Q&A with Justin Smith-Lorenzetti, investment director, Intact Ventures
Justin Smith-Lorenzetti, investment director Intact Ventures, the corporate venture capital (CVC) arm of Canada-headquartered property and casualty insurance group Intact Financial, said: “Since launching Intact Ventures in January 2016, I have grown to a point where I manage the investment team for Intact Ventures, the $400m venture arm of Intact Financial Corporation.
“Dating back to being the lead analyst on deals in 2016 to taking full control of leading transactions in 2020, I have personally been involved in investing in 25 portfolio companies since our launch five years ago.”
Smith-Lorenzetti has managed over 20 transactions and reports to the fund’s managing director (MD) Karim Hirji while managing all the junior and intermediate team members. Post-investment, he is engaged with the majority of the portfolio and currently manages seven board relationships on behalf of the fund.
1. First, just give us a quick overview of who you work for, what you do, and how long you have been doing it.
I work for Intact Ventures, the CVC of Intact Financial Corp, which is one of North America’s leading insurers and Canada’s largest. I lead the investment team and oversee all of our research, deal sourcing, and deal making and work with our MD on portfolio management and strategy development. I have been with Intact Ventures since our launch in 2016 and, as one of the two founding members, have been involved in all of our 20-plus investments for over $250m in the last five years. We can lead rounds, invest globally, and are active in assisting our portfolio companies in their growth trajectory.
2. What attracted you to CVC?
My entry into CVC is quite unique as I was offered the opportunity to join my MD and start with a completely blank slate in 2016. We started by identifying trends that we believed to be disruptive in the long-term to property & casualty insurance, which we have updated seemingly hundreds of times in the last 5 years. So, what attracted me initially was the opportunity to build something new from the ground up and what keeps me engaged is the opportunity the help founders do the same. The mix of combining our deep industry experience with the ability to leverage our corporate partner to build new solutions to accelerate our portfolio companies continues to be the best part of the job.
3. What have been your greatest successes at your unit?
We are still early! The most obvious answer is to mention some of the higher-profile deals we have been part of like Metromile or Turo in the US or Acko Insurance in India, but I think the greatest impact we have had is the influence we have had on some of our direction internally. On top of making deals, our team is often the entry point for any start-up or tech company to begin engagements with Intact Financial. Since our launch, I believe we have been impactful in changing the way our corporate engages with younger companies, while also becoming a little more aggressive in experimenting with new concepts, which is highlighted by an artificial intelligence lab in Hong Kong in 2019, which has been managed by the Managing Director of Intact Ventures.
4. What have been your biggest challenges?
Like any CVC getting off the ground, we faced some growing pains and dealt with a steep learning curve. Mainly, and common to CVC, the constant recalibration of prioritizing financial gain and strategic return and deciding how to do both well. Secondly, finding our sweet spot when it comes to determining the perfect investment for Intact Ventures – we know it now, but it took some time and deal making to get here.
5. What is your main professional ambition for the future?
Simply put, I want Intact Ventures to be the go-to venture fund for everything insurance-related and be a strong partner to all start-ups that are insurance adjacent. After launching our second fund in early 2020, I cannot wait for Intact Ventures III, IV and V.
6. What do you think all CVCs could do better to make it a stronger industry?
Shift from a defensive to an offensive strategy. Many CVCs invest with the idea of aligning themselves with disruptors in an aim to prepare the corporate partner for long-term disruption. CVCs should instead shift focus to driving this disruption and capitalizing on the upside that comes with it. If CVCs do not evolve their way of thinking, they will never be able to compete with traditional funds that push their founders the build high growth companies to displace incumbents. Put differently, CVC fund managers have to help accelerate their portfolio companies rather than use venture capital as an R&D function for the parent company.
7. And, finally, for colour, what did you do prior to CVC or in your spare time?
In my spare time, I run one of Canada’s quickest growing mental health foundations. In our first two and a half years of existence, we have raised over $1.25m for grassroots initiatives in the Canadian mental health arena. We have, of course, been slowed down by covid-19 as a lot of our financing came from events, but we continue to grow our sponsor base and contribute to the ecosystem north of the border.
