Philippe Daoust
Managing Director for NAventures, the corporate venture capital arm of National Bank of Canada
Exploring the realm of venture capital reveals notable distinctions between traditional venture capital (VC) and corporate venture capital (CVC). Philippe Daoust, Vice President and Managing Director of NAventures, the CVC arm of National Bank of Canada, recently shed light on this divide.
National Bank of Canada is keenly committed on contributing to the Canadian financial ecosystem. Through NAventures, the bank invests in innovative startups and technologies that align with its strategic goals. The bank's commitment extends beyond support for emerging tech companies; it strategically integrates these innovations into its operations, boosting overall competitiveness. By actively engaging with the local startup ecosystem, the bank plays a pivotal role in driving economic development and technological advancement nationwide.
Venture Capital vs. Corporate Venture Capital
VC and CVC differ significantly in their objectives, investment approaches, sources of funds, and strategic goals. Traditional venture capital firms primarily aim to achieve high financial returns within a relatively short period, typically ranging from five to seven years. Their focus is on identifying and investing in high-growth startups with the potential for substantial financial returns upon exit, whether through an acquisition or an initial public offering (IPO). These firms operate through general and limited partnerships, where investors, known as limited partners, provide the capital, and the venture capitalists, or general partners, manage the investments.
National Bank of Canada’s Venture Initiatives
National Bank of Canada leverages two distinct corporate venture initiatives, NAventures and external ventures like Portage, each tailored to fulfil different strategic needs and purposes within the organisation.
NAventures is fundamentally an internal initiative, meticulously crafted to support and advance the bank's innovation and strategic goals. Its primary mission revolves around fostering internal growth and enhancing the bank’s core operations. “By focusing on improving IT capabilities, acquiring new clients, and enriching the employee environment, NAventures aims to integrate innovative solutions directly into the bank's framework,” says Philippe. This approach ensures that the initiatives undertaken are closely aligned with the bank’s long-term strategic objectives, creating value for both the institution and its customers.
Importance of Ecosystem and Partnerships
Being part of a larger ecosystem is crucial for NAventures' success. Philippe emphasises, "Corporate venture funds are always going to be smaller, so you need to nurture the ecosystem and spend a lot of time on them. That's why we need a friendly environment to help us find the best solutions."
To achieve this, NAventures collaborates with various partners to enhance its offerings and services. One such partner is CGI, a consulting firm based in Montreal, involved in strategic collaborations with NBC, especially in areas like open banking. Another partner is FlowX.AI, working on enhancing IT development speed and capabilities through AI and new technologies.
Additionally, NAventures has developed strategies with investment firms like Sagard, which owns several funds, including Portage, a significant FinTech fund in Canada. These collaborations ensure that the bank stays at the forefront of market trends and technological advancements.
Philippe explains, "We've been very good at connecting ourselves to the rest of the bank to really deliver that value, and the companies we invest in usually end up being useful inside the bank. The way I compare this to is a bit like gears. National Bank is the main gear, and we have all those small gears, which are all the FinTechs we have invested in. When National Bank gives them a contract, it makes the small gears turn very fast. If we only have one small gear turning, National Bank, the bigger gear, is not going to be turning. But we have 25 of them all turning superfast, you start moving that big wheel as well.
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