Goldman Sachs scouting for fintech start-ups

The PSI Group of the bank has a global portfolio of 75 companies, including a dozen investments in the Asia-Pacific

Goldman Sachs, the investment bank, is scouting for financial technology start-ups and is looking at Bengaluru for new picks.

The Principal Strategic Investment Group of the bank has a global portfolio of 75 firms, including a dozen investments in the Asia-Pacific. Two are in India — National Stock Exchange (NSE) and National Commodity & Derivatives Exchange.

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“Indian tech companies are evolving from services to software development and Bengaluru is emerging as a global centre for innovation that is comparable to Silicon Valley of the US,” says Alokik Advani, managing director of the bank's PSI Group.

He heads the Asia-Pacific team of the group from his Hong Kong office and now claims to have brought a new focus to invest in firms from India. “We are scouting for start-ups,” he says. Indian fin-tech start-ups have had big success in  payment systems but these are not so interesting for the bank. “For us, start-ups dealing with data analytics or machine learning could be a big opportunity in India,” says Advani.

New technology for trading platforms, enterprise solutions and data centre management are other interest areas. While fin-tech evolution is at an early stage in India, there are no dedicated fin-tech venture capital funds active here. This gives Advani an opportunity to invest, mentor and commercialise such start-ups, leveraging the global network of Goldman Sachs, he says.

The bank plans to invest i$2-10 million in each such investment, for a minority stake that can at most bring a board seat. It plans to invest for an average of five years. It, however, declined to comment on an exit plan from the NSE investment.