Culture and Talent

How CIBC is growing business funding and advisory services

  • CIBC acquired a company that lends and invests in startups to help grow its business funding and advisory services
  • The acquisition lets the bank drive business from higher-value business clients and helps it connect with smaller companies that it may partner with in the future
close

Email a Friend

How CIBC is growing business funding and advisory services
In the race to compete for small business clients, particularly tech startups, CIBC is putting its ears to the ground by acquiring a company that funds and advises them. CIBC recently acquired Wellington Financial, an 18-year-old Wellington provides term loans -- typically between $2 million and $40 million typically -- to tech companies and advises them on growth strategy. CIBC plans to fold it into a new unit called CIBC Innovation Banking, which will bank North American technology companies from offices in Toronto, New York and Menlo Park. Terms of the deal were not disclosed. "Banks across North America are always sizing up new technologies whether it's software, blockchain or how to improve their business in the interest of the customers; our role is to help finance promising growth companies," said Wellington Financial chief executive Mark McQueen, who will become president and executive managing director of CIBC Innovation Banking. The companies it will fund and advise run the gamut of tech areas, including finance and clean technology, and the objective is to support innovation, even if they aren't immediately profitable. One follow-on effects will be identify companies for future partnerships or acquisitions, the bank said. It's also offering them cash management, deposit products, wealth and capital markets services. "It's a point of differentiation; it's a move to becoming a consulting and advisory service," said Christine Barry, research director at Aite Group, said of CIBC. "Business customers are becoming more sophisticated, and banks want to get them through the door and grow with them -- hopefully this will mean more revenue." CIBC was planning its expansion of small business offerings long before the Innovation Banking launch; as it grows its business advisory team and it plans to launch a digital banking platform for business combining banking, payroll, merchant services and accounting all in one place. Innovation Banking also plans to open a Chicago branch through CIBC's June acquisition of PrivateBancorp, McQueen said. "While several banks have either newly or already well established venturing businesses that make principal investments in new startups, we see many more banks focusing on rethinking the nodes through which they can partner, collaborate and engage fintechs more meaningfully," said Nikhil Lele, a principal at EY Financial Services. CIBC isn't alone among banks that want to go after business customers, with Bank of America and Wells Fargo rolling out specialized tools for them. Innovation Banking is a new way of reaching early-stage startups, a means to keep up and set itself apart from competitors. Instead of creating an innovation lab like many other banks -- like Barclays, JPMorgan Chase, and BNP Paribas -- have done, the bank acquired a company that performs a lot of the same functions. The acquisition is the third in recent months. Two weeks ago, TD Bank acquired Layer 6, an artificial intelligence company, whose niche is in personalization and prediction, and in October JPMorgan Chase recently acquired the electronic payments company WePay.

0 comments on “How CIBC is growing business funding and advisory services”

Banking, Culture and Talent

Bank branches are getting a facelift. What are smart branches?

  • From opening cafés to building community centers, bank branches are changing.
  • Big names like Capital One, Bank of America and JPMorgan may be spearheading the branches of the future.
Rabab Ahsan | February 02, 2023
Day in the Life

‘Product managers wear a lot of hats’: A day in the life of Melissa Manne, managing director of digital channels at Chase

  • The past few years, Chase has been zeroing in on its digital offerings. Leading innovation across digital experiences is Melissa Manne.
  • As managing director of digital channels, Manne focuses her energy on strategy, empowering her team, and staying in sync across the organization.
Rivka Abramson | January 24, 2023
Day in the Life

‘You don’t get trophies for working long hours’: A day in the life of Aaron Wollner, CMO of Quontic

  • As CMO of Quontic, Aaron Wollner leads the digital bank’s creative vision and marketing initiatives.
  • What does it mean to juggle building a brand with building a house? Or raising brand awareness with raising a baby? Find out in this week’s Day in the Life.
Rivka Abramson | January 09, 2023
Day in the Life

A tale of two phones: A day in the life of Ankur Sinha, CTO of Remitly

  • Ankur Sinha is CTO of Remitly, a fintech company focused on international transfers.
  • But for Ankur, being tech-focused doesn’t mean losing sight of the customer – or missing out on family time. With an early start and a steady routine, here’s how he makes it work.
Rivka Abramson | November 08, 2022
Day in the Life

On rising early and finding time to hear the train go by: A day in the life of Deque Systems’ Patrick Sturdivant

  • Patrick Sturdivant is the vp and chief strategy consultant at Deque Systems, which helps FIs build accessible products.
  • Along with ensuring more companies prioritize accessibility standards during his workday, Patrick is building a house that will sound and feel pretty while also being ADA compliant.
Rabab Ahsan | October 11, 2022
More Articles