Northwestern Mutual has set up a $50 million corporate venture fund to invest in technology startups that are innovating in the field of consumer finance, digital medicine and data analytics in a bid to expand its digital offering and capabilities.
The overarching goal of Northwestern Mutual Ventures is to support startups developing technologies that have the potential to transform how consumers experience and achieve financial security. The fund makes investments ranging between $500k and $3m in each startup focusing on four priority investment areas:
Some examples of Northwestern Mutual investments include New York-based robo-advice firm Betterment and Rize, a startup that provides digital tools to help consumers save. Philosophically, the fund prefers to act as a co-investor with other venture capital funds, but may consider leading rounds if the partnership is right.
According to the insurance company, the launch of the venture arm extrapolates from Northwestern Mutual’s acquisition of financial information and advisory website LearnVest in 2015.
Northwestern Mutual’s new venture fund comes at a time when investment activity into early-stage fintechs and InsurTechs is growing. This initiative also makes Northwestern Mutual the latest entrant to set up a venture arm dedicated to backing InsurTech startups, as more incumbents seek to avoid the disruption historically associated with technological shifts, in this case AI and blockchain.
Ultimately, allocating a portion of its IT budget to explore new technology driven solutions under controlled conditions is an investment into Northwestern Mutual’s future.