One of the largest exchanges in Europe, Deutsche Börse has launched DB1 Ventures to reinvigorate its disparate investments with new steps into upcoming technologies while disposing of current small stake-holdings in startups.
As one of the fastest-expanding sectors within the industry, FinTech is seen as one way the exchange can revitalise single-digit growth rates. Low interest rates and high regulatory costs have left Deutsche Börse profits in need of a shot in the arm.
Studies conducted by KPMG International and CB Insights found that the venture capital supported FinTech firms managed to attract funding to the tune of $14.4bn in 2015, twice as much on the year before. In a report to the Financial Times online, Deutsche Börse chief executive, Carsten Kengeter, said:
"The future exchange and market infrastructure organisation will have a larger responsibility in fostering growth and innovation throughout financial markets. Technology is at the core of our business, so partnering with innovative FinTech firms that are relevant for our clients is an absolute priority for us."
Similar steps are being taken across industry organisations, as competitors race to get ahead in financial markets. Venture capital investments will also be made by ICAP; when the interdealer broker becomes NEX Group later this year it will realign itself to market infrastructure.
Head of Venture Portfolio Management at Deutsche Börse, Ankur Kamalia, said that the developments will concern "formalising and institutionalising investing within Deutsche Börse."
"It's not a FinTech fund that will invest randomly. It will invest only in areas that are strategic to Deutsche Börse. Simultaneously, we continue to actively manage our existing portfolio of investments, including divestment's where necessary" Mr Kamalia added.
The exchange has also ventured into trade volume for cloud computing, it holds minority stakes in Digital Vega and GMEX and runs a trade repository with Spain-based Bolsas y Mercados Españoles (BME).