French VC Bets on Banks Upping Security

Partech Ventures, the French venture capitalist that has raised about $1 billion in 18 months, is betting on data-security demand from banks with an investment in a U.K. startup, predicting London will remain Europe’s prime financial hub despite Brexit, according to Bloomberg.

“As far as finance and insurance are concerned, we still see London as a real hub, maybe as big as New York. That’s not going to change rapidly, even with Brexit,“ Jean-Marc Patouillaud, managing partner at Partech, said in an interview. “For finance, London is a universal place, and a stepping stone for the U.S. market.“

The fund’s latest play is Privitar, a maker of data protection software based in London that has HSBC Holdings as a customer and is eyeing expansion by catering to others in the City. Partech said it invested about $9 million in Privitar, leading a $16 million round from backers also including Salesforce Ventures and CME Ventures.

CME Ventures, the VC arm of the Chicago Mercantile Exchange, is interested in using the technology to secure transactions on its own platform, Patouillaud said. Privitar’s software, which lets companies keep sensitive data protected while making it available to others for analytics and research, wants to expand in Europe and in the U.S., with obvious target customers in the finance industry, extending to sectors like pharma and telecommunications.

Uncertainty surrounding Brexit hasn’t stopped European startups and their investors from raising money in recent weeks. Idinvest Partners, another Paris-based VC, said this month it expects to complete a 250 million euro fundraising in the coming weeks. Earlier, Felix Capital Partners, a London-based firm that’s backed Gwyneth Paltrow’s fashion brand Goop and is seeking digital brands investments in Europe and the U.S., said it got more offers than it could accept for its latest fundraising of $150 million.

Protecting data is one theme Partech will keep scanning for targets in the coming months, as it expects it to be driven by cyberattacks, tougher regulation and customers demanding safer processes from transactions to storing information, Patouillaud said. Fintech, enterprise software, artificial intelligence, and connecting objects to the internet are some of the fund’s other investment themes.