Elevator Ventures — Becoming the leading Corporate Venture Capital growth partner for fintechs in CEE
As our first post on our new blog, we want to give you an introduction to Elevator Ventures, our origin story, investment focus and the team behind. We want to introduce ourselves by highlighting our drivers, goals, intentions and where we are coming from corresponding to our vision:
“Leveraging the power of RBI Group, we are the leading Corporate Venture Capital growth partner for fintechs in CEE.”
Leveraging the power of RBI Group
As the Corporate Venture Capital (CVC) arm of Raiffeisen Bank International (RBI) we were incorporated after several years of successful fintech partnerships from the Elevator Lab program throughout RBI Group. The positive implications from a cooperation with fintechs result in a win-win situation for both RBI and the startups. For several years, Raiffeisen Bank International proves the value of cooperation (e.g. in eKYC, digital currency and customer experience) and has set the right initiatives to enable the group-wide application of these new fintech solutions (e.g. see RBI’s API Marketplace, RBI’s Blockchain Hub and MyRaiffeisen). This experience lays the ground for Elevator Ventures’ activities.
The idea of establishing a Venture Capital arm was driven by RBI’s mission of “transforming continuous innovation into superior customer experience”. The investment into alumni from Elevator Lab came naturally with the proof of their solutions during pilot projects and the continued co-development and mutual market expansion. In addition, RBI’s top management sees the opportunity to invest into startups which do not fit RBI’s structures and processes today, but whose business models might be changing the industry dynamics in the mid- to long-term.
RBI’s Group CEO, Johann Strobl, describes Elevator Ventures as “an integral part of our long-term innovation strategy at Raiffeisen Bank International”. We connect RBI to a network of thought leaders in the industry and engage with teams working on technologies and business models potentially relevant for RBI’s core business within the next five years.
Our vision starts with the reference to the power of RBI, as it supports our daily work in many ways and provides us with an edge over many other Venture Capital (VC) investors in the CEE region. The strong network of RBI and its subsidiary banks in 14 countries allows for an early access to fintech high performers. Key advantages we can offer to our portfolio companies are:
- The strong connections of RBI’s subsidiary banks in their markets (over 16mn retail banking customers)
- An international network of corporates, sales channel partners and investors (over 100k corporate clients) and representative offices around the globe
- The expertise of colleagues in all banking areas and a unique know-how about market specifics, customer demands and regulation in CEE markets
- Access to infrastructure for further expansion
Elevator Ventures in its organizational set-up and governance resembles an industry-standard VC fund with the exemption of having only one Limited Partner. In addition to the above-mentioned drivers of our activities, it is Elevator Ventures’ main goal to earn a financial return for its investor RBI. The team is supported by an Investment Committee consisting of four industry experts from RBI’s top management.
Over the last months, Elevator Ventures has built up a strong and diverse team of enthusiastic individuals thinking about the future of banking and fintech. To achieve our goals, it is very important to understand both the banking system and organization as well as the startup world. We come from four different nationalities and have a broad background of experiences ranging from working with startups to consulting in the finance & banking sector.
Growth partner for fintechs
We focus on early and growth stage startups in the fintech sector that have a specific CEE connection, either with the companies being founded in CEE (early-stage) or wanting to grow in the CEE markets (growth stage). Furthermore, we highly value product-market fit, first traction in terms of paying customers and potential synergies with RBI’s network.
We understand the term fintech quite broadly. We have done investments not only in a lending platform but also in a RegTech, a customer experience enterprise solution and lately in two companies from the AgriTech sector. AgriTech is the first sector which showed us the potential of Embedded Finance integrating banking functionality in other industries and value chains. Furthermore, we see a lot of dynamic stemming from the trend of Open Banking which enables new business models for fintechs especially in combination with Artificial Intelligence. Many companies are creating new business models facilitated by blockchain, for example the tokenization of assets. We will continue posting our thoughts around these themes in this blog.
In Central and Eastern Europe
We believe in the maturing CEE tech ecosystem. Central and Eastern Europe has become Europe’s fastest emerging startup ecosystem with amazing talent and founders, but the region still lacks the attention and funding resources of other more mature regions such as Western Europe and North America.
In his article on the CEE Fintech Atlas, Gunter Deuber from Raiffeisen Research describes the market potential for fintechs in CEE. He projects the number of digitally active customers in the CEE region to continue to rise by 5 percentage points in the years ahead, and top 80 per cent in a few years’ time, pushing the number of digitally active customers to a level of roughly 250mn customers. The willingness of customers to only engage digitally has increased radically, while large parts of the economy have been brought online. RBI reported industry proof for this shift in customer behavior as RBI’s mobile banking users showed a double digit growth across all markets in the first half of 2020.
When it comes to founding and investing activities into fintechs, the CEE Fintech Atlas 2019 showed that the majority of the local fintechs operate on the Russian and Polish markets, making up for half of all locally active fintechs in CEE. Significant increases in the number of active fintechs can be observed in Bulgaria, Hungary and Ukraine. However, as a recent study of Invest Europe has shown, CEE represents only 3.2 per cent of the total European venture capital investment value in 2019 while the region accounted for 7.9 per cent of the European companies receiving venture capital funding.
On the positive side, we see more corporate venture capital investment flowing into CEE. Corporate investors constituted 20 per cent of total funds raised in 2019, up from 4 per cent in 2018. We believe that corporates play an important role in financing the growth phase of fintech development, especially in diverse and fragmented areas such as CEE. Elevator Ventures and Raiffeisen Bank International will do their part in promoting innovation in the region.
Maximilian Schausberger (Managing Director of Elevator Ventures)
Elevator Ventures is the Corporate Venture Capital entity of Raiffeisen Bank International (RBI). Its primary focus is on early stage and growth investments in fintechs and related enabling technologies in Central and Eastern Europe.