In a divergence from its traditional method of tech investing, Spanish banking firm BBVA is closing its venture arm, known as BBVA Ventures. The parent company will then take the $100 million it had in that fund, along with an additional $150 million, and form a venture capital arm to be known as Propel Venture Partners.
The bank said in a release that bowed on Thursday (Feb. 11) that it will use that $250 million in a United States fund and a European fund. There will be a London office opened, as the fund will invest in United Kingdom FinTech firms. Other areas of focus will include credit, wealth management and security.
The firm has not announced any new investments as of yet, with ones in place including Taulia and Personal Capital. TechCrunch reported, however, that there is an investment in place, in a lending startup known as Earnest, which “had never been disclosed before but is quietly being made public now.” The site reported that the bank made a strategic investment as part of the startup’s most recent $275 million round in equity and debt, with the BBVA investment coming through equity stakes.
The investment strategy, said TechCrunch, will come through new investments and follow-on rounds; it is not yet clear if any funds will be raised beyond the $250 million. The strategy also dovetails with the fact that startups may have had more interest in working with venture capital outfits than with large banking entities. Also, said TechCrunch, in delving into strategy, the new investment vehicle will be able to take stakes bigger than the 5 percent threshold seen in the previous BBVA finance arm.