Given that the world of insurance is dominated by giants, it’s not surprising to see so many partnerships between startups and the big groups in the sector. The former bring innovation and flexibility, the latter capital and experience. Managing partner of AXA Group's venture capital fund, François Robinet, shares his experience of the subject with Leaders League.
Leaders League. Can you detail the main activities of Axa Strategic Venture?
François Robinet. Axa Strategic Venture is an investment fund dedicated to startups. Our objective is simple: find and support the best new initiatives, wherever in the world they may be. Obviously, the projects undertaken by entrepreneurs must be relevant to Axa’s entities. When you look at the size of our group and the variety of our needs, the remit is extremely large. It concerns as much startups specialized in market places as it does connected objects without an immediate application, but with high potential ‒ such as blockchain or machine learning. We have a budget of 250 million dollars available to reach our goals.
What sets your company apart from traditional investors?
Our methods are similar to those venture capital funds which target young, promising companies. However, there are three main elements where investment and strategy meet, that set us apart. Firstly, when we invest in a startup it benefits from the strengths of the ecosystem of Axa, a multinational leader in its sector with a wide range of expertise. With our long history in the world of insurance, the knowledge accumulated by our staff could turn out to be vital for young innovators. Secondly, Axa can, at once, carry out the role of distributor, data provider and partner in the framework of a joint venture. This win-win relationship can provide new clients, or new growth avenues for these startups. Last difference: our global approach. With offices in Paris, London, New York or San Francisco, our reach is global. There will be a new addition to this list shortly, a yet-to-be-determined Asian city.
Numerous initiatives have been launched by Axa Group to stimulate a global transformation. How can early-stage investment funds compliment this strategy?
Axa is well-aware that the digital transformation has raised the stakes. Due to their size, big groups have greater difficulty modernizing or changing strategy quickly. Faced with this issue, our directors launched a series of complimentary projects so as not to miss out on the next big innovations. An in-house incubator encourages the creation of companies by staff in the group, special business units focus on original projects. Nobody knows yet how this will turn out but having multiple projects multiplies our chances of success.
The insurance sector business is based on solid foundations, and high barriers to entry protect established companies. In this context, why invest so heavily in innovation?
Regulation and our own fund management needs constitute sizeable obstacles for those who wish to revolutionize the sector. However nothing is set in stone. What are the fundamentals for today’s insurer. No sector is immune from the effects of new technology. The world of insurance can be compared to a tree with strong roots, but whose leaves are in constant mutation. Axa Strategic Venture pays close attention to the the leaves, so that a potential issue doesn’t reach the roots. Insurance is based on the virtual. Compared to the disruption that technology has brought to the world of taxi drivers, the revolution in our industry has the potential to be even greater. The practice has not traditionally attracted technologically-minded entrepreneurs, because it seems staid at first glance. However that’s started to change over the last year and a half. The amounts invested in promising insuretech startups have continued to amplify. Despite the complexity of the market, there is a boom when it comes to startups signing strategic partnerships to get ahead.
How would you assess your first 18 months in charge of Axa Strategic Venture?
One thing is certain, we have many more opportunities to invest today than we had a year ago. Venture Capital is an area that plays out over the long term. Following these first months of activity we can say that our operation has been a success. To date, we have already made 28 investments. Our reputation on the market is established and all the information on insurance innovators comes naturally back to us.
Among the companies that you support, is there a startup that stands out?
It’s difficult to single out just one. Blockstream is bold investment on our part. If the blockchain market starts to take off and become more widely known, the fruits of our partnership will be considerable for us. The Blockstream round-table brought together major players, and we take a certain pride in having been selected in such a competitive environment. Neura, an Israeli company which uses machine learning to improve the data collected by connected devices, or Flyer, with its algorithm that improves pricing for volatile products, deserve to be more widely known. Finally, Wellth, which exploits accurate readings of biometric data to direct users toward a healthier lifestyle. All this without being invasive or offering rewards to participants.
Author: Thomas Bastin
Translator: Simon McGeady
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