Nationwide expands venture capital investments to $350 million

Nationwide is upping its venture capital game, expanding the $100 million program it launched in 2017 by taking it to $350 million, the company said 

The fund's focus continues to be on startups in insurance and finance that build on the company's strategy and help customers.

"Our filter is only looking at those things that can create value for our customers. We are looking for things that align very nicely with the products and services we provide," said Mike Mahaffey, Nationwide's chief strategy and corporate development officer.

The initiative dates to 2015 with the formation of the ventures team. In 2017, it announced the creation of a $100 million venture capital investment fund focusing on insurtech and fintech startups.

The money comes from Nationwide's $116 billion in invested assets. A portion of that is used for alternatives to more traditional insurer investments, such as fixed income bonds.

With the venture fund, Nationwide has invested in 25 companies and helped facilitate 31 partnerships between startups and Nationwide business units. One of them, Matic, a digital insurance agency, is based in Columbus.

Nationwide won't provide specifics on how well the investments are doing.

"The value we can measure, we're very pleased with," Mahaffey said.

Nationwide's expansion of its venture capital fund reflects growing interest in startups, including among other insurers making investments in new technology and services.

Last month, American Family Insurance said it was buying Columbus-based Bold Penguin, a company that makes buying and selling commercial insurance faster and easier.

One of Nationwide's investments, a company called Flo Technologies, ended up being sold. The company has developed technology to detect water leaks, a source of major claims for insurance companies.

Other investments include small-business lender BlueVine and drone company BetterView, whose technology can be used for property and building inspections. 

Mahaffey said Nationwide is striving for two goals with the investments: to make a respectable return and to finance products or services that could help Nationwide and its members.

Nationwide's investments focus around small business, planning for retirement, cybersecurity, telematics, homes, and the infrastructure behind insurance and financial services including underwriting, data and analytics.

Erik Ross, the leader of Nationwide's venture capital team, said Nationwide has not targeted a specific number of companies with the additional funding. Instead, Nationwide is looking for the best opportunities that Nationwide can create with that business, he said.

Investments are driven by what stage a young company is in, how it fits with Nationwide and its partners, and how close the company is to having a product that is commercially  viable, he said.

"We focus on startups that can help meet the ever-changing needs of Nationwide’s customers,” Ross said. “In addition to delivering strong financial returns, the venture capital team has proven to be a trusted partner to Nationwide’s business units, collaborating with great entrepreneurs to bring mutually beneficial partnerships to life."

mawilliams@dispatch.com

@BizMarkWilliams