San Francisco Fintech Entrepreneur Becomes Venture Capitalist

San Francisco serial entrepreneur Ryan Gilbert has joined San Francisco-based Propel Venture Partners, which received $250 million from Spanish banking giant BBVA to invest in fintech.

BBVA’s investment in Propel’s funds includes the bank’s original $100 million investment that established BBVA Ventures in 2013. BBVA (NYSE: BBVA) is shutting down its corporate-venture arm as part of the move.

Gilbert told the San Francisco Business Times Thursday that he takes issue with the idea of fintech entrepreneurs as “disrupters,” given the valuable role existing financial systems and infrastructure continues to play in financial services. Instead, he sees an opportunity for innovative technology to transform financial services.

In addition to Gilbert, Propel’s other managing partners are Jay Reinemann and Tom Whiteaker.

Reinemann and Whiteaker previously managed BBVA Ventures.

BBVA’s venture investing has already achieved an impressive track record in picking winners in the hot fintech sector.

The bank’s venture portfolio includes stakes in San Francisco-based Prosper Marketplace, Redwood City-based Personal Capital and fast-growing Taulia, a San Francisco online corporate payments platform that facilitates supplier financing for vendors.

“Taulia is a great example of a company that’s saving corporations lots of money by changing how they deal with their accounts payable and accounts receivables,” Gilbert said.

(Taulia CEO Cedric Bru was featured last year in a San Francisco Business Times Executive Profile.)

Other BBVA portfolio companies are San Francisco lender Earnest and San Francisco-based Docusign.

“BBVA’s success in picking winners is the result of the bank not taking a ‘spray and pray approach,’ ” Gilbert said.

Gilbert, who was CEO of San Francisco-based Better Finance, will become executive chairman of that startup, which helps banks make SBA-backed loans more effectively. Better Finance was the Bay Area’s fastest-growing private company last year, based on 3,000 percent revenue growth between 2012 and 2014, according to San Francisco Business Times research.

Gilbert says Better Finance continues to enjoy rapid growth. Better Finance’s SmartBiz service will be led by President Evan Singer, who was previously general manager of SmartBiz.

Prior to founding Better Finance, Gilbert established PropertyBridge to facilitate electronic rent payments. The Oakland-based startup was acquired by Moneygram in 2007.

Gilbert said he will continue to serve on the board of Sacramento-based River City Bank (NASDAQ: RCBC), which he says offers him a valuable perspective on the challenges facing bankers.

Propel plans to open a London office to take advantage of fintech opportunities in Europe. The firm is still hiring for that office.

“In an increasingly competitive fintech venture capital environment, we believe that our increased capital, Propel’s independence and a presence in London can enable us to invest in the best fintech start-ups and better support BBVA’s vision of using technology to change financial services for the benefit of the customer,” said Teppo Paavola, BBVA’s chief development officer and general manager of new digital business.

Source: San Francisco Business Times,
Photo: Ryan Gilbert, former CEO of San Francisco-based startup Better Finance, joined Propel Venture Partners to invest in fintech opportunities. The new firm has received $250 million in backing from Spanish banking giant BBVA. (Todd Johnson, San Francisco Business Times)