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U.S. fintech venture firm Nyca raises $125 million for new fund

By Anna Irrera

NEW YORK (Reuters) - Nyca Partners, the venture capital firm launched by former Visa Inc President Hans Morris, successfully closed fundraising for its second fund to invest in financial technology startups.

The company said on Friday that it had secured more than $125 million in commitments for the new fund which will focus on backing young companies in sectors such as alternative lending, digital investment advice and financial infrastructure.

The fund has 10 institutional investors and 29 limited partner advisers with experience in the financial services industry, the company said.

New York-based Nyca closed its first fund of $30 million in July 2014 and since backed a number of high-profile fintech startups including lending companies Affirm and Orchard, as well as LendingClub Corp which went public in late 2014.

It is also an investor in digital investment advice company SigFig.

"This is an exciting time for fintech and this latest fund will allow us to continue to invest in companies that leverage technology to build platforms that empower consumers," Nyca’s managing partner Morris said in a statement.

The new fund has already made more than a dozen investments to date, including artificial intelligence company LeapYear Technologies Inc and digital insurance broker EmBroker Inc, Nyca said.

The fund close comes as venture capital investments in fintech companies in North America decrease, following a boom in 2015. North America fintech companies raised $900 million from venture capital firms in the third quarter of 2016, a 68 percent drop compared with a year earlier, according to a report by KPMG and CB Insights.

"The market is sobering up and looking for high-quality metrics," said David Sica, a principal at Nyca Partners. "The first wave of fintech was very much about building standalone large brands. We are now in an environment where the existing financial institutions and incumbent players are looking for ways to partner with startups."

Launched by Morris, a long-time Citigroup Inc banker, in 2014, Nyca also boasts PayPal Holdings co-founder Max Levchin as an investment partner.

(Reporting by Anna Irrera; Editing by Lisa Shumaker)

 

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