CommBank is ramping up its investment in digital startups, committing US$10 million to the most recent funds for both Square Peg and Zetta Venture Partners to support local fintechs, as well as emerging artificial intelligence businesses in Australia.
The strategic partners are tasked with stewarding new digital banking services into the world to serve the bank’s 15 million retail and business customers.
Australian venture capital fund Square Peg will partner with X15 on the sourcing, scaling and financing of Australian fintechs. While US-based Zetta Venture Partners invests purely in artificial intelligence companies.
The bank also announced its startup incubator X15 Ventures has launched its fourth new venture, Backr, which offers a digital, task-based approach to starting a small business, guiding business owners through the process step-by-step.
The Backr app is set to launch in September 2020 and CommBank will also deposit $500 into the account of any eligible business launched through Backr, until the end of 2020.
“Through Backr, we hope to help thousands of new digitally enabled small businesses get off the ground. This is now more important than ever given the need to drive the economic recovery,” said Matt Comyn, CEO of Commonwealth Bank.
The big bank’s other high profile fintech investment is in Klarna, a Swedish buy now, pay later firm and Afterpay rival. CommBank bought a 5.5 per cent stake in Klarna for $300 million in January.
Since its launch in January 2020, the Klarna App has been downloaded by more than 270,000 Australians and more than 80 merchants are now live on the platform.
The bank also provided an update on its digital transaction volume throughout the coronavirus pandemic, which has closed bank branches and all but eliminated carrying cash.
More than 6.1 million customers are now using the CommBank App, up 500,000 from 5.6 million in FY19. More than $1.2 billion is now transacted through the App every day.
Combined with the group’s online banking platform, NetBank, digital daily logins rose to a record 10.2 million at the height of the coronavirus pandemic.