The public insurer is launching into venture capital, with a new fund: Ethias Ventures. Endowed with 20 million euros, the vehicle aims to encourage the growth of young Belgian nuggets in finance and insurance. And thereby fill a void.
Endowed with some 20 million euros for its debut, Ethias Ventures aims to be a key element of the insurer’s growth strategy in the future. Born from a reflection of just over two years, the new investment fund intends to select and support young technological nuggets in the world of finance (fintech) and insurance (insurtech) in the flat country, and even among our neighbours, towards new horizons. One support of around one million euros per case is planned, with the acquisition of both majority and minority stakes.
“We aims for around four to five investments per year“, informs us Joris Laenen, chief investment & life officer, met in Brussels. “The idea is to allow start-ups, which have already a product to showto move into the growth phase on the one hand, while allowing us in the process to access complementary technological solutions to offer to our customers (nearly 1.2 million individuals for more than 46,000 professionals, editor’s note) d ‘on the other hand’, engages Nicolas Dumazy, chief strategy & data officer and president of Ethias Ventures.
“It’s a win-win between support for its growth for a start-up and an opening for us to complementary technologies to offer our customers.”
To support vehicle activity, the third largest life and non-life insurer on the Belgian market will be able to count on a team made up of three innovation managers and a corporate finance specialist. In addition, Ethias Ventures will obviously be able to rely on theexpertise of the entire Ethias groupwhich encompasses, beyond the core business of insurance, the IT service provider NRBthe 100% digital insurer Florathe consulting firm Ethias Servicesthe multi-employer pension fund Ethias Pension Fundas well as the 24/7 assistance service Ima Benelux.
While no investments are yet to be announced so far, some 50 cases are already being analyzed internally, the team tells us. A number that is set to increase rapidly: the insurer indicates that it is organizing a “pitch day” on February 15thfrom which five projects will be selected for close discussion.
Ethias is not the only player to have rushed into the “corporate venturing” niche.
Large structures are making start-ups their new center of innovation. A booming phenomenon, but not without risks.
Note, Ethias is not not the only actor to get engulfed in the niche of what is more commonly called “corporate venture“, in the jargon. Other large Belgian companies also have a venture capital arm: Solvay (Solvay Ventures), Bekaert (Bekaert Venturing), UCB (UCB Ventures), AB InBev (ZX Ventures) or the global pipe giant Aliaxis (Aliaxis Ventures) are some examples. According to an initial study on the subject by Roland Berger, 45% of Bel 20 companies had made this practice their daily practice in 2019.
“None of the funds that exist on the sole theme of fintechs and insurtechs had until now Belgium as their main area of activity.”
As for the support for fintechs and insurtechsit should however be noted thatnone of the funds that existed up to now on this theme alone had for main area of activity Belgium“, says Joris Laenen. For the flat country to be the first playground, it is necessary, in fact, to turn to players who cover fintech, of course, but not only. We are thinking here in particular of Smartfin Capital, born around including the pioneer of the fintech scene Jürgen Ingels and whose second vehicle is endowed with some 240 million euros from entrepreneurs such as Jonas Dhaenens (Combell), Jan Toye (ex-Palm), Jos Sluys (ex-Arinso) , Jan De Clerck (Domo Investment Group) and Marc Coucke (Alychlo).
Moreover, the other initiatives that exist around the insurance and finance sector rely more on more mature companies. We can cite here the Belgian investment fund Ergon Capital, born in the bosom of GBL, which got its hands on one of the largest independent insurance brokers in Belgium, Allia, in November, with the idea of playing a in the current wave of consolidation in the market.
What is corporate venturing?
Traditionally, “corporate venturing” involved an established company taking a stake in the capital of a start-up. Originating in the 1950s, this practice had only one financial purpose.
In recent years, the majority of companies embarking on the adventure have chosen other forms of cooperation: acquisition of products or services, collaboration on an innovation, granting of advantages (offices, infrastructure, etc.). We then witness the birth of a real partnership around a common strategic objective: to survive.