In an effort to expand its digital offerings, Northwestern Mutual Life Insurance has reportedly created a $50 million corporate venture capital fund designed to back startups in the FinTech market.
According to a report by Reuters, the move is the latest in traditional financial firms creating venture funds to invest in FinTech companies. Larger financial companies are rushing to find ways to keep up with the changes coming to the industry thanks to digital offerings. Reuters noted the new venture fund, called Northwestern Mutual Future Ventures, plans on investing between $500,000 and $3 million in FinTechs that help consumers reach financial security. The fund is focusing on digital health services, analytics and client experience, reported Reuters.
In 2015, Northwestern Mutual acquired LearnVest.com, which provides financial information and advisory services, and this new fund builds on that acquisition, said Rebecca Porter, vice president of corporate strategy at Northwestern Mutual and chairwoman of the investment committee for the new fund.
“We want to continue that momentum and continue to invest in startup companies,” Porter said in the Reuters report. “We are looking for innovative companies that are going to address clients’ need in a new way.”
Northwestern Mutual is also a financial backer of robo adviser Betterment, which provides digital ways for consumers to save. For FinTech startups, investments from corporate venture funds are increasing at a fast clip and account for a growing share of venture funding. Based on data from CB Insights and KPMG, Reuters reported in the third quarter of last year, corporations took part in 30 percent of all VC-backed FinTech deals on a global basis.