1Mby1M Virtual Accelerator Investor Forum: With Matt Carbonara of Citi Ventures (Part 2)

Sramana Mitra: There’s a lot of stuff that you said that we can double-click down on. Can you talk us through a case study of a company that you’ve invested that found significant go-to market leverage through the Citi customer base?

Matt Carbonara: There’s a company that we’re invested in called High Radius. They factor and use algorithms to match up payables and receivables for a company and the company’s partners. That’s an area where we’re partnered and selling our product together. 

Sramana Mitra: When Citi is selling an investee company’s product, what are the terms? Is Citi taking a percentage of the sales? How do you structure these relationships?

Matt Carbonara: It’s case-by-case. We don’t get involved in that part. We like to think of ourselves as doing the investment piece. We let the business unit do the business piece. 

Sramana Mitra: Let’s go to the other categories that you talked about where there is a relationship that the company gets to use within the business. Talk about some more examples of different areas where you’re investing where the company has found a path into Citi as a channel, Citi as a customer, Citi as a partner. 

Matt Carbonara: One company is Pindrop. It reduces voice fraud. If somebody is calling into your contact center and is claiming to be John Smith from Nebraska, but they’re really from somewhere else, they can detect that by looking at the quality of the line. They can track where that call is coming from to some extent. That helps reduce fraud for us. Citi became a customer. It’s had savings for Citi on protection of fraud side.

Sramana Mitra: If you play out the value chain, the next question is, has any of your companies exited into Citi?

Matt Carbonara: None have. I will say it will never happen, but that hasn’t been what we’ve done in the past. We’ve seen them acquired by other companies and not necessarily by Citi. We’re happy to provide an overview and landscape of that space and provide that to the business. Historically, I can’t think of any that have been acquired by Citi.

Sramana Mitra: That’s a very interesting data point. We track the industry extensively but we focus on the technology sector. There are certain parts of the technology sector where there are lots of exits into a particular platform through which the company’s go-to market is happening right now.

My forecast is, there’s going to be more of that. Especially if you look at the PaaS area where we have a major coverage right now, there are a lot of companies building on a particular PaaS platform and then getting acquired by the platform vendor. The biggest is Velocity being acquired for $1.3 billion by Salesforce. 

Matt Carbonara: It’s very true. On the technology side, it doesn’t make sense for a customer to necessarily acquire companies. On the go-to market side, it could make more sense. That’s definitely a trend we’ll see more of.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Matt Carbonara of Citi Ventures
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