Editor's Note: Digital Insurance reached out to several insurance carriers' venture capital arms and asked what they are looking for in insurtech startups when deciding how to invest. This is the first in a series of responses, from Peter Gunder, chief business development officer, American Family Insurance.
At American Family Ventures, we have invested in more than 40 early- and later-stage companies since November 2010. We seek standard or “market” venture capital terms in our deals. Additionally, we believe that the relationships between our company and startup firms should be mutually beneficial.
We typically invest in startups that are developing technologies, concepts and business models that are relevant to our vision of the future of the insurance industry. By taking minority equity positions in promising early-stage companies, we expect these investments generate both strategic advantages and superior financial returns.
We focus our investments on three primary areas:
The first area is insurance enablers, that is, companies that bring forward innovative, technology-supported products, channels and business models in the insurance industry. Among other partnerships, our investment in Coverhound, a leading comparison shopping site, is an example of this focus.
We also seek connectivity innovations between people and the physical world around them, especially if these connections can help mitigate risk. An important focus at American Family Insurance is the concept of “proactive protection.” We look for solutions that can help prevent accidents, property damage and, in some cases, save lives. Our investment in Ring video doorbells is an example of this focus area.
Finally, we are interested in emerging technologies in data analytics that help large enterprises like ours become more efficient, productive and profitable. New data inputs and analytical techniques are critical elements for any insurance company; our investments in Networked Insights and Lattice, two machine learning startups, exemplify our strong interest in data science.
When evaluating startups within these focus areas, we consider a host of factors, including the strength of the leadership team, the contextual trends of their market, the startup’s technical and economic progress to date, and our ability to help accelerate the growth of the company. We invest in a very small percentage of the opportunities we review, and we aspire to engage meaningfully with each of our partner companies post-investment.
American Family is an active participant in the venture capital scene and we want to make it easy for entrepreneurs to share their ideas with us. To get in touch with us, visit our site at http://www.amfamventures.com/.
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