Liberty Mutual formally launched its $150 million venture capital fund, Liberty Mutual Strategic Ventures, in mid-May. The fund is centered on three main focus areas: the connected home, next-generation vehicles and the sharing economy.
Its first strategic investment was in August Home, a provider of digital smart locks and Wi-Fi doorbells. Russ MacTough, managing director of Liberty Mutual Strategic Ventures, spoke to INN about the insurance giant’s decision to partner with August Home, ongoing efforts to keep up with emerging trends in insurtech and other startups the insurer might look to invest in.
INN: Why did Liberty Mutual get into the venture capital market?
RM: Large industries evolve over time as customers need change relating to technology and the advancement of that technology. Venture capitalism has proven to help people save the future of industries. We are, however, not new to the VC world. We have another group that does financial investing, different from the strategic tech investments Liberty Mutual Strategic Ventures does.
INN: What does Liberty Mutual hope to accomplish in the space?
RM: We want to make sure we stay at the forefront in the evolution of insurance and bring new products and services to customers quickly.
INN: How will it keep up with new trends in insurance to make informed investment decisions?
RM: We have a holistic strategic strategy innovation team and strategic partnerships team that in tandem collect market intelligence and evaluate trends. Trends observed in the market so far gave rise to our three domains or focus areas.
INN: Liberty Mutual’s first strategic investment was in August Home. What stood out about them?
RM: Aside from having top-tier VC investors already backing them, August tackled two focus areas for us, the connected home and sharing economy. Whenever two of three overlap, those present interesting opportunities to Liberty Mutual. This is an extension of our current partnership with August where our customers can get discounts on purchases through our phone app.
INN: What other types of companies is Liberty Mutual Strategic Ventures looking to invest in?
RM: The fund is an early stage tech fund so we are looking at companies that fall into one of our focus areas. If they don’t, we will evaluate them on an ad hoc basis. All companies, however, should have a focus on personal lines insurance.
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