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American Express Ventures is doubling down on Web3

February 28, 2022, 4:13 PM UTC

While you shouldn’t expect to use an American Express crypto credit card any time soon, Amex plans to double down on its investments in blockchain-related startups.

With Harshul Sanghi retiring at the end of March after building Amex Ventures for more than a decade, the incoming head says that Web3—short for the next generation of the internet built on blockchain—will be a core area of focus for the $1.3 billion corporate fund.

“I see a lot of hunting ground there,” Matt Sueoka, Amex Ventures’ new captain, tells me. He refers to Web3 as a “once-in-a-generation opportunity for a potential resetting of infrastructure.” The amount of capital, paired with the engineer talent operating in the space, is a perfect marriage for new products and services that weren’t possible before, he says.

“For a company like Amex, I find it particularly interesting, because we have an existing payment network that processes over a trillion dollars per year… We have a lot of distribution and scale. And we know how to operate globally and how to handle regulations globally in that environment. And we’ve spent many years building a trusted brand as well,” Sueoka says.

American Express utilizes its venture capital arm to pilot new technologies and source partnerships that can drive the financial services giant into its next phase of innovation. Executives have said the broader organization is keeping an eye on the crypto investments American Express Ventures has already made, which include crypto brokerage Abra and trading platform FalconX. “We’ve got investments in blockchain companies to constantly look at [it] and figure out if there are use cases for us,” CFO Jeff Campbell said on the last earnings call.

While American Express may not see much opportunity at this point in time for crypto as a form of currency (Campbell said on that same call that “we view cryptocurrency more as an asset class” and that a crypto-linked card won’t be coming anytime soon), there’s plenty of interest in Web3. Sueoka hinted that there may be a place for Amex to operate in the digital wallet space, although he wouldn’t specify exactly what that looked like or whether Amex plans to launch its own.

“I think trust and security in this space—of either holding digital assets or using them for payments or using them for financial services—will continue to be a major issue and pain point,” Sueoka tells me. “There are a bunch of startups that have created accounts and wallets and things like that. I’m not saying we’re going to compete with them or that we’re building any of those things necessarily, but I do feel like the average consumer doesn’t necessarily know what those brands are.”

And American Express will likely continue to innovate within the NFT—nor non-fungible token—realm. Sueoka says that NFTs could enhance events or experiences the company is involved in—which include the U.S. Open and Coachella. Last year, the company hosted a digital concert with SZA and sold more than a dozen NFTs to go along with the event.  “That’s really just the tip of the iceberg. There’s so much more that could be done,” Sueoka says.

Sueoka wouldn’t get any more specific with me, but notes that “there are a lot of ideas and things in the pipeline.” 

You can read more about the next iteration of Amex Ventures here.

Cutting ties… Companies are withdrawing their business and investment with Russia after the country’s invasion of Ukraine last week. BP said yesterday that its CEO would resign from the board of Russian energy company Rosneft and that it would drop its 19.75% stake in the company—which could ultimately cost it $25 billion. Equinor, a Norwegian energy company, said this morning it would stop making investments into its Russian business and that it would begin to divest its joint ventures in the region. I would expect to hear more of the same announcements in the next few days.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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VENTURE DEALS

- Weee!, a Fremont, Calif.-based online supermarket, raised $425 million in late-stage funding led by SoftBank Vision Fund 2 and was joined by investors including Greyhound Capital and others. 

Palmetto, a Charleston, S.C.-based clean energy marketplace and technology services platform, raised $375 million in funding led by Social Capital and was joined by investors including ArcTern Ventures, Gaingels, Lerer Hippeau, and MacKinnon, Bennett & Co.

- soona, a Denver, Colo.-based virtual content creation platform for e-commerce, raised $35 million in Series B funding led by Bain Capital Ventures and was joined by previous investors including Union Square Ventures, Matchstick Ventures, Starting Line Ventures, 2048 Ventures, and Range Ventures

- Radian Aerospace, a Renton, Wash.-based company focusing on space launch capabilities, raised $27.5 million in seed funding led by Fine Structure Ventures and was joined by investors including Ultratech Capital Partners, Helios Capital, The Private Shares Fund, Explorer 1 Fund, Evolution VC Partners, SpaceFund, Gaingels, The Venture Collective, Alumni Ventures Group, EXOR Seeds, Type One Ventures, Sand Hill Angels.

- Scope Security, a New York-based security platform for health systems, raised $20 million in Series A funding led by Thrive Capital and was joined by investors including SV Angel, Martin Ventures, Sound Ventures, Crossbeam, and Free Solo.

- ArDrive, a Clifton, N.J.-based permanent storage application, raised $17.2 million in seed funding led by Arweave, Blockchain Capital, and Sino Global Capital and was joined by investors including Long Hash Ventures, Foresight Ventures, SevenXVentures, Hypersphere Ventures, Momentum 6, OFR Fund, ArkStream Capital, DRF, Cipholio Ventures, and Viewblock (Compute Ventures). 

