Fund in the News: AXA Strategic Ventures

AXA Strategic Ventures, the corporate venturing fund recently launched by France-based insurance and financial services provider AXA was the end result of a pilot process that began in 2012, according to the fund’s chairman Francois Robinet.

The unit is equipped with €200m ($211m) in capital and, as its name suggests, will act strategically, targeting startups developing insurance, asset management, healthcare service and financial technology.

AXA Strategic is meant to connect with the company’s broader digital strategy, which involves investment in digital information and data analytics, and the establishment of AXA Labs, a Silicon Valley-based unit tasked with detecting emerging digital trends and launching digital initiatives. However, the company perceived there was still a missing element in the strategy involving external innovation.

“So three years ago we [launched] what I would describe as a pilot, ”Robinet explained. “We set up a small fund linked to our French business, AXA France, which is the largest entity within the AXA Group – and also diversified, so there is [access] to health, life, a corporate business, group business and individual business – and the fund invested at seed stage in startups in the French ecosystem.

“The fund was only €10m [in size] and the idea was to see how it works. The initiative has worked quite well in that we have been able to find some good opportunities and identify some very interesting startups that are relevant to our business, and we have been able to close deals with these startups, so from that point of view it has worked well.”

The fund invested in six France-based data and fintech startups and now intends to apply the experience garnered through the fund on a wider stage through AXA Strategic, which will be stage-agnostic and invest internationally.

“We will be looking at all stages of development for companies,” Robinet said. “The fund [that invested] in the French market was small, and therefore focused on seed and early-stage investments. AXA Strategic Ventures will invest at all stages – early stage and seed but also at a later stage for venture and growth [investments].”

Although precise investment strategies will differ from market to market, the unit will typically invest less than $1m at seed and series A stage, and up to $5m and more for later stage rounds, Robinet added. The initial capital is expected to be fully invested within a three-to-five year period.

Portfolio companies will be given the chance to form commercial links with AXA but, despite its strategic focus on areas important to AXA and its place in transforming the corporate’s digital strategy, AXA Strategic will be run as a straightforward VC fund, separately to its day-to-day operations.

“Although it is not part of the operating entities, we want there to be a linkage and a commercial relationship with them because we believe it is part of the value in the proposal we can offer to the startups,” Robinet said.

“It is a question of focus; my colleagues that run the insurance business on a day-to-day basis – that is their job and it cannot also be part of their time to work with startups, talk with them and select the right one. There is a dedicated team doing that. But, at the same time, the team will make sure that where it is relevant to have commercial relationships with some of [AXA’s] operating entities, we will have those relationships.”

A key element of forming those commercial relationships will revolve around using AXA’s global presence to help its portfolio companies expand internationally, and a big impetus behind the formation of AXA Strategic was to capitalise on dealflow outside of France, which will lead it to investments in the US and, in time, the rest of the world.

“The idea is to capture innovation where it happens,” Robinet said. “So the US and Europe, and we intend to expand very soon into Asia, to have real global deployment.

“It is true the US market is clearly very active in terms of startups and innovation – it is probably the most active market in the world – so it is reasonable to expect that a significant part of our investment will be realised in the US, but we have not defined a pre-determined allocation. It is going to be decided on a case-by-case basis, though we will try to have some balance between the different regions.”

– Photo of Francois Robinet courtesy of Business Wire