Canapi Ventures has been busy of late with investments to support what it considers strategic new financial technologies. Since mid-August, the firm has contributed to the funding rounds of five financial technology companies – four as the lead or co-lead investor.
Canapi Ventures is a venture capital firm investing in early- to growth-stage fintech companies. It’s advised by CenterHarbor Advisors and Canapi Advisors LLC, a wholly-owned subsidiary of Live Oak Bancshares.
Live Oak Bancshares officers James “Chip” Mahan and Neil Underwood, as well as former nCino Chief Technology Officer Pete Underwood, are on the Canapi team.
The companies in which Canapi Ventures recently invested, said Canapi Partner Neil Underwood, offer technologies his team feels are important as banking operations increasingly move online.
“We feel they are critical to digital transformation,” he said in an email Tuesday. “Each of these investments focuses on enhancing bank infrastructure, moving technology to the cloud, and leveraging the latest technology standards, with a maniacal focus on the customer journey across all digital channels.”
The companies are:
Moov, which offers open-source application programming interface (API) libraries for a variety of financial services functions, starting with simplifying ways to send, receive and store money for digital transactions. Canapi Ventures was one of several investors in Moov’s seed round.
Blend, which Canapi considers the leader in digital mortgage point-of-sale systems. The lead investment was made in August to the company’s $75 million Series F round.
Alloy, which will use its new $40 million Series B funds to build an identity core for financial service. This platform will bring together a variety of data sources and offer a customizable workflow engine designed to improve financial institutions’ customer onboarding experiences. Canapi Ventures was the lead investor.
Laika, provider of a software platform that helps companies design compliance policies, controls and procedures appropriate to their phase of the life cycle. It also helps clients obtain information security certifications. Canapi Ventures was the lead investor in Laika’s $10 million Series A round.
Greenlight, whose family finance product is a money management platform that includes a parent-managed debit card that allows parent-child transfers of money and management of earning and spending. The Greenlight debit card and app allow kids to explore the world of money. Canapi Ventures co-led the company’s $215 million Round C of funding.
While Canapi Ventures declines to specify the amount of its investment in each of these five fintechs, Underwood said that, to date, his group has invested about 25% of its capital, which totals $600 million.
“Critical themes for us continue to center around Identity, Governance Risk & Compliance (GRC), and digitizing mission-critical workflows, specifically around loans, deposits, and payments,” he added. “In a post-pandemic world, the fintech movement has only accelerated. Onboarding and servicing of new customers through digital channels has become critical on every bank’s roadmap. Software companies that align with this macro trend are now in the spotlight and Canapi seeks to invest in them on behalf of our bank LP [limited partner] base.”
And Canapi anticipates more such investments in the coming months in these same areas, according to Underwood.
“Given our LP base of close to 40 regional banks, we have many fintech CEOs who want access to our bank investor base. It’s our job to weed through each of these and find those most applicable to the massive movement going on around digital transformation.”
And if Canapi Ventures sees a critical need that isn’t being addressed?
“In a case where we see a need, but a company doesn’t exist, we will turn to an incubation strategy, much as we have done with nCino, Apiture, Payrailz, Finxact, etc.,” he said. “While consuming more resources, this thesis has worked well in the past.”