Northwestern Mutual Launches $50M Venture Capital Fund

Northwestern Mutual, the life insurance giant based in Milwaukee, said it has launched a $50 million fund that will be used to invest in startups over the next several years.

The fund, which the insurer is calling Northwestern Mutual Future Ventures, will make investments in the range of $500,000 to $3 million in early-stage companies.

Most investments will be Series A or Series B financing rounds, but the fund will also consider participating in seed rounds, according to its website. The fund says it will mostly be looking to co-invest alongside other venture groups and individuals, but might consider leading funding rounds under certain circumstances.

The fund’s four areas of focus are digital health, data analytics, client experience, and the changing preferences of consumers.

The overarching goal is to support startups developing technologies that “have the potential to transform how consumers experience and achieve financial security,” Northwestern Mutual said in a news release.

The fund’s website lists two venture partners: Craig Schedler, based in Milwaukee, and Mark Batsiyan, based in New York, according to his LinkedIn profile. The team also includes a five-person investment committee chaired by Rebecca Porter, a vice president of corporate strategy at Northwestern Mutual.

“We want to make it easier for Americans to know what financial security is and how to achieve it,” Porter said in a prepared statement. “We’re bringing together the strength and scale of a 160-year-old Fortune 100 company with leading-edge innovations of startups to transform financial planning.”

During the century-plus that Northwestern Mutual has been in business, it has amassed a vast war chest. Its “general account” was valued at about $200 billion as of last June, according to the insurer’s website.

Still, Northwestern Mutual Future Ventures touts the larger company’s “entrepreneurial culture,” citing as evidence its purchase of the New York-based fintech startup LearnVest in 2015. (Batsiyan will continue to serve as head of strategy at LearnVest, on top of to his responsibilities with the new fund.)

“We have already seen substantial benefits through LearnVest and other investments, and our goal is to continue tapping into innovators that share our passion for helping people,” Porter said.

Reports by Bloomberg and Fortune pegged the amount Northwestern Mutual paid for LearnVest at more than $250 million, citing sources familiar with the transaction.

In addition to LearnVest, the new fund’s portfolio includes two New York-based firms— Betterment and Nyca Partners—and Rize Advisors, based in Washington.

Another Wisconsin-based insurance giant has also embraced the concept of investing in startups, seeking to support technologies that could add long-term value to its core business. American Family Insurance launched American Family Ventures in 2010, and recently authorized it to make up to $200 million in investments, according to a Milwaukee Business Journal report. American Family also partnered with Microsoft (NASDAQ: MSFT) in 2014 on a startup accelerator program focused on home automation.

Jeff Buchanan is the editor of Xconomy Wisconsin. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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