Why CVCs fail – And what it takes to build the next generation of finance

Why CVCs fail – And what it takes to build the next generation of finance - Tenity Insights from Davos 2025.

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Corporate innovation in banking often misses the mark. There’s no shortage of flashy initiatives—innovation labs, corporate VC funds, hackathons—but when it comes to real transformation, most of them fail to move the needle.

In this episode of Innovation Connected, host Max Plank sits down with Alex Manson from SC Ventures, the venture-building arm of Standard Chartered. Together, they pull back the curtain on why most corporate innovation efforts fail and share a blueprint for actually driving change in the financial industry.

If you’re working in fintech, venture capital, or banking, this is an essential conversation.

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Why corporate VCs usually fail

Corporate venture capital (CVC) funds often struggle to deliver real impact—and the reasons are deeply structural. According to Alex Manson, the main problem is that they either fail or disappoint before they get the chance to prove themselves.

“CVCs typically either fail or disappoint. By the time they underperform, they get shut down too soon. The investment cycle is long, and they rarely get the chance to prove themselves.”

One of the biggest reasons for failure is that CVCs are either too close to the bank or too far away. If they’re too close, they get stuck in bureaucracy, with every investment requiring layers of approval. But if they’re too far, they lose strategic relevance and become just another investment fund.

Alex sums it up bluntly:

"You're either too close or too far. When you're too close, you justify a lot of stupid things by calling them ‘strategic.’ When you're too far, the mothership gets nothing out of it."

Instead of following this broken model, SC Ventures chose a different path—one focused on building ventures that stand on their own, with real customers and revenue models.

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Why innovation labs are just “theater”

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It’s not just corporate VCs that struggle—many corporate innovation labs exist purely for show.

Innovation labs often look great on paper. They get a lot of internal and external attention, and they serve as a PR-friendly symbol of progress. But the reality? As Alex puts it:

“A few years ago, everyone wanted bean bags and colorful walls. But when times get tough, marketing budgets and ‘innovation labs’ are the first things to go.”

The problem is simple—most innovation labs aren’t designed to execute real change. They run workshops, host brainstorming sessions, and pilot small projects, but they rarely result in new products or revenue-generating businesses.

Alex gets to the heart of the issue:

"Changing an entire bank from within is really hard. There’s too much inertia, too many structural barriers."

So rather than spending money on performative innovation, SC Ventures decided to skip the theater and focus on venture-building—creating startups that could actually grow and scale.

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Building Ventures that actually work

Generating ideas is easy—but building something that can scale inside a highly regulated financial system? That’s the real challenge. SC Ventures doesn’t just launch startups for the sake of it—they carefully test, validate, and refine ideas until they work.

Max raises an important question:

"You test the market, so is there really a problem which is solved or is there a need or a demand, right?"

SC Ventures’ approach is ruthless when it comes to validation. Many ideas don’t make it past the initial concept phase. Others pivot multiple times before they find a viable model.

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"We kill ideas all the time—just by not acting on them. The ones that survive? They’ve pivoted at least five times before finding their fit."

This is what sets SC Ventures apart. Rather than pouring millions into a project without market validation, they adopt a test-and-learn approach:

✅ Start small, test, iterate. If an idea doesn’t work, they change it fast.
✅ Force ventures to stand on their own. No guaranteed support from the bank.
✅ Failure isn’t the enemy—stagnation is.

"If an idea doesn’t solve a real problem, it’s dead before we even start."

This approach ensures that only the strongest ideas make it to market.

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Where true innovation is happening

One of the most surprising takeaways from the episode? The biggest fintech opportunities aren’t only in the US or Europe—they’re happening in Asia, Africa, and the Middle East. Alex shares:

"Our footprint—Asia, Africa, and the Middle East—is where it's happening."

These regions are moving faster than the West because they aren’t burdened by legacy systems. Fintech innovation there isn’t just a strategic initiative—it’s a necessity. And explains:

"In these markets, innovation isn’t a luxury—it’s a necessity. They don’t have legacy systems slowing them down, so they build what’s needed, fast."

These markets are agile, fast-moving, and focused on solving real problems—which is why SC Ventures chooses to build and scale where the biggest opportunities exist. Alex sums it up perfectly:

"People in these regions aren’t waiting for permission to innovate. They’re building solutions that change lives, and they’re doing it now."

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For more insights into fintech investment trends, corporate venture capital, and startup growth strategies, subscribe to Innovation. Connected – World Economic Forum Davos 2025 Edition.

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