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Citi spins out Bridge, its fourth incubated startup

Sep 11, 2023
Illustration of a coffee cup with a bank vault for a lid.

Illustration: Brendan Lynch/Axios

Citi is spinning out Bridge, an SMB lending startup incubated within the bank, the company tells Axios.

Why it matters: This is Citi's fourth spinout of an internally incubated business — a rarity among U.S.-based banking giants.

Driving the news: Fifth Third Bank- and Fin Capital-backed competitor Foro is acquiring Bridge for an undisclosed sum. Citi in turn will participate in a $3 million funding round in Foro, alongside TTV Capital.

  • Bridge co-founder Rohit Mathur will take over as CEO of the combined Foro business.
  • Based in Charlotte, North Carolina, Foro emerged from stealth in January.

Details: Previously a middle market banker at Citi, Mathur came up with the idea for a company that would match businesses to lenders in 2018, launching it in August 2021.

  • The firm lends between $100,000 to $10 million and has recently inked deals with Walmart to provide access to their suppliers.
  • There's no shortage of SMB lending fintechs (including Fundbox, Bluevine and OnDeck). But Mathur still sees a lack of ways for mid-size businesses to find loans of $2 million or more — creating an opportunity for Bridge.

The big picture: Each of Citi's internally incubated startups has spun out from Citi's Institutional Clients Group, and all were initially developed by Citi employees.

  • "This is a new muscle that we have been building and exercising for a while," Emily Turner, head of business development for ICG, says of its spin-out operations.
  • That includes QMA, a Citi-incubated workflow tool, acquired by Delta Capita in July.

Of note: Citi has been internally incubating startups since the mid-2010s, when Proxymity was created.

  • That was when they first got comfortable looking to build things where they couldn't necessarily answer, "Will this just live in Citi forever?" says Turner. "And we were still comfortable putting in time and resource exploring and learning on that basis."
  • Some of the startups will spin out; others could be absorbed into Citi.

Background: Goldman Sachs this year spun out its first startup from its internal incubator. The networking platform was dubbed Louisa.

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