👉 Background: Cashrewards was founded in 2014 as a way to give Aussies cashback when they shopped at major retailers across Australia. Retailers pay Cashrewards a commission, Cashrewards passes a slice of that pie back to the shopper. At its peak, Cashrewards had over 2.5 million members and returned $165 million in cashback.

‍👉 What happened: In December 2020, in the midst of the COVID spending spree, Cashrewards listed on the ASX at a value of more than $130 million. By January 2022, ANZ’s venture arm took Cashrewards private at a 35% discount to its IPO price.  But now, Cashrewards has announced it will shut down immediately as ANZ, its owner, does a clean-up of its business.

‍👉 What else: Despite spending nearly $100 million in total to acquire the CashRewards business, it hadn’t met ANZ’s expectations. So ANZ’s Corporate VC arm, 1835i has announced plans to close it down immediately.

‍What's the key learning?

‍💡Corporate venture capital is when big companies set up investment arms to back start-ups and emerging businesses. The idea is twofold: financial return and strategic alignment.

💡For ANZ, its venture arm 1835i was created in 2018 to fend off fintech disruptors. By investing in startups, ANZ could learn from them, and sometimes even integrate their tech into the larger business. If all goes to plan, the startup can get access to a distribution channel of millions of customers and leverage the brand credibility.

💡But unlike independent VC’s, Corporate VCs often rise and fall with the priorities of the larger company. For example, under former Telstra CEO Andy Penn, Telstra invested in nearly 100 companies under Telstra Ventures. But when new CEO Vicki Brady stepped in, she began divesting hundreds of millions of dollars worth of investments. So, while Corporate VCs can open doors, it’s also tied to the whims of corporate boardrooms.