x15ventures (x15), Commonwealth Bank’s venture-scaling entity, has launched a stand-alone venturing platform aimed at helping the next wave of digital businesses and entrepreneurs meet the regulatory, risk and compliance challenges that comes with scaling their operations.

‘xStack’, as the platform is known, sits on a technology stack separate to CBA’s core banking systems, but operates to the same high and secure standards. It allows the venture-scaler, along with the individual ventures that it builds, invests or acquires, to keep innovating within the regulatory constraints of the banking industry, arguably the tightest in Australia. 

“xStack goes to the heart of how x15 operates differently,” x15ventures Managing Director Toby Norton-Smith said in a keynote presentation at Fintech Australia’s Intersekt conference that took place in Melbourne earlier this week.

CBA launched x15 in February 2020, with the goal to kick-start 25 new fintech businesses in the first five years. To date, x15 has either launched, invested-in or acquired six business ventures with more to come this calendar year.

“We’re not a corporate venture capital vehicle, and we're not incentivised or focused on passive minority investment positions,” he said.

Mr Norton-Smith said the benefits for ventures coming into the x15 fold and meeting CBA Group’s security and other standards means they can access the bank’s 15 million customers and its digital assets such as the CommBank app.

“What we are trying to do is to create an experience for individual ventures that is as aligned to a startup experience as possible.

“We will provide a venture with a set of core technology services —infrastructure, standard tooling and workplace — so from day one you can actually focus on your business,” he said.

Beyond providing tools, x15 also provides expertise. Where startups may not have access to legal, finance, cyber technology or risk and compliance services, x15’s individual ventures can leverage the specialised skills of the x15 team to assist them in driving scale.

“Writing a cheque to invest in a venture is actually one of the easier things you can do in corporate venturing,” Mr Norton-Smith continued.

“What’s harder to do is to explicitly deliver a commercial benefit to that venture. Getting our ventures technically scalable and regulatory safe means we can then move more quickly to distribute them to CBA’s customer base, or leverage the CommBank brand to promote their service.

“We see it as an enterprise grade ‘venture-in-a-box’ platform by embedding bank-grade security protocols,” he said. “And although we’re not prescriptive about the core product technology for a venture, we do see huge benefits in common workflow and coding repository tools that allow ventures and x15 to interact.

“It buys you a ticket to access CBA’s assets and that is really what we have been trying to crack.”

Mr Norton-Smith said if they can crack that code, then xStack could become a commercial product in itself. “I look forward to having enterprise customers of xStack beyond CBA when we are finished with it, and they don’t have to be just Australian.”

As for what x15 has achieved in its first 15 months of operation, Mr Norton-Smith said the aim was on “proving we could generate the velocity of new ventures we wanted.”

Speaking directly to the fintech community, Mr Norton-Smith said that while the x15 team is proud of the number of start-ups it had invested in to-date, now is also the time to explain the venture-scaler’s model itself, and how it differs from what the other banks, financial services companies and venture capital funds are doing.

Beyond building and acquiring ventures, x15 does minority investments, Mr Norton-Smith said, “however, there is a very clear and active role in how we’re supporting that venture,” as is evidenced by the company’s recent minority investment in bill smoothing app, Payble.

Mr Norton-Smith finished his presentation with a call to action, “there is an open invitation to reach out and connect,” he said.

For more information on x15ventures and how to get in touch, visit: www.x15ventures.com.au