American Express is getting into the venture capital business – and it's not starting small.
The New York-based bank Tuesday announced a multi-year plan to sink $100 million into start-ups that serve "critical parts of the digital commerce experience." It wants to find and develop new technologies that will help AmEx's own "digital transformation."
So if you've got an idea that involves loyalty or rewards, mobile and online payment management, fee-based services, security and fraud detection, and data analysis – well, AmEx may be a potential backer.
Harshul Sanghi, managing partner of the bank's enterprise growth group, will be managing AmEx's venture fund from Silicon Valley. He was hired in September from Motorola Mobility Holdings, which Google is in the process of acquiring. (Earlier this year, the search engine agreed to pay $12.5 billion for the company in a move thought to be mostly about the patents it will gain.)
American Express is hardly the first large company to invest in start-ups: Its rivals Visa and Mastercard do it. And AmEx bank has invested before – in April it led a $19 million funding round for New York City-based Payfone, a mobile payments startup. (That same month, Visa bought a piece of Square, Twitter co-founder Jack Dorsey's mobile payments startup.) And in September, AmEx participated in e-commerce platform Rearden Commerce's $133 million round. Among the offerings from Rearden, founded in 1999: A Web-based "intelligent" personal assistant for business..
But the new $100 fund marks a more organized, official strategy.
"The payments industry is undergoing a fundamental change as the very nature of commerce is redefined," Sanghi said in a statement.
The company will hire 30 to 50 people to track down deals and work with developers.