Citi Pours Billions Into Ai Startups Revolutionizing Banking Industry

Citi Ventures Backs AI Startups with Potential to Transform Banking Industry

Citi Ventures has been actively backing AI-powered companies for over a decade and its latest investments demonstrate its commitment to harnessing the power of AI to drive business transformation. The venture arm of Citigroup is taking a proactive approach to investing in startups that can revolutionize the banking industry.

Matt Carbonara, managing director at Citi Ventures, notes that “AI is a horizontal technology that can have a significant impact on various aspects of our business, from coding and compliance to data quality and employee productivity.” One area where Citi Ventures sees significant potential for AI adoption is in its wealth management division, where even a 10% increase in productivity could be meaningful to the bank.

Citi Ventures’ portfolio includes companies such as Glean, Writer, Norm Ai, Poolside, and Galileo, which offer various solutions for knowledge management, content generation, compliance, developer productivity, and model accuracy. The firm’s investments have led to significant growth for its portfolio companies, with two of them being acquired by major players in the industry this year.

The acquisitions of Lexion, a contract workflow management company, by Docusign for $165 million in cash, and Datavolo, which provides data extraction from PDFs and other documents, were facilitated by Snowflake without disclosing terms. These deals demonstrate the significant impact that AI-powered companies can have on the industry.

While most of Citi Ventures’ portfolio companies have integrated AI to some extent, the firm is focusing on native AI applications that offer real revenue potential. According to Sapphire Ventures, there are currently over 47 native AI application companies with revenues exceeding $25 million. The adoption of applied AI is gaining momentum, with pre-built solutions becoming increasingly popular among enterprises.

Enterprises are still learning how to deploy and get the accuracy they want in AI applications. It’s an iterative process, rather than someone coming to you with a pre-baked pie, as Carbonara notes. Citi Ventures’ investments in AI startups demonstrate its commitment to harnessing the power of this technology to drive business transformation.

Google, Samsung, Salesforce, and Intel are among other active corporate venture firms investing in AI-related companies, with Microsoft, Amazon, and Alphabet investing directly in foundation model companies such as OpenAI and Anthropic. The landscape continues to evolve, with new players emerging and existing ones expanding their portfolios.

As the use of AI becomes more widespread, it’s likely that we’ll see even more significant disruptions in industries like banking. With Citi Ventures leading the charge, it will be interesting to see how this technology shapes the future of business.