Venture Capital – IFP: a joint venture with global ambitions

The financial services industry is particularly vulnerable to the disruptive impact of the Internet, while the number of venture firms specifically targeting the financial services sector is relatively small. Internet Finance Partners (IFP), a joint venture between Schroders, 2bridge and Oliver, Wyman & Company, has been formed to exploit opportunities in this comparatively under-venture-financed segment of the market, which IFP nevertheless estimates to be worth more than $1 trillion globally in the next few years’.

Founded in autumn 1999 but not formally launched until the end of the first quarter this year, IFP describes its mission as to partner with, and build, innovative financial services e-businesses by providing highly targeted capital, expert advice and execution assistance – particularly to those seeking to launch business-to-business Internet enterprises’.

IFP’s founding partners combine the skills to cover the relevant bases for e-financial services ventures. Schroders, the majority shareholder in the joint venture, is one of the world’s leading financial services firms, with a global franchise and more than $200 billion of assets under management. Its strategic partner 2Bridge, as a provider of eHub platforms for business-to-business communications, commerce and exchange, provides the infrastructural component of the equation. Oliver, Wyman & Company, is the leading global strategy consultancy focusing exclusively on the financial services sector and, through its dedicated e-commerce practice, has already advised on the launch of a number of start-ups including business-to-business portal and MarketXT, an after-hours e-trading network.

Resources offered by IFP will include, capital, strategic business model development, technological and infrastructural support, access to an extensive network of industry connections and later-stage financing on advantageous’ terms, as well as some of the less differentiated incubator services such as office space and recruitment, marketing, accounting and legal services.

The joint venture has created two programmes tailored for companies at differing levels of development: FinanceLab, an incubator to take concepts to the stage where they have a validated business model, business plan and execution strategy; and FinanceSpeed, an accelerator to help start-ups and established Internet ventures to scale their companies on a global basis.

IFP will provide as much as $6 million (e6.5 million) to its hatchlings across both stages of the programme and thereafter can continue to provide strategic advice, corporate finance services and technological support to companies to the IPO stage and beyond. In the Internet space at present, speed is all and IFP hopes, through the Lab-Speed process, to help launch new businesses within a three-month timeframe.

The IFP management team is headed by chairman Sharon Haugh, who is chairman of Schroders Investment Management North America and a member of the Schroders Asset Management Executive Committee. Its CEO is Nancy Curtin, who was previously managing director and head of investments for Schroders’ Global Mutual Fund business. Mike Harding, who formerly led Oliver, Wyman &

Company’s European e-commerce practice, heads the FinanceLab programme. His counterpart at FinanceSpeed is Akbar Ayaz, vice president of client technology services at 2Bridge.

At the time of its formal launch, IFP was already working with four companies, including Lava Trading. Lava, which received GBP3 million in backing from IFP, develops real-time liquidity browsers that locate best prices and enable smart order routing across traditional market makers and exchanges. Its products aim to create what will, effectively, be a global central order book with the potential to save international trading organisations a substantial margin of their current costs.