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Allianz.com: Please explain the idea behind Allianz Digital Corporate Ventures.
Marc Oerke: Allianz has an important initiative going on: The digitalization of the group. Allianz Digital Corporate Ventures supports this initiative by investing in young companies. As a strategic investor, we look for investment opportunities where a connection adds value to the startup as well as Allianz. Thereby, we get access to entrepreneurs who drive new ideas with the potential to offer new products or services to our clients or even enter new customer groups. They develop new technologies, which might even lead to a disruptive business model for the insurance industry. When it comes to enabling and leveraging digital innovation, we do not want to be a spectator, but to play an active role.
Recently, you invested in Argus Cyber Security, QuanTemplate and Urgent.ly. Can you explain their business models? What do you want to achieve by investing in these companies?
In general, the focus areas of our investments are Fintech, Connected Car/Home, Data and Analytics, Cyber Security and Digital Health.
Argus is an automotive cyber security pioneer, helping car manufacturers, their Tier 1 suppliers and aftermarket connectivity providers protect connected cars and commercial vehicles from car-hacking. Remember the Jeep hacked in July 2015, which caused a call-back of 1.4 million cars. In the future we will see more connected cars and autonomous cars driving on our streets. One of the key questions is: How can we make sure that these cars are safe from data breaches? This investment will help us to further explore our role in the world of autonomous cars.
QuanTemplate is a unique data and analytics company that focuses specifically on the needs of insurers to analyze and visualize risk. For companies like Allianz the capability of quickly analyzing the data at hand and acting upon them in a responsible and risk-oriented way is crucial. We think QuanTemplate have developed software that addresses this topic - we have not seen something comparable so far.
Urgent.ly: They have developed a very innovative service solution, taking advantage of the mobile on-demand economy and connected vehicles. In case of emergency, drivers can identify and connect with the nearest available, approved service provider and watch in real-time via their smartphone’s map, how help is approaching. A convenient, efficient and transparent service addressing customer needs in a stressful situation.
Allianz is approaching the digital ecosystem from various angles. Regarding the startup segment – what is the difference between Allianz Digital Corporate Ventures and the Allianz Digital Accelerator?
Allianz Digital Corporate Ventures invests in startups when they have grown to a certain level of maturity, characterized by a proven business model with a product, customers and first revenues. Allianz Digital Accelerator focuses on company building and incubating new ventures adjacent to Allianz core business, they screen and validate respective ideas, technology and business models.
How do you invest?
Our plan is to make five to seven investments per year. If we do that over a 5-year-timeframe, we will establish quite a portfolio. For the insurance industry, disruption is coming! It is an interesting industry but no one has cracked the code yet. Smart investors are ready to put a lot of money into companies that are disrupting insurance. So it is important for us to be part of the game.
Name three criteria for the startup you want to invest in.
As strategic investors, the first obvious criterion is a potential connection to Allianz, where we can generate some mutual value.
Then, we take a look at the management team. Great founders attract and retain great teams – and those teams are often successful. We ask: How experienced are they? Have they already established other startups in the market, and do they fit together with our strategy? We look at the market potential of the offering we are looking at. And, we evaluate the product itself and check respective intellectual property. So, there needs to be a great product, a clear product-market fit and a great team.
I would even add a fourth criterion: Who are the other investors in the startup and startups’ partners? This is crucial, as you have to agree on and jointly develop a strategy for the new companies and provide the necessary financial backing.
How do you establish first contact to new startups?
There are different ways to generate deal flow. Sometimes we get connected through contacts within the Allianz organization. The second source is our network and intensive exchange with other venture capitalists. Various corporates have comparable entities like us. If they come across a startup with an idea relevant for the insurance sector, they reach out to us and vice versa, if relevant for their industry. But of course we intensively screen the market ourselves, check databases and monitor conferences for interesting candidates. Not to forget: If a startup has a demonstrable connection to insurance, asset management or assistance services business and is raising money, they can reach out to us via email.
What are the hotspots for investing at the moment, we hear a lot about Silicon Valley: What about London, Paris, Berlin?
Besides the US, Europe and Israel play an important role in this field. Berlin, Tel Aviv, the US West Coast are the hot spots at the moment. London is especially important for financial technology (FinTech). Being headquartered in Munich, we have a strong focus on Europe and the U.S. So our team is traveling a lot, meeting potential startups regularly in order to establish and maintain a connection. We also see great local startups in Munich: Allianz participates in the DLD conference at the highest levels of the organization. This week we’ll participate alongside our COO at Bits and Pretzels.
5 years from now. Which kind of news would you like to read about your unit?
I want to see evidence that Allianz Digital Corporate Ventures has had a strong role in transforming Allianz’s business for the future.
Text/Interview: Andreas Klein
Update on October 7, 2015.
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