The Chicago Mercantile Exchange has gone public about the launch of a new venture capital fund to invest in promising technology start-ups.
The new Liquidity Ventures arm of the giant Exchange operator launched quietly last year under the stewardship of business development MD Mark Fields.
In a post
on the company's OpenMarkets Website, Fields' explains the rationale behind the move: "The idea is to harness the power of entrepreneurship and the rapid pace of technological advancement to grow our industry and our business. The goal of our fund is to supplement the traditional route of buying the product of an established company by taking stakes to ensure the success of ones that have the potential for future large-scale impact."
According to Crain's
, the fund made its first investment in March in a data encryption service company it won't name. A second investment, in Vancouver, British Columbia-based quantum processor software company 1QB Information Technologies Inc., is pending.
The CME is not providing details on the size of the fund, but it is likely to be substantial, with the company looking to invest between $500,000 and $5 million in each new venture.
The Exchange operator is following the lead taken by top banks such as BBVA and Sberbank, which have created their own corporate venture capital arms to take stakes in and provide mentoring to fresh, new digital start-ups.
Says Fields: "Technological innovation has never been more important in the financial services industry. By investing in ideas and innovation outside the walls of the firm, (we're) not just interested in acquiring technology, but in seeing that technology succeed in the biggest way possible.
"That means introducing technology to entire industries, advising young companies on practical applications, and providing valuable resources. And importantly for all those tech startups, it means another place to look when they're seeking that all-important early round capital."