- Siteline, a San Francisco-based billing solution for commercial trade contractors, raised $15 million in Series A funding led by Menlo Ventures and was joined by existing investors. 

- ​​Flashfood, a Toronto-based mobile marketplace providing customers access to discounted food nearing its best-by date, raised $12.3 million in Series A funding led by S2G Ventures and was joined by investors including ArcTern Ventures, General Catalyst, Food Retail Ventures, Rob Gierkink, and Alex Moorhead, co-founder and executive chairman at RHI Group.

- HerMD, a Cincinnati, Ohio-based female-focused health care company, raised $10 million in Series A funding led by Jazz Venture Partners

Overview, a San Francisco-based manufacturing automation company, raised $10 million in Series A funding led by Blumberg Capital and was joined by investors including GV, Momenta, and Bain Capital.

- Quantum Brilliance, an Acton, Australia-based developer of room-temperature quantum accelerators, raised $10 million in seed funding from investors including Ultratech Capital Partners, Main Sequence Ventures, CP Ventures, Investible, Jelix Ventures, Moelis Australia, and R3I Ventures.

- Yoshi, a Nashville, Tenn.-based on-demand vehicle refueling service provider, raised $10 million in funding led by Bridgestone Americas.

- Catalog, a Hyderabad, India-based decentralized exchange that will enable users to swap fungible and non-fungible assets, raised $7.5 million in seed funding from investors including Amber Group, Multicoin Capital, Alameda Research, and others.

- Ex Parte, a Bethesda, Md.-based legal tech saas startup using A.I. to predict and litigation outcomes, raised $7.5 million in Series A funding led by R8 Capital.

- Calven, a Sydney, Australian-based hybrid work SaaS startup, raised AUD $6.8 million ($4.92 million) in seed funding led by AirTree Ventures and was joined by investors including Canva and the Gonski Family Office

- Cococart, a Hong San Walk, Singapore-based platform allowing merchants to accept online orders, raised $4.2M in funding. Forerunner and Sequoia led the round and were joined by investors including Y Combinator, Uncommon Capital, Soma Capital, Liquid 2 Ventures, Fitbit CEO James Park, and Curated CEO Eduardo Vivas

- Cognitive Space, a Houston, Texas-based A.I. and blockchain-based company focused on orchestrating satellite constellations, raised $4 million in seed funding led by Grit Ventures and was joined by investors including Ultratech Capital Partners, Cultivation Capital, Glasswing Ventures, Gutbrain Ventures, PBJ Capital, SpaceFund, Deep Ventures, Argon Ventures and Techstars.

- HearHere, a Santa Barbara, Calif.-based storytelling app, raised $3.2 million in seed funding led by Camping World and was joined by investors including Pasadena Angels, Seraph Group, and others. 

- Nosso, a London-based fintech helping parents invest and plan for their children's financial futures, raised $2.8m in funding led by Octopus Ventures and Anthemis and was joined by investors including Entrepreneur First, Ventures Together, Errol Damelin, Tracy Doree, and Peter Hetherington.

- Gesund.ai, a San Francisco-based health care platform for clinical-grade A.I., raised $2 million in seed funding led by 500 Global.

- Kahilla, a Ketchum, Idaho-based digital communications platform, raised $2 million in funding co-led by Bread and Butter Ventures and Matchstick Ventures

- Ion Channel, a Washington, DC-based supply chain software and ecosystem security company, raised $1.5 million in seed funding led by Ultratech Capital Partners and was joined by investors including Roundtable.

- Nebula Space Enterprise, a San Diego, Calif.-based space-based data management and processing company, raised $1.25 million in seed funding co-led by Ultratech Capital Partners and SpaceFund.

PRIVATE EQUITY

- The Rise Fund acquired Blue Cloud Pediatric Surgery Centers, a Glen Rock, Pa.-based pediatric dental surgery center operator. Financial terms were not disclosed.

OTHER

- Carvana agreed to acquire ADESA, a Carmel, Ind.-based vehicle auction and distribution company, for $2.2 billion. 

SPAC

- FOXO Technologies, a Minneapolis, Minn.-based epigenetic science technology company for the life insurance industry, agreed to go public via a merger with Delwinds Insurance Acquisition Corp, a SPAC. A deal values the company at $369 million.

FUNDS + FUNDS OF FUNDS

- Spark Capital, a San Francisco-based venture capital firm, raised $2.1 billion for a new fund focused on early-stage companies and venture growth. 

- Hiro Capital, a London-based venture capital firm, raised $340 million for a second fund focused on games, esports, creator platforms, and gamified fitness.

Hack VC, a San Francisco-based venture capital firm, raised $200 million for its crypto seed fund focused on crypto, Web3, and blockchain startups. 

-Blueprint Equity, a Solana Beach, Calif.-based growth equity fund, raised $175 million for its second fund.

PEOPLE

- Katherine Wu is leaving Coinbase Ventures, the San Francisco-based venture capital arm of the crypto exchange.

- Spark Capital, a San Francisco-based venture capital firm, promoted Natalie Sandman and James Kuklinski to partner.

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