CBA rolls out another fintech, invests $US20 million in VCs

  • By Kate Weber

Commonwealth Bank has rolled out the fintech Backr and committed US$10 million each to  Square Peg and Zetta Venture Partners.

The bank announced a number of intiatives on Tuesday including an update on their tie-up with Klarna.

The bank's venture building entity X15 Ventures has launched start-up, Backr to assist new businesses through red tape and confusion. 

Set to launch in September 2020, Backr aims to help first-time businesses via a web app to help first-time business owners through the often overwhelming process of starting a business. 

“The launch of Backr further demonstrates CBA’s commitment to supporting the small business economy as Australia emerges from the coronavirus pandemic, and working together with the fintech community through X15 Ventures on launching great ideas into the market,” said X15 Ventures Managing Director Toby Norton-Smith. 

Backr will offer a digital, task-based approach to starting up, and guides users through the process step-by-step, from business registrations, to business plan formulation, invoice creation and more. 

It is the fourth business to come out of the X15 Ventures since it was launched in February 2020, and is the first business developed outside of the Bank. 

The bank also announced an investment of $US10 million each into two venture capital funds.

Both Square Peg and Zetta Venture Partners aim to support the sourcing, scaling and financing of local fintechs, as well as the development of emerging artificial intelligence businesses in Australia.

“We know our customers are constantly looking for seamless and innovative ways to do their banking and even more so in the current environment,” said Commonwealth Bank CEO, Matt Comyn.

“We’re also delighted to welcome Square Peg and Zetta as strategic partners and look forward to working with them to bring new solutions to our customers, harnessing the latest technologies, artificial intelligence, and machine learning models.”

The Klarna impact 

For Klarna, the buy now pay later platform has seen more than 6.1 million customers now using the CommBank App, up 500,000 from 5.6 million in 2019.

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. 

According to CBA, global revenue for Klarna has grown to $750 million for the first half of 2020, and Klarna has seen volume growth of up to 50 per cent year on year during the coronavirus period.

The bank also provided an update on the take up of its mobile banking services.

More than $1.2 billion is now transacted through the App every day, while daily logins have surpassed 6.3 million. 

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.

“Our digital services have helped us to provide fast and effective financial support to our customers affected by the coronavirus,” said Comyn. 

“Since the start of the pandemic, we have connected with more than 7 million customers through the CommBank App and there has been more than 2 million unique views of our coronavirus support page.

“In just two weeks, we had messaged 2.6 million customers in App driving engagement with our new Money Plan feature, with 124,000 customers setting up a money plan to support themselves through the coronavirus pandemic. 

“We have also reached 5.8 million customers with Benefits Finder, which has helped save our customers in excess of $153 million in utility bills and additional government payments over the past year.

“Additionally, CommSec recorded strong activity, with 400,000 new accounts opened last financial year. This includes the CommSec Pocket App which recorded $180 million invested through more than 100,000 accounts with an average investment of $2,800 per active account.”