Finovation Friday | Banks Find Success with Corporate Venture

This is especially noticeable within bank venture funds, a few of which have doubled in size this year. In Q1, BBVA Ventures spun out into a new firm, Propel Venture Partners, with BBVA as the sole LP. At the same time, BBVA increased its investment from $100MM to $250MM.

Last month, Santander announced it is doubling the size of its fintech venture arm from $100MM to $200MM, and Westpac increased its commitment to its sole-LP VC firm Reinventure from $50MM to $100MM.

One of the benefits of publicly disclosing the increased funding, aside from attracting the attention of more startups, is to give the banks a chance to show that the venture investments are adding value to the banks’ core business, as insights and strategic partnerships further accelerate their own internal transformation efforts.

Peter Jackson, Innovation head at Santander said,

“The fund is an essential part of Santander’s broader innovation strategy… Our $200 million total investment demonstrates the group’s commitment to innovation, and to the role of InnoVentures as a catalyst for transformation, by finding and partnering with technology companies that allow us to bring the next generation of services to our customers…”

InnoVentures Managing Director Mariano Belinky says the additional funds will target some new areas, including cognitive computing, artificial intelligence, and digital banking.

Westpac describes their efforts as more defensive, believing that banks should have ownership in the startups that are trying to disrupt them, while creating strategic partnerships to find innovative solutions to customer problems.
 
Reinventure Managing Director Danny Gilligan says that while they continue to evaluate investment in more traditional areas such as payments and lending, they are expanding to consider artificial intelligence and startups who are outsourcing internal bank functions, especially around security and data.

Travis Skelly, former Director of Investments for Fintech Collective in NYC, has left to become a Senior Vice President at Citi Ventures.

Apple hit back at Australian banks, calling them a cartel, as the Apple Pay battle rages on. Four of the largest Australian banks have applied to collectively negotiate with Apple regarding mobile payments due to the fact that Apple will not let their banking apps utilize the iPhone’s NFC hardware. The banks believe that Apple’s refusal to enable NFC for third-party apps gives an unfair advantage to Apple Pay.

AXA discusses how they are exploring innovation in insurance, including the AXA Strategic Ventures fund, an innovation lab, and strategic partnerships.