Huntington Bancshares Inc. has invested some $100 million over four years into venture capital funds and financial technology startups in an innovation push that could grow to $250 million, CFO Zach Wasserman said.
The Columbus super-regional bank also hired a Silicon Valley Bank veteran to lead its Corporate Ventures division, which seeks to help both internal Huntington business lines and banking clients in industries such as healthcare.
"It all comes back to our vision as a company – it's an aspirational one, but it's a vision we believe in deeply: to come the leading people-first, digitally powered bank," Wasserman told Columbus Inno.
"Ventures is a tool we can use to help our businesses stay abreast of what’s going on and ultimately drive real revenue growth."
Most recently Huntington (Nasdaq: HBAN) invested $4.8 million in Tampa, Florida, healthcare payment startup Veuu, a machine learning platform to help make hospital reimbursement from insurers faster and more predictable.
"The initial reception from the client base has been phenomenal," Wasserman said.
In June it invested $3 million in Minneapolis VC firm Brown Venture Group, which focuses on Black-, Latino- and Indigenous-owned tech startups.
Last year Huntington acquired a consumer payments startup based in San Francisco and rebranded Digital Payments Torana Inc. as Huntington ChoicePay. It's also invested in subscription software for wealth management and co-developing new products that clients can use.
A decade ago Huntington was the first institutional investor in Columbus-based Drive Capital LLC, which has grown to the Midwest's largest active venture capital firm with some $2.2 billion under management. It's also a backer of Columbus-based Rev1 Ventures, which invests in and advises early-stage startups in the region.
The bank created Corporate Ventures in 2019, and is now a limited partner in six VC firms, including ones in Silicon Valley and New York City, Wasserman said.
"We meet with these VCs regularly to understand what's going on in the environment," he said.
Igor Cerc started Sept. 1 as head of Corporate Ventures. He has three decades' experience in financial services, the last 10 years as head of corporate strategy and innovation for Silicon Valley Bank, according to his LinkedIn profile.
SVB collapsed in March and has been acquired by a North Carolina bank. Cerc was not on the deposits side of the business, Wasserman said, but its highly regarded strategic advising that was "close to the venture economy."
"He is known as a great leader and a perfect fit for our culture," Wasserman said.
The previous leader, Mike Jones, retired in the spring. He had joined Huntington in 2021 with the acquisition of TCF Bank, where he was president and COO.
Rather than a distinct VC pool like those formed by other large Central Ohio corporations, Huntington is treating venture as an asset class within its overall long-term investments. The bank does not intend for individual startup investments to comprise a major portion of that.
Overall Huntington National Bank has $189 billion in assets and an 11-state footprint.
Sometimes the most innovative solution requires people instead of tech, Wasserman said, such as the early 2022 acquisition of Boston-based Capstone Partners.
Huntington had been losing middle-market clients when the owners sold to private equity or other buyers, he said, so it added the firm that specializes in mergers and acquisitions for the middle market. Now it can make investment banking income on those deals.
"We have a pretty high bar for who we work with," Wasserman said. "We make investments into companies with whom we have a partnership or expect soon to have a partnership."
Deposits and loans are essentially commodities, he said, so a bank differentiates itself on customer relationships, expertise and advice.
"Our customers trust us deeply," Wasserman said. "We are the heart of their financial world. We know their businesses really well; the question is what other services can we provide them?"
