Wisconsin venture capital funds look to young tech talent

Two relatively new Wisconsin venture capital funds are looking to young technology companies to supplement their various products and services.

Representatives of CUNA Mutual Group’s CMFG Ventures and Northwestern Mutual Future Ventures took part in a panel discussion Tuesday at the Wisconsin Technology Council’s Innovation Network luncheon, where they talked about how bringing in fresh ideas can help them better serve their customers.

CMFG Ventures has closed on six investments, investing close to $40 million starting about a year ago.

“The strategy of CMFG Ventures is to invest in startup companies in the insurtech and fintech space that can address the actual needs within either the credit union system, or within our own organization,” said Brian Kaas, president and managing director of CMFG Ventures.

CMFG Ventures looks to individually invest up to $5 million, and doesn’t usually go below $1 million, according to Kass. He said the fund will be investing $25 million over the next year in five to seven different companies.

NM Future Ventures came on the scene around four months ago, and has invested in four different companies, including financial planning startup LearnVest. Its initial investments range between $500,000 and $3 million.

Craig Shedler, venture partner for NM Future Ventures, says startups are gunning for the financial services industry because it’s the “last undisrupted segment of the economy in many respects.”

He says consumers are comparing their experience with companies like Amazon, Zappos and Southwest Airlines, and asking, “Why doesn’t my financial services institution work that way?”

“What these startups are trying to do is solve for that problem,” Shedler said. “And what we’re trying to do is figure out how we can respond, become more client-centric, and provide a much better experience to our clients.”

NM Future Venture’s portfolio is currently made up of companies from New York and California’s Bay area, but Shedler says the fund is “looking for the right opportunity in the Midwest.”

While CMFG Ventures’ attention is mostly on Chicago-area financial technology and data analytics companies at the moment, Kaas says: “We would love to support Wisconsin with the right investment.” But he added the firm is waiting for a company whose products or services “play into our strategy.”

Shedler says comparatively small numbers of qualified tech workers, as well as a risk-averse culture, contribute to the perspective that Wisconsin is a difficult place to get a startup running — but those hurdles aren’t insurmountable.

“I believe you can do it here… but that opinion still very much exists out there,” he said.

–By Alex Moe
WisBusiness.com