Toronto-Dominion Bank is planning its first Internet-only venture capital fund.
The $100 million fund, to be known as TD iCapital, will be jointly funded by TD Waterhouse Group Inc., the banking company's discount brokerage arm, and TD Capital Group, its merchant banking unit.
Toronto-Dominion, which has other investments in Internet-based companies through TD Capital, is considering establishing more Internet-only venture capital funds, said Marc Michel, managing director of TD Capital. "But nothing is firm," he added.
James Marks, an analyst who covers TD Waterhouse for Credit Suisse First Boston, said the discount brokerage is following in the footsteps of companies such as E-Trade Group Inc. and Ameritrade that have successfully launched similar funds.
On-line brokerage firms "are among the most attractive" places to seek funding, he said. And it is a good investment for on-line firms, provided it does not take up a "disproportionate amount of their capital," he added.
Mr. Michel said TD Capital plans to invest in companies that would distribute products through TD Waterhouse's Web site. He declined to give names, but said they would include companies that provide consumer loans, mortgages, and on-line bond trading.
TD Capital may also invest in companies that offer technologies that could improve the on-line experience of TD Waterhouse's customers, he said. Many of the companies will be taken public through an on-line investment bank that TD Waterhouse co-founded, Mr. Michel added.