In a not entirely unexpected move, the Royal Bank of Canada (RBC) announced the merger of RBCx and RBC Ventures. The news formalizes the merger following the announcement in April that RBCx head Sid Paquette would lead both groups.
At the time, RBC stressed that Paquette’s leadership of both groups didn’t signal their merger so much as an operational connection. Paquette told BetaKit at the time that the two groups would have common leadership and look to capitalize on the complementary skill sets and natural synergies in each group as the strategy for the bank’s innovation groups took shape in the coming months.
“The new structure will allow our Ventures innovation group the freedom to pursue daring ideas and build new capabilities.”
RBCx is the tech banking and innovation arm of Canada’s largest bank, while Ventures builds, acquires, invests, or partners with technology platforms.
Moving ahead, the new entity will operate as RBCx.
“We’ve built a platform unlike any other, a global leader, that will support tech entrepreneurs and our employees’ bold ideas, one that will redefine what a bank can do,” said Paquette. “The new structure will allow our Ventures innovation group the freedom to pursue daring ideas and build new capabilities as part of one of the world’s largest financial institutions.”
RBC said RBCx will combine four groups designed to support founders and companies across all stages and sizes of growth. Those groups consist of banking, capital, platform, and ventures.
Banking will provide businesses with products and services to help them scale; while the capital unit will invest, administer, and manage funds for VCs and companies focused on the tech, life sciences, and climate sectors.
The platform group will assist portfolio companies and banking clients in scaling marketing, operations, design, and technology; while ventures will leverage a portfolio of technology businesses focused on building new capabilities for RBC.
The bank claims the new group has approximately 4,000 tech and innovation clients, and its current portfolio of tech startups include Ownr, a business formation and legal management platform.
The combined RBCx and Ventures headcount consisted of approximately 500 people as of April. Previously, some 25 percent of the staff worked for RBCx while the other 75 percent worked for Ventures.
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RBCx was created to provide banking services and products to technology and innovation startups, as well as make venture capital fund investments. It also works on direct investment strategies. The latter has seen RBCx identify and support deals while RBC came in as a new investor, such as when Version One Ventures secured $100 million USD across two venture funds. Similarly, RBC joined Golden Ventures as an LP in 2021 when Golden Ventures closed two funds worth a combined $147 million CAD.
RBCx launched a venture debt offering in 2021, which was geared towards providing capital to early-stage startups at the Series A or pre-revenue stage. RBC also offers a Scientific Research and Experimental Development (SR&ED) product that a spokesperson for RBCx told BetaKit has been expanded to early-stage companies and the bank is looking to grow.
Previously, RBC Ventures primarily focused on investments in the FinTech, AI, data analytics, commerce and payments, information security, enterprise IT, marketing and customer experience sectors. Its portfolio includes League, Maple, and SecureKey. RBCx will continue to invest in those sectors while making FinTech, home, health, youth and young adults, and climate a focus for its venture efforts.
Feature image courtesy of RBC.