American Express is the latest big corporation to jump into the venture capital pool, following recent initiatives by Microsoft, Visa and Google. The financial services giant now has plans to launch a $100 million fund called Enterprise Growth Group that will invest in early-stage digital commerce companies.
With the rise of mobile payment innovations like Square, which scans credit and debit cards and accepts payments right through a mobile phone, AmEx is hoping to capitalize on change in the payment landscape. "We recognize the need to work with emerging technology companies to inspire change, encourage innovation, and ultimately deliver the best products and services to our customers," AmEx Enterprise Growth Group President Dan Schulman said in a statement
The company recently established a presence in Silicon Valley, where the venture arm will be based out of. Harshul Sanghi will oversee and direct all venture operations as managing partner of Enterprise Growth Group. Sanghi previously ran Motorola Mobility Ventures.
The fund will reportedly, initially seek out projects and companies through personal contacts and word of mouth around the venture community and has no current plans to buy the companies it chooses to invest in. The primary focus will be identifying startups and innovations that can potentially benefit AmEx's loyalty and rewards programs, mobile payments, fee-based services, fraud detection and data analysis.
"The payments industry is undergoing a fundamental change as the very nature of commerce is redefined," Sanghi said in a statement.