American Express wants to have a stake in the next big digital commerce startup, and it’s establishing a new $100 million fund to make sure it doesn’t miss out. The fund will be spread out over multiple years and will focus on early-stage startups that can create innovative ideas that will ultimately benefit AmEx and aid in its digital transformation.
The company is looking at all kinds of companies offering everything from mobile and online payments and location-based offers to loyalty and rewards programs, security and analytics. American Express will look to take a minority stake in these companies and create partnerships with them that will ultimately help bring new technology to the company’s audience of more than 90 million customers worldwide. Portfolio companies will be able to leverage not only American Express’ customers but also its employees, customer service and data analytics.
The fund will be run out of American Express’ new Palo Alto, Calif. office by Harshul Sanghi, who previously ran Motorola Mobility Ventures and is now managing partner for the Enterprise Growth Group at American Express. Sanghi will also focus on building the brand for Serve, American Express’ digital wallet product.
It’s another sign that American Express is anxious to keep evolving. It’s been investing in startups like PayFone and it’s been innovating in the offers market with partnerships with FourSquare, Facebook and SCVNGR. As I wrote earlier, it’s got a good shot to be a major player in the local deals market because of its direct relationship with merchants, its valuable data, its experience in building loyalty programs and its sales force.
For a 162-year-old company, AmEx is showing its got some ideas on how to stay fresh. But it understands that it can’t come up with all the innovation itself so this is a good tool to ensure it stays close to really promising startups, especially ones out of Silicon Valley.
Image courtesy of Flickr user The.Comedian.