Citi Ventures celebrates 15 years in business with more than 200 investments and 30 exits

Corporate venture capital, or CVC, has always been a strange corner of technology investing. While operations like Citi Ventures still have a mandate to generate returns through IPOs and mergers and acquisitions, they are also tasked with investing in startups that can provide some strategic support to the parent company. Citi did not share the assets under management of the fund, nor the amount it invests each year, but confirmed that the capital is from the bank’s balance sheet.

Notably, Citi Ventures chose California as its headquarters, with Purushotham still based in Palo Alto, not New York. “When it was founded, we started hiring people with Silicon Valley venture capital experience,” Lee said. “The journey over the last 15 years has been to bring that DNA, skills and experience and then use it to the benefit of the bank.”

When I asked him how Citi Ventures balances its dual goals of generating revenue and supporting Citi’s technology development, Purushotham admitted that the purpose of his group at its highest level is to “exist for strategic reasons.” However, he said the best-performing companies will also, by definition, be the most beneficial to Citi’s overall growth. “If the goal of a program like ours is to work with companies… that will have an impact on our industry, and that naturally pushes us toward more successful companies,” he said.

There will inevitably be some imbalances. I reported on one of Citi Ventures’ most recent projects Recent investmentsthe stablecoin infrastructure company BVNK, which has made progress Acquisition interest from MasterCard and Coinbase. BVNK also received investment from VisaWhich put some of its corporate backers in an awkward position. Purushotham declined to comment on the deal discussions, saying only, “We will monitor that space.” However, he said that exits to competitors are rare, and that Citi is also investing alongside other financial venture capital firms such as American Express Projects.

Another question related to corporate ventures is “build versus buy,” or when to invest in outside companies rather than developing technology in-house. The answer is becoming less clear as the line blurs between Wall Street incumbents like Cityscape and fintech disruptors like Robinhood. Pointing to one of his portfolio companies, Purushotham said, Manoushehwhich has become a major partner of banks (while also pushing often opposing policies such as… Open banking).

Purushotham argued that build versus buy is often not an “either/or” choice, though his team stays updated on what Citi’s 30,000 software developers are working on. When Purushotham and his investors look at startups, they try to understand whether there is something unique about the startup model that makes it worthwhile to partner. He highlighted a number of its investments, including Wildfire, which provides a browser plugin that helps consumers shop for deals. Citi has integrated the tool with its shopping platform.

Today, with just 16 investors spread across Silicon Valley, New York, Tel Aviv and Singapore, Purushotham’s team is more akin to Menlo Ventures than a Wall Street giant. But with a 230,000-strong bank behind the operation, Citi Ventures has been able to carve out its own corner of Silicon Valley. “We have always believed that we are more than just capital,” Purushotham said.

Leo Schwartz
tenth: @leomschwartz
Email: leo.schwartz@fortune.com

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Project deals

– Valthusa San Francisco-based developer of AI-powered systems designed to identify biological threats, has raised $30 million in seed funding from OpenAI start finance, Lux capitaland Founders finance.

– Avaa San Francisco-based credit building platform, has raised $15 million in seed funding from… Greylock, transformation VC, Firebolt, The twine Projects, certainly Projects, challenge.vcet al.

Private equity

– Mainsail Partners I invested $35 million in it FieldFloa Denver, Colorado-based project and safety management software for specialty subcontractors.

– Marilyn justice Partners acquired Explaina platform based in Raleigh, North Carolina and Brighton, UK, for creating educational platforms. Financial terms were not disclosed.

Exits

– Fire blockssupported coat administrationagreed to the takeover mobilea New York City-based wallet infrastructure platform for fintech and cryptocurrency companies and backed by Andreessen Horowitz and Founders finance. Financial terms were not disclosed.