Commbank has launched a new start-up incubator called X15 Ventures, which it says will produce 25 new ventures by 2024, signalling a new approach to the startup-enterprise relationship.

The bank announced the initiative today which it described as an “Australian technology venture-building entity designed to deliver new digital solutions.”

With funding provided by the bank’s $1 billion annual technology investment, X15 will be a wholly-owned subsidiary of CBA and, unlike corporate venture funds, the bank will retain ownership of the companies that emerge from the program.

X15 will leverage CBA’s franchise strength, security standards and balance sheet to build stand-alone digital businesses which benefit from and create value for CBA’s core business, the bank said.

It will have its own delivery model and a dedicated management team, led by Toby Norton-Smith who has been appointed Managing Director of the division X15 Ventures.

Microsoft will provide technology and engineering capabilities for the initiative, while KPMG High Growth Ventures, which was started to help Australian start-ups navigate KPMG’s service offering, will provide advisory services.

The model builds on years of attempts by incumbents to harness the disruptive potential of a startups, backed by the resources and scale of the enterprise. The risk, however, is that the larger organisations will stifle innovation with bureaucracy or crush ideas which may disrupt their existing lines of revenue.

“X15 businesses will be nurtured and developed as startups but will have the scale and reach of CBA behind them to achieve rapid growth,” Norton-Smith said.

“X15 allows us to open the door and partner more easily with entrepreneurs than ever before. Under its umbrella, we will create an environment for new businesses to flourish, we’ll empower Australia’s innovators and bring new solutions to market designed to empower customers as never before.”

Microsoft Australia Managing Director Steven Worrall said, “I believe that the next wave of major technology breakthroughs will come from partnerships such as this, bringing together our deep technical capabilities and absolute clarity about the business challenges that need to be addressed.”

Amanda Price Head of High Growth Ventures KPMG said, “A performance mindset can be the difference between success and failure for start-ups. We look forward to working with CBA and X15 Ventures to build the ecosystem of support these new ventures need. From founder programs designed to unlock sustained high performance, to business and strategy solutions for high-growth ventures, there will be a wealth of smart tools at their disposal to help them overcome the challenge of scaling at speed.”

New Ventures

The bank intends to launch at least 25 ventures over the next five years and unveiled its first two businesses today: Home-In, a digital home buying concierge, and Vonto, a business insights aggregation tool.

The two new ventures align with CommBank’s consumer and business products.

Vonto is an analytics dashboard which pulls in information from Xero, Google Analytics, Shopify and other online business tools. It is a free app which can be used by any small business, regardless of who they bank with.

Meanwhile Home-In seeks to simplify the home buying process through its app which provides consumers with accredited service providers like conveyancers and utility companies, tailored checklists and a dedicated home buying assistant that will respond to queries. Unlike Vonto, Home-In is currently only available to select customers.

“We remain focused on bringing together brilliant service with the best technology to deliver exceptional customer outcomes in the core of our business. X15 will enable us to innovate more quickly, and continue to offer the best digital experience for our customers,” said CBA Chief Executive Officer Matt Comyn.

The announcement follows last week’s news that CommBank has invested US$300 million in Swedish Afterpay-rival Klarna, which has officially launched in Australia.

Fintech Concerns 

Update 4/02/2020: George Lucas the CEO of micro-investing fintech Raiz Invest, said the Venture X15 announcement “is a perfect example” of how customer data right (CDR) will give a competitive advantage to the big banks.

Lucas said, “CBA will be able to share customer data without customer consent with these subsidiary startups, as well as Klarna (a buy now pay later product which competes with Afterpay and Zip). Australian FinTechs have an onerous double consent process under CDR (Open Banking) to receive similar data and we must also remember that CBA has data on more than 30 per cent of the Australian banking customers.”

“Also these new companies through X15 will be able to rely on CBA to get automatically accredited under CDR, other FinTechs will have to undergo a rigorous due diligence process to get accredited. That is not a level playing field and again protects the big end of town and disadvantages everyone else.”

The ACCC is currently finalising the rules surrounding CDR for the financial sector including, the best way to allow intermediaries to use CDR data without needing full CDR accreditation.


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