With this new structure, Propel was able to compete with the many established venture funds in Silicon Valley. Propel's focus is on early‐stage investment opportunities at the intersection of technology and finance. Since its formation, Propel's financial performance has outperformed its own expectations; four of its companies, between the Propel portfolio and BBVA Ventures legacy portfolio, have achieved unicorn status, including two IPO and three exits. Having a team on the ground in the centre of the US startup ecosystem has proved to be essential for BBVA.
Looking forward, the expectation for Propel is that it continues to invest in fintech businesses that provide strategic value and financial returns for BBVA. Thanks in large part to Propel, BBVA has a better insight into the talent and capital that can help it build projects to continue transforming itself.
Introductions
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Javier Rodríguez Soler, CEO, BBVA USA
Javier Rodríguez Soler was named President and CEO of BBVA USA and US country manager for the BBVA Group in January 2019. Most recently he has been overseeing the acquisition of BBVA USA by PNC. He was previously BBVA Group's global head of Strategy and M&A, and before that he was managing director for Corporate and Investment Banking. Prior to BBVA, Rodríguez Soler was director of Investor Relations and director of Strategy and M&A at Endesa. He was also an engagement manager with McKinsey and Company.
Jay Reinemann, General Partner, Propel Venture Partners
As a partner at Propel, Jay has led investments in Coinbase, Neon and DocuSign, among others. Before BBVA spun off the fund and became a limited partner, Jay led BBVA Ventures including the bank's acquisition of Simple. Prior to Propel, Jay held several positions at Visa in digital transformation, emerging projects, and ecommerce. As head of the Visa Corporate Ventures and Strategic Alliances Group he led investments in information security, mobile and payments technology companies.
Ricardo Forcano, former CIO
Ricardo Forcano was with BBVA from 2011 until 2020, when he decided to leave the bank to start an academic research project. His last role in BBVA was Chief Information Officer and Global Head of Engineering and Organisation. Ricardo was a member of BBVA Group's Executive Committee and his responsibilities included the bank's technological architecture, the development of next‐generation systems and software, the operation of the infrastructure and security. Before that Ricardo was Head of Talent and Cultures and director of Business Development for Growth Markets. As Director of Corporate Strategy, he was responsible for the launch of Propel. Ricardo graduated from the Universidad de Zaragoza in 1995 (MA in Engineering) and has an MSc in Technology and Policy from Massachusetts Institute of Technology.
Background
Key Figures
Total assets: €730 billion
Number of customers: 80 million
Number of branches: 7,500
Number of full‐time employees: 120,000
(Approximate as of 2020)
BBVA was founded in 1857 and is today one of the largest financial institutions in Spain. In addition, it is the largest financial institution in Mexico and it also has a significant operation in South America and the US. It also owns 49.85% of Turkey's Garanti BBVA.
BBVA's purpose is to bring the age of opportunities to everyone, with six strategic priorities: improving its clients' financial health, helping its clients transition toward a sustainable future, reaching more clients, driving operational excellence, having the best and most engaged team and having a focus on data and technology. Their overarching value is that the customer comes first, ‘we think big and we are one team’. Its responsible banking model aspires to achieve a more inclusive and sustainable society.
The BBVA Group has developed new people management models and new ways of working, which have enabled the bank to keep transforming its operational model, but have also promoted cultural transformation and have favoured the ability to become a purpose‐driven company, or, in other words, a company where staff guide their actions according to the company values and are genuinely inspired and motivated by the same purpose.
Problem
‘It was necessary to stop being a spectator and become a player in the ecosystem.’
Ricardo Forcano, former CIO
In 2009, parallel to the global financial crisis and at a time when the concept of fintech did not even exist, BBVA had a vision that would radically change the course of its strategy: in a few years a structural crisis was going to occur in the traditional banking business model. Predictably, not only would it be necessary to compete with traditional banks, but all kinds of technology companies, from giants like Google to small startups that were going to enter the financial business. In Silicon Valley, some companies were starting to build interesting financial services projects, especially in the world of payments, and BBVA felt the need to be connected with all the innovation that was emerging there. The need went beyond simply thinking about how to compete with these new companies, but was much more structural. How could a bank change the way it works to adapt to the way these companies use technology?
At that time balance sheet investing, CVC (corporate venture capital), e.g. direct investment by large corporations in external startups, already existed in other industries. BBVA began to explore the strategic initiative of setting up a separate venture capital fund to better understand incipient competitors, without losing sight of the fact that the fund also had to function at a financial level in order to be sustainable and to be a relevant player in the startup ecosystem.
In 2011, Ricardo Forcano, in the Madrid offices, and Jay Reinemann, in San Francisco, joined BBVA in order to promote this initiative. One of the first problems they identified was how to best get in touch with the ecosystem and understand how it works. As such, it was decided that it would be best to invest in a couple of funds that were already dedicated to investing in startups and learn from them. Thus BBVA completed its first investments in Silicon Valley in early 2012 with an investment in the seed‐capital fund and incubator 500 startups and the fintech fund Ribbit Capital. In all, 500 startups were founded by investor and entrepreneur Dave McClure, who previously worked with companies such as PayPal, Facebook, LinkedIn, Mint and Microsoft, and Ribbit Capital was a new Silicon Valley‐based venture firm led by serial entrepreneur Meyer Malka.
After this experience, BBVA decided to start investing directly in startups. BBVA completed investments in companies such as SaveUp, FreeMonee and SumUp. SaveUp was a startup that partnered with financial institutions to apply gaming techniques to encourage savings, debt reduction and financial education. FreeMonee developed a consumer gift network for retailers to offer gifts to their consumers through their banks. SumUp is a global technology company and the leading mobile point‐of‐sale (mPOS) company in Europe. Thanks to SumUp's technology, small merchants around the world can accept card payments anywhere