A fund that targets up-and-coming technology companies has invested almost $40 million of the $200 million it has collected from a slew of financial institutions.
Since April, San Francisco-based Financial Technology Ventures has assembled a portfolio of nine technology companies that focus on financial services. Its mandate is to invest in fledgling companies that may prove to be useful suppliers to the fund's participants, which include half of the top 20 banks in the United States.
"In the past we hesitated to invest, because the market wasn't moving quickly enough" to adopt home banking technology, said Scott Wu, general manager of the fund. "But we've seen an acceleration recently."
Financial Technology Ventures has twice put money into Financial Engines Inc. of Palo Alto, Calif., which produces on-line investment forecasting and advice based on the work of its chairman, William F. Sharpe, a Nobel Prize winner in economics.
The fund has also taken a stake in Corillian Corp. of Beaverton, Ore., a provider of on-line banking software. FT Ventures concluded after extensive research that Corillian's products are the best in this market, Mr. Wu said. He also praised Corillian's management team, which includes chairman and chief executive Ted Spooner, who formerly worked at Checkfree Holdings Corp.
Another beneficiary of the fund's capital is 724 Solutions Inc., a Toronto producer of software that enables banks and brokerages to provide services to consumers over wireless devices such as mobile phones and handheld computers. Founded in 1997, 724 is working with Bank of Montreal and Bank of America Corp., an FT Ventures investor.
In electronic bill delivery and payment, FT Ventures has invested in BlueGill Technologies Inc. The Ann Arbor, Mich., company produces software that helps banks and other companies format electronic bills.
At least two FT Ventures investors -- U.S. Bancorp and Bank One Corp. -- have installed the BlueGill software. U.S. Bancorp uses it to deliver bills to its retail customers. Bank One, through an agreement with Electronic Data Systems Corp., has integrated Blue Gill's software into its own treasury management services so it can offer electronic billing services to its commercial customers.
FT Ventures has also invested in Cybersafe Corp., which provides security technology to companies; Avesta Technologies Inc., a company that makes troubleshooting software for computer networks; Valicert Inc., a producer of digital certificate validation software; ServiceSoft Technologies of Natick, Mass., which provides customer service technology to companies; and eCredit.com Inc. of Westwood, Mass., which has created an Internet credit and financing network.
The U.S. banks with the largest stakes in the fund include Bank of America, National City Corp. in Cleveland, U.S. Bancorp, and Wells Fargo & Co. Overseas institutions with large stakes are Banque Nationale de Paris, Credit Suisse Group, and Deutsche Bank. A handful of nonbank financial companies are also investors.