Santander InnoVentures seeks out Israeli Fintech innovation

By Gabriel Avner

The DLD convention that was held in Tel Aviv from September 6-12 drew visitors from across the tech world looking for new innovations and promising investment opportunities. Among those in attendance was Mariano Belinky, a managing partner at Santander InnoVentures, Banco Santander’s $100 million corporate venture capital (CVC) fund that was launched in July 2014.

Based in London, Santander InnoVentures partners with startups on a global scale. Since their launch, they have added three companies to their portfolio, which consists of Israeli MyCheck, iZettle from Stockholm, and Cyanogen with its headquarters in Palo Alto.

Coming from the banking sector, they have a focus on companies related to Fintech. This includes venture verticals that work with smart data analysis, payments, marketplace lending, e-investment advisory, and digital delivery of financial services. Through their partnerships, InnoVentures seeks out solutions to bring digital solutions and products that can benefit their clients and customers from across the regions where they operate.

Increased interest in Israel’s tech ecosystem
Belinky notes that this trip marks his third visit to Israel since February 2014 when his firm closed their deal with MyCheck, a company that has built a no friction checkout technology that allows users to pay merchants automatically. The service provides sellers with valuable insights into customer behavior to help them provide more effective service.

“Israel is the only place that we cover where we do not have a bank branch,” he explains, adding that it is, “because the depth and breadth of the talent and innovation here is so impressive.” One of the advantages that Belinky cites in interacting with the Israeli startup ecosystem is the willingness of the players here to collaborate and network.

Belinky says that he sees Big Data solutions and cybersecurity to be of particular interest in Israel for their use in Fintech due to the strength of those two sectors here. He explains that they also see a big potential for blockchain development in Israel due to the deep understanding of the cryptography skills needed to produce such products on a significant scale.

He notes how the supply of talented cryptographers who have been trained during their military service has led to Israel being one of the top locations in the world for developing blockchain technology. Belinky cited companies like GetGems and Polycoin for their advances in this field, adding that Colu was also doing interesting work with the technology.

“Finding people who have experience in coding enterprise level cryptography are like finding a needle in a haystack,” says Belinky, noting that Israel is a rare case where the opposite appears to be true, especially in comparison with Silicon Valley where he hears complaints of companies unable to recruit the necessary talent.

The blockchain and distributed ledger technologies have the potential to help the Fintech sector make massive improvements, Belinky explains. He points to how down the road, transfers between banks can be sped up significantly through the secure and easily verifiable technology that has been steadily gaining traction in the financial world. By having a source that is trusted and easily updated across a global network, it eliminates the need for the slow pace of the three to four days that it can take for funds to be confirmed and moved between international accounts.

Seeking new partnerships
In coming to Israel, Belinky says that InnoVentures is constantly on the lookout for new opportunities with local companies. As the largest bank operating in the Eurozone with a market capitalization of over 88 billion euros, the Santander Group stands behind the InnoVentures initiative with a substantial financial backing for investing in promising companies. They are currently operating in most of the significant areas, including branches throughout Europe, the United States, and parts of South America.

Belinky adds that beyond the monetary strength that InnoVentures represents, they offer their partners essential resources such as advisory assistance in how to scale globally as well as their wide network of contacts.

On this visit, he hoped to delve deeper into the Israeli ecosystem to forge more connections with companies here. Moreover, as awareness of InnoVenture expands locally, his VC will be able to seek out productive partnerships to help Israeli startups expand to the global markets.

Belinky says that he plans on returning to Israel again this November for the Bank Innovation event, and with any luck, to sign new deals with trailblazing companies as well.

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