MADISON, Wis.–During its Winter Owners Meeting, Members Development Company (MDC) announced it has reached the minimum goal of its capital raise for its new fintech venture fund, Curql Fund I.
According to the MDC, 18 of the R&D CUSO’s owners have committed $62 million to the fund, with additional pledges expected in the coming months. MDC said once final agreements are signed and the first $50 million is officially available to the fund, it will be able to begin making investments in fintechs, “helping the credit union industry better control its financial technology future.”
Curql Fund I’s investments will be made under the advisement of Next Level Ventures, the fund’s manager, and the guidance of an investment committee comprising representatives from three of MDC’s owners. MDC said it expects the amount of capital committed to the fund from its ownership to grow to $100-$150 million by summer.
‘Forward Thinking’
MDC noted it holds owner meetings twice each year to learn from subject-matter experts, receive updates on current projects (such as the announcement above) and evaluate proposed initiatives. The most recent meeting, held virtually, was attended by more than 400 credit union industry professionals, including representatives from each of the more than 70 “forward-thinking owners” of the company, MDC said.
"While the pandemic kept us from meeting in-person in San Diego this week, it hasn't slowed our momentum," said Jeff Kline, MDC’s CEO. "Our meetings are the best opportunity for our owners to hear our newest ideas, learn from experts from both inside and outside our industry, and set priorities for our collaborative network. While we missed being face to face with our owners, our meeting was still extremely worthwhile and exciting for owners and MDC staff alike.”
Insights Shared
Among those who addressed the meeting and shared their insights were:
- Jeremy Gutsche, founder and CEO of Trend Hunter, who charged credit unions to be like the many well-known and successful companies founded during times of economic crisis—Disney, Microsoft and Apple, to name just to name a few. Their success was a matter of hard work and recognizing an opportunity, and Gutsche advocated in his keynote address for MDC’s ownership to recognize the opportunities presented in today’s crisis, the company reported.
- NCUA Board Member Rodney Hood talked about the regulatory challenges the industry faces in the fintech space and about a new office NCUA is creating to increase the ability of credit unions to work with and even invest in fintech companies. Hood also spoke about how credit unions have a unique responsibility to work toward the financial wellbeing of their members as the financial services industry becomes ever-more digitized.
- Nicholas Thompson, former editor-in-chief at Wired magazine, predicted the trend fueled by the pandemic of investing in technology to improve service and cut costs will be here to stay even after the pandemic is over, and he pointed to the diminishing cost of technology and discussing what an increasingly digitized world really means for both organizations and consumers. For example, the cost of one gigaflop of computing in 1961 was twice the GNP of the United States, but in 2019 it was a nickel, he said.
- Ajay Agrawal, founder of the Creative Destruction Lab, made a similar point in his presentation regarding the use of artificial intelligence, stating that the decreasing cost for AI is making its use practical (and more reliable than human expertise) in more and more contexts.
- Steve Williams, co-founder and president of Cornerstone Advisors, and Brad Smith, partner of Cornerstone Advisors, discussed original research performed in partnership with MDC. They surveyed MDC’s credit union owners on the core banking systems used, whether they were satisfied with them, what capabilities they felt were needed and what best practices should be shared between and championed by members of the collaborative network. One of the conclusions reached, MDC reported, was that credit unions have a valuable opportunity to use agile software automation tools to empower technologies complementary to core banking, such as CRM platforms, without the need to pursue expensive or impractical solutions like building a custom core, moving toward a common data model or creating new API standards.
- The meeting also featured three breakout sessions for owners to choose from, including one hosted by Kurt Schroeder, chief experience officer at Avtex, who talked about the contact center of the future; another with Brenton Peck, Director of Financial Health Network, who discussed how credit unions will need to move from being financial services providers to financial health providers; and another from CU NextGen, a technology CUSO founded by MDC and ClaySys Technologies, that focused on best practices for credit unions looking to further their digital transformation journeys.
NexUP Teams
“Another exciting part of our Owner Meeting is hearing from the NextUP teams,” said Sarah Lietz, MDC’s chief experience officer and leader of NextUP, MDC’s innovation program. “Each year, staff from our owners receive innovation training and research support as they work together to develop actionable solutions to issues within the industry.”
In 2020, 50 owners participated in the program on five teams, developing ideas to feed into MDC's project pipeline, the company reported.