Santander spins out FinTech venture capital arm, doubling funds to $400m

Banco Santander has launched Mouro Capital, an autonomously managed venture capital fund focused on FinTech and adjacent financial services firms.

The new brand succeeds Santander Innoventures and will have $400 million in allocated funds after the bank doubled its current commitment.

Mouro Capital will manage the existing portfolio of Santander Innoventures, which was established in 2014 with an initial $100 million allocation, increasing to $200 million two years later. Since then the fund has invested in 36 startups in Europe and the Americas.

The decision to spin out its investment arm is part of Santander’s four-year (2019 to 2022) €20 billion digital and technology investment plan.

The fund will continue to deploy capital across Europe and the Americas, primarily leading investment rounds with initial investments of up to $15 million and further follow-on reserves.

It will be led by general partner Manuel Silva Martínez - who joined Innoventures five years ago and has led the fund since 2018 - and senior advisor Chris Gottschalk, who joined from Blumberg Capital in 2019.

Martínez explained: “By becoming more autonomous, we will gain in agility, attract entrepreneurial talent to the investment team, and further align to our entrepreneurs’ success."

Banco Santander executive chairman Ana Botín said: “Innoventures has almost doubled the cash invested, despite being relatively young for a venture capital fund - our goal is to build on that success, and by increasing our investment, while giving greater autonomy to the fund, we can be even more agile and further accelerate the digital transformation of the group.”

The fund has been an early investor in companies which have since reached unicorn status, such as Ripple, Tradeshift and Upgrade. It has also already had realisations, including the sale of iZettle to PayPal in 2018 for $2.2 billion, and Kabbage last month.

Santander Innoventures has already delivered an internal rate of returns in the 25 to 35 per cent range since inception in 2014 and circa 1.75 times cash-on-cash multiple portfolio-wide.

Mouro Capital will remain a key driver of Santander’s ambition to be a partner to startups, generating tangible value through strategic collaborations. As of today, 70 per cent of the fund’s current portfolio companies are working with Santander.

Some of those collaborations have been instrumental to key innovations over the past years, including the utilisation of Ripple’s technology within One Pay FX for real-time cross-border payments; the use of Nivaura’s technology for the world first end-to-end blockchain bond issuance; the delivery of end-to-end digitally enabled working capital solutions by Tradeshift; and the utilisation of Crosslend as a platform for private debt mobilisation and regulatory capital optimisation.

Mouro Capital will add internal resources to its investment team solely dedicated to partnerships and business development opportunities within its portfolio.

The new brand, Mouro Capital, has its origin in Mouro Island, which sits at the entrance to the Bay of Santander and is host to a single lighthouse which guards the port.

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