Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Matt Carbonara was recorded in March 2020.
Matt Carbonara, Managing Director at Citi Ventures, discusses the fund’s activities and focus.
Sramana Mitra: Let’s start by introducing our audience to you as well as what is happening at Citi Ventures.
Matt Carbonara: We invest in category-defining startups that have the potential to augment and enhance these products. We have a portfolio of about 50 companies today. We’ve invested in 80 companies over the history of the fund.
We have 14 investment professionals. We have eight here in Silicon Valley that go between Palo Alto and San Francisco. We have three in New York, two in Tel Aviv, and one in London. We work closely with our operating colleagues to understand the gaps that they have.
We spend time meeting startups in the landscape and try to identify the market-leading and category-defining startups. We bridge those companies into Citi in order to help accelerate the adoption of new business models and technologies. We do this across a number of areas. We sit inside the Chief Innovation Officer’s organization.
One of our goals is to help Citi innovate faster by investing in these companies that really solve problems that Citi has, bridging them into Citi, and accelerating Citi’s adoption of those technologies.
Where we can really help is on the commercialization side, in trying to get companies additional customers in either Citibank or some of Citi’s clients. Of our current portfolio, 60% have some kind of commercial relationship with Citi. We define a commercial relationship as doing a pilot or POC, or being a fully commercialized within the bank.
Sramana Mitra: Is it a specific-sized fund, or is it an evergreen fund?
Matt Carbonara: Think about it as evergreen. We make 8 to 10 investments in a year. Our typical investment is anywhere from $2 million to $15 million. We are very focused on the commercialization piece. The earliest we go is when the company has a product in market and a handful of customers. We go as late as pre-IPO. Historically, we’ve invested across that whole spectrum of startup sectors.
Sramana Mitra: What about geography?
Matt Carbonara: We are pretty broad. We have done a lot of deals in the US, Israel, Europe. We are currently looking at investments in Latin America. We’ve done investments in Singapore and India as well. We know that innovation is not restricted to one geography. It happens everywhere. Increasingly, we are looking at other geographies.
Sramana Mitra: What’s the split between B2B and B2C?
Matt Carbonara: We do both. We have a consumer bank that serves consumers. We’ll invest in B2C technologies. We serve a lot of institutions as well. We do this across five key areas.
One of the big buckets that covers a couple of those five areas is banking and finance-focused. That’s where Citi could be a partner, or go-to market partner. The second bucket is commerce and payment, so uncovering better ways to engage consumers by providing innovative offers and leveraging new payment ways and infrastructure.
Another new area is property technology. The other broad practice, and where I spend more of my time, is the enterprise side. Think of Citi as a consumer of technology in order to enhance the products and services that we offer. These are areas like cyber security, cloud, and developer tools. We have 40,000 developers inside of Citi.
How do we help make them more effective and able to deliver applications more rapidly and efficiently to our customers. The second bucket there would be data and analytics. There’s obviously a lot that can be gained from using the data that Citi has to enhance customer experience and offer better services to its customers.
Third is offer customer experience and marketing. These are things around improving the contacts in our call centers, improving the online experience for our customers. More recently, we’ve looked at areas like automation. How can we automate processes in the bank?