The top 25: Jaidev Shergill, Capital One Growth Ventures
Three years ago, US-based financial services firm Capital One set up a corporate venturing subsidiary to make early-stage investments in financial technology companies.
Jaidev Shergill, then Capital One’s head of digital products now managing partner of Capital One Growth Ventures, was to lead the unit.
In a speech at the Global Corporate Venturing & Innovation (GCVI) Summit this year he took an in-depth look at investment strategy and his unit’s evolution. Capital One now has 10 team members, including five investments professionals. “We started in a very scrappy manner,” said Shergill. “At the two-year mark, we had a good investment process, and so we started looking at the strategic traction our investments could bring.”
Capital One currently evaluates companies with three metrics – 40% is based on investor relationship value, 40% on vendor relationship impact; and 20% on learning and culture impact. These evaluations are repeated throughout the investment period, according to Shergill.
He added: “Using these metrics enables us to put the lens of strategic impact pre-investment and opens up the possibilities of seeing how portfolio companies evolve over time. It enables us to figure out the direction we want to go into from an investment perspective. It also helps us in our reporting to the investment committee, which in turn is more involved and able to see where we are in our journey, and can provide a more targeted help on specific issues.”
He said by last year the unit had made more than 15 investments across multiple stages in a variety of sectors, including data, security, blockchain, and enterprise technology.
These deals included leading its first seed investment in Cerebro, a data access company, and bringing in several leading institutional venture capital firms as co-investors, making a follow-on investment in next-gen malware detection provider Cylance, and participating alongside a consortium of banks in a series E investment in Transactis, an electronic bill payment company.
Shergill said: “In addition to our investments, we have innovated on the structure and process of corporate venturing. We have optimised our decision-making process, giving the investment team autonomy on certain transactions, while preserving an investment committee structure for larger deals. We have streamlined our diligence process, enabling us to close deals in as little as two weeks. And we’ve worked closely with our risk and regulatory stewards to ensure proper governance, risk mitigation, and succession planning.
“Our connectivity inside the organisation is also showing strength and several business areas and technology groups routinely collaborate with us to help identify and assess new technologies. In the most recent quarter, our efforts have been recognised both internally and externally, and we have seen our inbound and referred deals increase significantly leading to several new investments.”
Capital One previously invested in startups through North Hill Ventures, the venture capital firm with which it was affiliated until North Hill was spun off in 2012. It also operated Capital One Labs, a San Francisco-based research subsidiary that operates as a startup laboratory, while Lauren Connolley, venture partner, manages Capital One’s partnership with Plug and Play, one of the largest incubators in Silicon Valley.
Shergill also oversaw digital venture investing and startup business development for Capital One from 2012, and was previously president of Citi Ventures, the corporate venturing arm of financial services firm Citigroup, from 2007 to 2009, when he left to found and run Bundle, a big data consumer-facing digital startup.
Similar to his Capital One experience, Shergill worked at Citi for a number of years – from 2004 in this case – before creating its venture unit.
Previously, he worked in the US and UK across a swathe of top-tier financial services firms, including Credit Suisse, Lansdowne Capital and Deloitte, after gaining an MBA at Insead and an engineering degree at Northwestern University.