The insurance industry is not the only focus of the Madison, Wisconsin-based startup accelerator, gener8tor, but insurance is its oldest and largest operational sector.
Founded in 2012 by attorneys Troy Vosseller and Joe Kirgues, gener8tor seeks out startups from around the world and from diverse industries to participate in its programs. Initiated in Milwaukee and Madison, Wis., the company expanded to Minneapolis, Minn., last year and in 2018 will move into Cincinnati, Ohio. On average, five startups are selected to go through each accelerator program.
“We make a cash investment in exchange for a small portion of equity in those startups,” Vosseller said. The startups “spend three months with us, working out of our offices.” During that time “we’re connecting them with mentors, potential customers, corporate partners, as well as investors.”
So far, gener8tor has invested in 65 companies, which combined have raised “more than $150 million in follow-on funding,” Vosseller said.
The startups involved in the accelerators are largely technology-oriented, but when it comes to insurance they may not fit a conventional definition of an insurtech company — that is, one that works specifically within the insurance industry, like an aggregator, Vosseller said.
To Vosseller, the concept of insurtech is “broad. It’s any technology that can be enabling to an insurance carrier or provide insight even to an insurance carrier and their business, both their current business as well as emerging lines of business or future lines of business.”
When looking at insurance carrier venture capital activity Vosseller sees companies expanding their interests into what he calls “a horizontal set of technology.”
For instance, he said, Madison-based American Family Insurance, a company that gener8tor has worked closely with, recently made investments in two startups that Vosseller describes as “horizontal technology that’s still relevant to insurance, very much relevant to insurance, but they’re not insurtech proper.”
One such investment was in Networked Insights, a startup involved in “machine learning and artificial intelligence, really focusing on social media and gathering insights that could then be used for marketing purposes,” he said. The investment was made by American Family Ventures and the company subsequently was acquired by American Family Insurance.While not necessarily insurance specific, the startup’s focus has a “high degree of applicability to the insurance industry.”
Another example he cited was American Family Ventures’ investment in “Ring, the video doorbell. Again, not an insurance company themselves, but … they have a value proposition around home safety and preventing burglaries and things of that nature, very much relevant to insurance carriers,” Vosseller said.
He added that he thinks it’s a great time to be a startup interested in selling into the insurance industry. “There’s such a confluence of factors that are putting the wind at your back. The first is that there’s just been a tremendous rise in the amount of corporate venture capital activity, specifically with insurance.”
In addition, insurance companies are facing disruption as new technologies — like autonomous vehicles — mature and as interest in the industry rises with technology companies like Google, Facebook, Microsoft and Amazon.
Insurance carriers are “being proactive in terms of making sure that they’re part of that conversation when it comes to new technology,” Vosseller said.
Vosseller and Kirgues also operate the OnRamp Conference Series, which serves to further connect startups with investors and customers. The one-day events, staged in stadiums, grew out of gener8tor but are totally separate entities and are open to startups that have not gone through the accelerator program.
The OnRamp Insurance Conference was held on April 12 this year at Soldier Field in Chicago.
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