Australian big-four bank NAB has allocated another $50 million to its corporate venture capital fund NAB Ventures, doubling the funds available to bring the total to $100 million.
The fund was launched in 2016 with an initial $50 million to invest over three years. It has backed 12 businesses to date, including property investment startup BrickX, real estate communications platform ActivePipe, and data sharing startup Data Republic.
It has also made investments overseas into startups in San Francisco and Toronto.
NAB Ventures general partner Melissa Widner tells StartupSmart the doubling up of the funds represents an endorsement of the program from the bank.
“The board liked the innovation it was bringing to the bank,” she says.
“The financial piece is very much secondary,” she adds.
As much as NAB Ventures is looking for return on its investments, it’s also looking for strategic value.
“Large companies can’t move as quickly as startups,” says Widner.
Nab Ventures acts as “a conduit” to make it easier for startups to partner with the bank, and vice versa, she adds.
Although NAB Ventures has only made 12 investments to date, Widner says the investment team has met more than 2000 startups over the past three years.
While there are no quotas, she expects deals will continue to go through at a rate of six to eight per year, until 2020.
It’s a competitive process; for each company Widner has invested in, she’s looked at at least 100. And if the investors have chosen to back something it’s because “we love that company”, she says.
But just being a great company isn’t quite enough. While NAB is typically looking for fintech startups, it will also lean towards those that “bring value to NAB’s SMEs”.
So far, there has been a focus on cybersecurity and agricultural tech, while artificial intelligence technologies “overlay everything”.
In the pitching process, one of the first things Widner looks for is a “passionate team that can execute”, she says.
“A lot of times the business model might change, but the team stays the same,” she adds.
She will also place importance on the strategic fit the startup has with NAB.
“It has to be pretty clear how having an equity investment will help the company,” she says.
“We’re focused on, ‘how could this bring a better experience for our customers? Or make the bank more efficient?’” she adds.
When you’re pitching to a corporate venture firm, there’s always a strategic angle, Widner says.
“We see incredible companies that we would love to invest in, but the strategic fit isn’t strong enough,” she says.
For startups to boost their chances of getting investment with NAB Ventures, Widner has one seemingly simple piece of advice.
“Make sure you’ve done your homework on the fund, the bank, and the people that you’re pitching to,” she says.
Being prepared simply shows that you’re good at sales, she says, “and to start and run a company you have to be good at sales”.
It can also be advantageous to bring some ideas as to how the startup could work with the bank, and “why they’re interested in money from NAB, as opposed to anyone else”.
Entrepreneurs who come in to pitch without being fully prepared get investors wondering about whether that’s how they approach their customers too. It’s important, and it’s “an easy one to do”, says Widner.