This is the first article we have seen where some VCs were complaining about the entry of Corporate Venture Capital into the early stage investment market. Their data shows that 80% of the VC deal volume flowing into generative AI companies was tied to CVCs.
The article quotes some VCs who see this as a detriment to the market. Pitchbook did not give any data specifically for WealthTech in this article, but anecdotally, we are seeing CVCs and strategic investors being more aggressive in WealthTech.
In our opinion, this is a healthy development for WealthTech as strategic investors know and live the pain points in our industry and are perhaps better able to spot solutions that work. In addition, they can be potentially large consumers of a startup's product, which can accelerate growth, both of the owners of the startup and the strategic's investment. We consinue to encourage all larger financial services firms to consider starting a Corporate Venture Capital arm.