JP Morgan Chase start-up portfolio with CFSI powers on
JP Morgan Chase is more than halfway through its five-year $30 million commitment to start-up innovation in its partnership with Centre for Financial Services Innovation’s (CFSI) FinLab, reports Finovate (Banking Technology’s sister company).
Each of the past three years, fintech start-ups have been invited to apply to the accelerator which is focused on finding financial solutions for low- and moderate-income consumers (for example, this year’s challenge).
So far, CFSI/Chase have invested $250,000 each in 24 for-profit companies for a total of $6 million. In addition, they’ve made two grants totalling $500,000. The investments were made in June 2015, June 2016, and this month, so it’s too early to see how well the venture is at picking winners.
We do know that two of last year’s class are already out of business, Bee and Remedy, a surprising result for companies winning a quarter-million investment from the third largest bank in the world just 12 months ago. On the other hand, the class of 2015 already has six early winners from the investments (below), so things look good overall:
- Digit – impulse savings app, which has raised $36.5 million
- LendStreet – marketplace-lending platform, which has raised $28.25 million
- Ascend – loan management service, which has raised $12.75 million
- Even – income smoothing service, which has raised $12.25 million
- SupportPay – child-support management app, which has raised $7.1 million
- Propel – food-stamp support app, which has raised $5.4 million
Since the average investment is just 12 months old, it’s too early to judge CFSI/Chase’s seed-stage investing prowess. And that isn’t even the primary goal of the joint programme with CFSI. But it’s always nice to turn a profit while doing good.
Based on the excellent performance of its first class, we estimate that the venture is already sitting on a paper gain in excess of $1.5 million across the 21 for-profit companies still in business, a 50% total gain on an average of $3 million invested. And they may have had some return of capital with the acquisition of Prism by PayNearMe.