BBVA plans to invest as much as $150 million in new capital to support Propel, bringing its total commitment to over $400 million, including its previous investment in 2016. The announcement builds on the initial successful relationship established five years ago, which has enabled Propel to partner with leading innovators such as Coinbase, DocuSign, Hippo, Guideline, and Neon.
The bank was a pioneer in anticipating the prospects and opportunities in the financial technology industry, partnering with Propel as its first independent fintech VC fund to channel investments. This new commitment from BBVA gives Propel the flexible financial backing needed to continue building a world-class fintech venture fund. The first $50-million fund will be launched in the next few weeks, followed by funds in 2022 and 2023, which will be open to outside investors.
“Propel gives BBVA a privileged window into the fintech ecosystem,” said BBVA executive chairman Carlos Torres Vila. “The excellent performance of the funds is coupled with lessons and experiences BBVA and the entrepreneurs have shared, helping to accelerate our overall transformation.”
Since its inception, Propel Venture Partners (PVP) has invested in more than 40 companies in five countries, including the United States, Mexico, and Brazil. The initial fund has already shown clear signs of success with two billion-dollar exits and several companies with valuations exceeding $500 million. According to CB Insights, the fintech sector has grown from $22 billion in 2016 to $40 billion in 2020. In 2020, the pandemic year, Propel’s portfolio companies raised over $1 billion in new financing.
Society’s vulnerability to COVID has accentuated the shift in priorities. Digital financial services are no longer considered ‘nice to have’, but a must. The venture capital model directs capital to the highest potential investment opportunities and is a driver of economic growth. Since 2016, Propel portfolio companies have created over 10,000 jobs.
Jay Reinemann and David Mort, who have been investing together since 2013, will co-manage the fund. The team has decades of experience working with and for companies in the financial services industry, including card networks, retail and commercial banks, insurance companies, and software businesses.
PVP will be investing in the next generation of entrepreneurs rebuilding financial services. The fund will continue to lead and co-invest at the earliest stages while opportunistically co-investing at later stages. The geographic focus will remain on the Americas with the flexibility to invest globally.
In addition to investing in early-stage startups, BBVA maintains a closer relationship with the global fintech ecosystem through a wide array of acceleration programs aimed at exploring digital technologies and collaborating in new business segments. Additionally, the bank has forged strategic partnerships with tech giants such as Uber in Mexico or Xiaomi in Spain.