ABN Amro is increasing the size of its venture fund from €100m to €150m to give it more firepower to add to its fintech portfolio.
This is the third time that the Dutch bank has increased the size of the fund since it was set up in 2015, and a clear sign that it is accelerating the pace of digital transformation.
ABN Amro has a portfolio of 15 companies, made 6 investments last year and 4 follow-on rounds for existing investments.
Corporate venture capital as a category needs to prove that it is here for the long term.
Hugo Bongers, director of the venture fund, said he expects a similar number of investments next year, but the size of each round may increase. With market uncertainty likely to continue next year, even as the Covid-190 vaccine begins to be rolled out, Bongers says he wants to make sure the bank can support its existing portfolio companies if times get tough.
“Corporate venture capital as a category needs to prove that it is here for the long term,” he told Sifted.
ABN Amro’s portfolio includes Swedish fintech Tink, data privacy company Privitar and Trifacta, the data analysis platform. Bongers says appetite digital investments has grown noticeably this year.
“Digitalisation at the bank has definitely been accelerating due to the pandemic. People are not going into bank branches so all the technologies around know your customer and mobile access are in demand,” he said.
Bongers adds that colleagues who were sceptical when the fund first started are now approaching him for introductions to the portfolio companies so that they can develop joint projects.
Bonger’s pitch to expand the fund took just 15 minutes to get approval — and some at the bank had been keen to go further and double the fund to €200m. Bongers resisted, favouring a more gradual approach.
“I want to grow on track record and returns rather than going for a big PR splash,” he said.
Future areas of investment could be in some of the emerging sustainability-related fintechs, such as those trading CO2 commitments or delivering APIs for carbon offsetting, Bongers said.
“There is a massive role for banks in the sustainability shift.”