to new ideas that challenge our beliefs. In a way, we’re working on three horizons that complement each other to accommodate different angles of the industry:
- In the short term, we are investing in technologies that enable established companies to transition to digital media through better processes. Questions like: How can we integrate automation and real-time applications into the banking infrastructure? How can we build richer data ecosystems? What new customer value propositions are emerging in developed and developing markets? How can banking services be provided via APIs? How can funding be embedded in third party travel?
There are also companies with superior skills (technology, data science, installed capacity) that, when combined with banks or other startups, could build new businesses or develop businesses from scratch. Questions like: How are new technologies and new technical paradigms (artificial intelligence, blockchain, quantum computers) changing the way banks work? What new enterprise software utilities and platforms will be the gateway to tomorrow’s financial services? This is about building new businesses in the status quo of today’s industry by lining up the right resources and actors.
In the long term, we also look at how the industry should evolve and reinvent itself, possibly by transcending itself and merging with other industries to create new gaps. Questions like: How can industries become more integrated and converge to new, financially funded white spaces? What role does money play in a data-rich world?