Harshul Sanghi, Founder & Global Head of Amex Ventures — Reflecting on 10 Years of Investing

Gabriela Ariana Campoverde sits down with Harshul Sanghi, Founder and Global Head of Amex Ventures. Harshul has over thirty years of operating experience, and for the past 10 years has led the venture arm of American Express and oversees global investment activity across the company. To date, Amex Ventures has invested in 80+ companies and has offices in New York, San Francisco, and Boston.

He has led investments in Abra, Better.com, Bill.com, Boom Supersonic, Boxed, Instacart, Learnvest, FalconX, Finix, Next Insurance, Philanthropi, Plaid, RetailNext, Stripe, Toast, and Turo, among others. Amex Ventures now has a portfolio valued at over $1 billion dollars.

In this episode you will hear about:

• The birth of Amex Ventures:

“Amex Ventures is the corporate innovation arm of American Express. We formed it to drive innovation for American Express. That is our mission. The way in which we do it is by investing early stage startups and then driving partnerships to add value to.”

• A reflection on 10 years of investing:

“When you look back at 2011, we were really focused around commerce and next-gen commerce experiences. That’s continuously evolving, but back then we had mobile, we had e-commerce, and we were starting to get into more multi-channel commerce.

And when I look at the early investments that we made in companies at that point in time, we made investments in companies like Stripe, Instacart, Plaid, Bill.com and Big Commerce and many more — all of these have now gone on to become foundational to what is now being called FinTech and is massive as we all know.

So when I look at it over the years, we’ve suddenly morphed and extended our investment areas from consumer commerce to now all things, B2B, B2C payments, the entire FinTech stack, and certainly a lot of enterprise capabilities, which include big data, AI, security, and fraud detection.”

• What differentiates them from other corporate VCs:

“When you think about your venture capital versus corporate venture capital, I think we’re certainly focused on adding value to the portfolio company and of course, to our business units, to the realization of a partnership. So our work and our differentiating factor is the value add that we bring. I mean, in today’s world, it’s very competitive in the venture industry, as you know, and I think you have to have that differentiation.

We’ve clearly just shown. We just don’t talk about it. We have enough proof points of that differentiation, and that’s resonated with entrepreneurs, which has resulted in us having a good portfolio and great deals. So when you think about competing with other corporates, I think what differentiates us is certainly what differentiates Amex.

We are unique in the sense that, you know, we have an end-to-end platform and a closed network. So we have an issuing platform, we have the network payments that work, and we also have our merchant acquiring business. We also serve both consumers and businesses. When you look at all of that, we’re able to partner with a startup, bring that innovation and plug it into our business and affect that in a much shorter timeframe than I believe some of our competitors will — just because we have all of that within our control and our ecosystem.”

• Investment-worthy trends in the payments space:

“ I think what we’re seeing is this whole trend of micro segmentation. I’m a pet owner. As a pet owner, I think I have sort of needs and now that’s a segment and it’s not everybody, so there is a market for that. I think you can create differentiated products. If you look at all of 2000 to 2010, you see what happened in the mobile space, broadly speaking and now we can say there’s an app for everything, right?

You go on your phone, and you find one. I think the same thing is now going to hold true in the financial systems space, where there’s going to be an app for everything, right? And an app for everyone. I think that we are just beginning to tap into that.

I do think that when I go to India, and I spend time over there, and I look at the different folks and the needs over there, there’s just so much potential. There’s already a lot that’s been done, which is really exciting, but there’s just so much more that I see coming up and I see folks who are working on it and that’s really what’s most exciting.

I think that is going to drive again, the big theme of equalization or reduced inequalities across the globe.

• How Harshul became interested in investing:

I’d say more than 30 years in technology from my early career was in Silicon valley in semiconductors in Silicon labs. Silicon Valley is named after that.

So kind of interesting, and I’ve done many different industries and the common theme when you look back and connect the dots — when I look back and do that — is that for every single job from my very first one to what I’m doing today, the constant theme has been innovation.

What that has been is, you know, taking sort of a nebulous early sensation of ideas and then developing them into businesses and full-fledged businesses. I’ve done that individually. I’ve done that with single product or what have you, at Phillips, but how do you do it at scale?

And I think that is what venture capital and venture investing allows you to do, where you can have a portfolio of companies that you can add value to, right? And you can help grow and help succeed. So it was the culmination of all of my experiences. The other thing that I really strongly believe in is that you’ve got to provide an unfair advantage to these companies.

I think the unfair advantage that large enterprises have is distribution, access and scale, right — and of course, brand. That is massive in the day when trust is paramount. That again is why corporate venture is where I’ve decided to focus my career is because you can bring these small ideas, partner them up with the benefits of a large corporate and then help amplify them and help impact adoption and distribution of these.

Right? So, venture investing in corporate venture, in particular, was a natural for me, having been an entrepreneur and intrapreneur.

• And much more!

About Harshul Sanghi

Harshul Sanghi founded Amex Ventures in 2011 to accelerate the digital transformation of American Express by investing in and partnering with innovative start-up companies. Prior to joining Amex, Harshul was Managing Director of Motorola Mobility Ventures and has over 30 years of operating experience.

About Amex Ventures

Amex Ventures invests in and partners with start-ups to accelerate innovation for consumers and businesses. For additional information on Amex Ventures, please visit www.americanexpress.com/us/business/american-express-ventures

For more FinTech insights, follow us below:

Medium: medium.com/wharton-fintech

WFT Twitter: twitter.com/whartonfintech

Gabriela’s Twitter: twitter.com/byGabyC

Gabriela’s LinkedIn: linkedin.com/in/gcampoverde