NAB has joined Westpac to stump up $50 million in seed funding for a new venture capital project.
The NAB Ventures fund will be used to target partnerships and alliances and make investments “in innovative companies”.
“It is envisaged the $50 million will be deployed over three years and will be invested both in Australia and overseas,” NAB said in a statement.
CEO Andrew Thorburn said he hoped those investments would buy NAB “access [to] the best minds and cutting edge ideas.”
“Banking globally is undergoing a digital transformation,” he said.
“NAB Ventures will ensure [we are] able to embrace these changes to deliver innovative solutions for our customers.”
Specifically, NAB is looking to find – and fund – “new capability, technology, intellectual property, and businesses that could be deployed into NAB and its customer offering”.
It also hopes to achieve closer connections to emerging opportunities around “mobile platforms, payments and data and analytics.”
NAB plans to wring out those benefits via a digital acceleration program, which aims to put digital innovation into “the hands of customers and bankers quickly”.
Structurally, NAB Ventures will sit within NAB Labs, a 30-strong team created earlier this year to foster a “culture of innovation” at the bank.
The lab provides product testing and attempts to come up with agile solutions to customer problems.
Westpac is already over a year into its own $50 million initiative to fund innovative start-ups. In February last year, it provided the seed funding to start its own venture capital manager called Reinventure.
Although the make-up of Reinventure’s investment committee includes some senior Westpac executives, the bank was keen to have the fund managed at “arm’s length”.
“We want to encourage an autonomous approach,” Westpac’s head of retail and business banking Jason Yetton told the Australian Financial Review at the time.
“Venture capital has a very different culture to a bank and we don’t want to stand in the way of them doing their jobs.”
Reinventure is already taking Westpac into areas that NAB also hopes to capitalise on. Last month, the fund moved on bitcoin wallet Coinbase – seen as a strategic investment to aid Westpac’s understanding of cryptocurrency opportunities.
Others big 4 banks are also in the game. ANZ finances the Innovyz Start accelerator, which has produced several funding rounds for financial technology start-ups.
The Commonwealth Bank (CBA) has also set up its own Innovation Lab in Sydney, which is meant to “act as an idea incubator and accelerator focused on developing cutting-edge products, services and solutions in collaboration with customers, partners, start-ups and industry experts.”
Reports at the time suggested the Lab cost around $4 million to set up, although CBA remains tight-lipped on how much it is tipping into the project.
Outside of banking, a number of other large corporates have also created their own accelerators, including Telstra with muru-D and Optus with its Innov8 seed funding program.