Q&A with Tarik Galijasevic, managing director, Allstate Strategic Ventures
Tarik Galijasevic is managing director for Allstate Strategic Ventures (ASV), a strategic corporate venture capital (CVC) arm of US-based insurer Allstate Corporation.
“ASV is a strategic CVC investing off the balance sheet of Allstate Corporation. We are measured by both the strategic engagement of our portfolio and on a financial basis by a risk-adjusted rate of return,” according to Galijasevic.
Suren Gupta, executive vice-president and head of Allstate Technology and Strategic Ventures, said: “Tarik has done a terrific job leading Allstate Strategic Ventures for more than five years. As our industry continues to evolve, we are executing our Transformative Growth Plan to expand customer access, improve customer value propositions, and increase investment in growth and technology. Tarik and his team have played a key role not only in identifying and investing in startups that help us achieve our growth initiatives, but by bringing in outside knowledge into the enterprise to support our strategic priorities.”
1. Highlights from the past year
Our team did not miss a beat at the onset of the covid-19 pandemic. We reviewed over 1,200 deals and completed a number of new investments, as well as follow-ons. In fact, we expanded our mandate, which among other things includes leading deals that give us more control and input around key deal terms.
I am extremely proud that every one of our portfolio companies adapted and grew over the past year. From the beginning of the pandemic, we worked closely with management teams overseeing our portfolio companies helping them evaluate every aspect of the business, make decisions with short and long-term goals in mind and ultimately manage capital efficiently. Many of our portfolio companies have raised new capital at improved valuations.
Over the past year, our engagement with internal business units has grown tremendously as our business partners leveraged our external relationships and access to new technologies. Our team expanded the use of Startup Engagement days averaging more than once a month.
We bring a highly filtered group of startups relevant to a particular business unit – typically four to six startups – and invite key leaders from the business unit to participate, ask questions, and grade each startup. Afterwards, we assemble feedback and coordinate follow-up discussions. This process has led to several investments and proofs of concepts (POCs), and we plan to expand even further.
2. Strategic and Leadership measures
Any examples of corporate acquisitions of portfolio or venture-backed companies:
We do not intend to acquire any of our portfolio companies when we make an investment. In addition, our portfolio is still relatively new, and we have not yet had a situation where Allstate has considered acquiring a portfolio company.
Business unit partnerships and development with portfolio companies:
I am pleased to say that we do not have any “orphaned startups” in our portfolio. Every portfolio company has – or is in process of finalising – an active engagement with one or more Allstate business units. Strategic engagement with our business units is the essence of ASV.
Product or strategy roadmaps and public leadership position in conferences and associations:
We sponsored a number of conferences and actively participated as keynote and panel speakers at a number of events. In addition, this past year we were pleased to be both a sponsor and active participant in GCV’s development of a curriculum to teach CVC skills. We fielded a team from Allstate to participate in the first course on business development, and one of my senior team members served as a mentor in the programme.
3. Plans for the year ahead
We just closed our first two investments at the end of the first quarter and have a strong pipeline in the year ahead. We expect to meet or exceed five to eight new investments this year, including a number of investments we will lead.
4. Milestones achieved at your unit
In 2020, Allstate senior leadership helped streamline our governance process, allowing us to operate faster as new opportunities emerge with short timeframes.
5. Pain points and opportunities you have encountered in corporate venturing
CVC with a strategic focus will always be challenged by the speed in decision-making when compared to our counterparts that do not focus on the strategic side. It takes time to identify the right business units and then assess the potential strategic impact of a commercial relationship. In order to accelerate the process, our team led an initiative to shorten the cycle time for POCs from one to two months. This has helped us make faster decisions alongside streamlined investment processes. In the past year, our team managed over 25 POCs, several of which resulted in investments or potential future investments.
A great opportunity for us is to find a top-tier startup with relevant technology and match them to a team at Allstate that needs to solve a problem. When we make that connection, we can achieve challenging goals at Allstate, we benefit from an efficient business partner, while the startup benefits from a top insurance industry partner that can help the development of their technology or product. Strategic success drives financial success.
6. What do you think all corporations could do better to make it a stronger industry?
I believe that a corporate venture capital unit is a strategic imperative for a major corporation. One company cannot achieve everything independently. Showing the value that CVC units can bring to the broader enterprise is critically important. If investing is done correctly, not only will the enterprise receive returns on the business side, but CVCs can generate meaningful returns above the risk-adjusted cost of capital. It is an added benefit if companies can integrate what they have learned from CVCs into their broader strategic decisions.
I would also like not only to see continued growth in the number of active CVC units but growth in the number of investments and investments made in partnership with other CVCs. That could be a big win for all.
7. For colour, what did you do prior to your venture role or in your spare time?
I started my career at JPMorgan’s Investment Bank where I focused on private equity, mergers and acquisitions, and capital raises in the transportation and consumer goods sectors. Over the course of my career, I have executed more than 40 transactions, surpassing $30bn.
I’m a native of Sarajevo, Bosnia and Herzegovina and moved to the Chicago area in 1995 to continue my education. I hold an MBA with concentrations in entrepreneurship, finance, and international business from the Illinois Institute of Technology’s Stuart School of Business and a bachelor’s degree in civil engineering from the Illinois Institute of Technology.
In my spare time, I enjoy traveling, reading, skiing, and spending time with my wife and two children. As I have said before, one positive thing that emerged from the pandemic is that it provided me with extra time to spend with my children and be in a position where I can put them to bed every night.
