Chapter 22: Venture Capital And Banks Investing In Startups Via Corporate Venture Capital

Open innovation strategies have proved to be helpful and successful in technology sectors and companies such as Google, Apple, Facebook, and Microsoft, so why not apply this Open Innovation approach to banking? This entitles the possibility of large established banks to invest in FinTech startups. FinTech Startups raised USD 2.7bn in 226 deals in the first quarter 2017. Although is figure is impressive, in reality there is a decline of invested dollars to venture capital (VC) backed FinTech startups in 2017. At the current rate it is estimated to have an 18% drop from 2016. There are 22 FinTech startup unicorns¹ valued at USD 77bn. In the U.S., a startup named SoFi, raised USD 500 m at a USD 4.5 bn valuation, while in China, Rapid Finance, valued at USD 1bn filed for IPO in the first quarter 2017.