On January 12, 2020, Migdal Insurance announced that it had established Next Generation Finance, its fintech investment arm. The investment arm plans to invest $1 to $2 billion in various fintechs, startups, and funds in the next two years. The announcement is great news for startups in the blockchain sector in need of funds to get their projects off the ground.
What The CEO Had To Say
According to the CEO of Migdal Insurance, Ran Oz, the upcoming fintech sector had gained significant maturity and momentum in the recent past. He said that the company aimed to position itself as a leader when it comes to investments in the fintech sector locally and abroad. Migdal was established in 1934 and is a leading insurance group in Isreal. The insurance entity caters to 2.3M private and corporate customers.
Their goal was to maintain an edge in this innovative sector, which would allow them to generate high yields for savers while enriching their investment portfolio with a new generation of finance. The CEO added that the investment arm represented a new step in its investment strategy when they were moving from traditional finance to the fintech sector. Migdal Insurance believes that the fintech sector represents the future of finance.
Oz concluded by stating,
“Having honed our expertise in this field over the recent months, accumulating extensive know-how, we are now ready to launch an extensive investment operation.”
Migdal And The Fintech Sector
According to the announcement, Migdal viewed fintech as a major growth engine. They intend to channel a huge amount of their activities and investments in the sector. The company has already created the infrastructure to enable fintech investment. It included the processed need to screen investment opportunities with leading global firms. Additionally, they have also established a team of fintech analysts. The Chief Investment Officer at Migdal Insurance heads the team. Another key member of the team is Moti Shatner, a cofounder of Bluevine.
How COVID19 Has Transformed Fintech
The COVID19 pandemic has had a major impact on how the world works, especially the business world. It has accelerated interest in the fintech industry and blockchain technology. Currently, Bitcoins price has accelerated due to continued institutional adoption. Additionally, various blockchain-based solutions have gained popularity due to their ability to ensure secure transactions.
Even after the crisis is over, most of these fintech startups will already have gained a foothold in the world. Consequently, now would be the best time to invest in these fintechs, which are likely to have a lasting impact on how the world operates.
Migdal understands the opportunity and they plan to become a leader in the fintech world. Any investment made today is likely to pay off hugely in the future. As more people adopt blockchain and fintech-based solutions, the companies that made the initial investment will enjoy great returns. For instance, those that made investments in the early days of DeFi are already reaping the fruits of their investment. The decision by Midgal to commit $2 billion to the sector shows that institutional investors are beginning to understand the potential the industry holds.
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