Cogent Bancorp Inc. President Chirag Bhavsar believes banking in the next two decades will look materially different than it does today.
Similar to the way shopping has transformed in the past decade due to e-commerce, Bhavsar said blockchain and other emerging technologies will revolutionize banking. That’s why the Orlando-based bank is investing in startups that have the potential to shake up the financial sector.
For example, Cogent invested alongside Orlando-based DeepWork Capital LLC in Home Lending Pal Inc.’s bridge investment round that was announced earlier this month. Orlando-based Home Lending Pal is building an artificial intelligence and blockchain-powered mortgage advising platform for homebuyers.
Home Lending Pal not only makes the mortgage shopping process easier, but also anonymizes the user’s personal data for much of the process, eliminating lender discrimination based on age, race or sex.
For Cogent, Home Lending Pal was a great fit, said Bhavsar, co-founder of Cogent and co-CEO of CNL Financial Group. “It’s an Orlando-based company. It’s a blockchain-based company. They’re also in the residential mortgage space.”
Of course, Home Lending Pal is not Cogent’s only startup investment. Cogent last year participated in a $3 million fundraising round for New York-based cryptocurrency asset management firm Lucy Labs Inc. The round was led by DeepWork Capital.
These investment deals are more than just opportunities for Cogent to make returns, Bhavsar said. They grant Cogent access to emerging technologies and enable the bank to become a beta tester and early adopter.
Meanwhile, Cogent's team is looking at two other potential investments, Bhavsar added. The company is open to considering a wide range of companies as potential investments as long as their technology can innovate the financial space. Cogent isn’t limiting itself to startups in any particular location or at any particular stage, Bhavsar said.
Further investment in Central Florida companies has the potential to support the creation of new high-wage jobs and the development of products and services that can help other businesses in the region.
In the case of Home Lending Pal, Cogent’s investment sustains the company until it raises a much larger Series A round. Plus, it enables Home Lending Pal to speed up its move from a public beta product to a fully commercial product, co-founder and CEO Bryan Young previously said.
Local startup investment activity was down in the first three months of 2022. Metro Orlando companies collectively raised $42.3 million from seven investment deals in the first quarter, according to an April 13 report from PitchBook and the National Venture Capital Association. That was down from $69.7 million raised in the fourth quarter and $70 million raised in Q1 2021.
However, companies in the region have landed mega fundraising deals in recent weeks. That includes Orlando-based Fortress Information Security LLC’s $125 million investment deal, Maitland-based ThreatLocker Inc.’s $100 million Series C round and Winter Garden-based Anuvia Plant Nutrients Corp.’s $65.5 million Series D round.
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