Northwestern Mutual VC Fund Leader Discusses Investment Approach

Earlier this month, Northwestern Mutual announced it would invest $50 million in early stage companies over the next several years.

The Milwaukee-based life insurance and financial services firm says the new fund, Northwestern Mutual Future Ventures, will invest $500,000 to $3 million apiece in startups.

According to the fund’s website, so far it has invested in LearnVest, Betterment, Rize Advisors, and Nyca Partners, which is itself a VC fund with dozens of portfolio companies. About a year after Northwestern Mutual led LearnVest’s $28 million funding round in 2014, the insurer acquired the New York-based fintech startup.

The Northwestern Mutual Future Ventures team comprises two venture partners and a five-person investment committee chaired by Rebecca Porter, vice president of corporate strategy at Northwestern Mutual. Porter recently spoke with Xconomy about the fund’s origins, what industries and technologies it plans to target with its investments, and other topics. Our interview has been condensed and edited for clarity.

Xconomy: Can you talk a little bit about your background and time at Northwestern Mutual prior to being named chairwoman of the new fund’s investment committee?

Rebecca Porter: I’ve really been with Northwestern Mutual for over 17 years. I was here in the late 90s and early 2000s in different roles across the company. I then consulted for the company [part-time] for about eight years, and then came back full-time in 2013.

My experience working in operations in technology and my work on client experience and more deeply understanding our clients is a key part that I bring. The focus of Northwestern Mutual Future Ventures is on how we can connect with other companies that are starting up and looking to solve clients’ needs in new ways. We want to be sure we are looking for opportunities that align with the value that we want to create for our own clients—to meet their needs today, but also to anticipate what those needs are into the future.

X: What led up to the decision to create this new fund?

RP: We have been actively scanning the fintech landscape and building relationships [for] many years and have investments in Betterment and LearnVest going back a few years, and with the acquisition of LearnVest in 2015.

Obviously, with the launch, Northwestern Mutual Future Ventures is new out in the marketplace. But the work that we’ve been doing and the relationships we’ve been building are really a continuation of the journey that we have been on for years. We’ve been looking for opportunities to engage with emerging companies, not just from an investment perspective, but from a partnership perspective—to be able to bring their insights into [our] company.

X: So you all decided to create a more formal structure around investing in some of the technologies and startups you had already been watching closely?

RP: I see this as more of an evolution over the last several years. In terms of “Why now?,” I’d put it in two camps.

First, we look at the landscape today and know the pace of change is happening much more rapidly. There is innovation that is accelerating as consumer needs are changing. And so with that rapid pace of technological advancement and some of the great ideas that we see forming, [we are] wanting to be able to dedicate more effort to connect with that innovation that’s happening externally.

The other piece really has to do with consumers themselves. You think about student loan debt and the way that is just skyrocketing for people coming out of college, and the … Next Page »

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

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