They’re funding and incubating early-stage, high-risk technology companies. They’re seeding their investments in Silicon Valley, Silicon Alley in New York City, Silicon Prairie in the Midwest and wherever else such companies are creating financial technology.
Banco Bilbao Vizcaya Argentaria recently said it would invest $100 million through its newly created BBVA Ventures arm.
The division of the Spanish banking group will invest between $500,000 and $5 million to entrepreneurs to fund their businesses, pick their brains and potentially use the technology they create.
Though BBVA is new to corporate venture capital, the concept has picked up steam in the past several years, says Matthew Harris, managing director at Bain Capital Ventures.
"The trend of corporate venture outside of financial services is just generally up," Harris says.
"The reason that people speculate it has increased is the amount of R&D spend went down pretty dramatically as a function of the credit crisis," he says. "So there is this sense" that banks and other financial services companies "have to invest in and ultimately purchase innovation from outside."
Banks, especially, have useful insight because of the amount of data they curate, Harris says.