Canapi Ventures Aligns Interests Of Banks And FinTechs

After receiving $545 million in funding, VC firm Canapi Ventures announced that it has launched its inaugural venture capital fund.

Launched in 2018, Canapi focuses on early to growth-stage FinTech companies, with offices in Washington, D.C., Wilmington, NC, and New York City. Its first investment was last year in Built Technologies, which provides cloud-based software to the construction lending industry.

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The funding comes from a variety of investors, including the Canapi Alliance, which is made up of more than 35 banks and investors with over 20 million customers across 45 states. The Alliance also includes 11 of the top 50 and 23 of the top 100 banks in the United States measured by asset size.

Other investors in Canapi are The American Bankers Association, the Independent Community Bankers Association and several state banking associations.

“Banks are looking for technology partners that can help them thrive and innovate in a rapidly changing and hyper-competitive market. We believe many of these solutions have to come from early stage companies and that is why we launched Canapi Ventures,” said Canapi Co-Managing Partner Gene Ludwig, adding that the fund’s plan wants to align the interests of both banks and the companies to which they’ll be lending.

Known for his expertise in FinTech regulatory and compliance matters, Ludwig previously served as the 27th Comptroller of the Currency and is also the co-founder of Promontory Interfinancial Network, as well as the founder and CEO of Promontory Financial Group.
Other members of Canapi’s team include Partners Walker Forehand, Neil Underwood, Dan Beldy, and Jeff Reitman as well as Senior Advisors Jeffrey Goldstein and Jim Hale.
It’s not just VC firms, however, that are investing in FinTechs—governments are also getting in on the action. Late last year the Hong Kong Science and Technology Parks Corp. and the United Kingdom’s Department of International Trade revealed that they were partnering to boost collaboration in FinTech between the two countries. In addition, Israel’s Banking Supervision Department recently announced that it has opened an assistance center focused on FinTech.

Meanwhile in the U.S., Central Payments, the payments division of Central Bank of Kansas City, has formed Falls Fintech, a mid-stage Fintech accelerator, as well as the launch of CPX, a new open API platform. The project has the support of Mastercard, which also serves as a founding sponsor.