Global Corporate Venturing Rising Stars Awards 2018: Russell MacTough

Having joined Liberty Mutual Strategic Ventures (LMSV) ahead of its launch in mid-2016, Russell MacTough has been singled out for a second consecutive year as a GCV Rising Star by his peer and co-managing director Dan Robinson.

Speaking of MacTough, Robinson said: “Russ brings a lot of knowledge to the corporate venture community, especially within fintech and insurtech, and is becoming one of the leading voices in the space.

“He has a great balance of understanding what’s happening internally as well as in the market: not only has he been driving the deal side, but he has also been a great leader and has focused on developing a strong team to prepare the next wave of corporate venture rising stars.”

As a founding member of LMSV, MacTough largely contributed to shaping the firm from its early days. “At the time we started, there might have been only one or two CVCs active within the insurance sector, and so it was important to set things up the right way from the very beginning,” he said.

“I was a newcomer at Liberty, and so establishing my credibility with company executives was really critical, especially during the first five to six months.

“Thankfully, the network I had built prior to joining the firm enabled me to jump back into relationships straight away and accelerate things.”

Out of the six portfolio companies currently held by LMSV, five came from his extended network, MacTough said. Prior to joining the insurance venture firm, the managing director served almost two years as vice-president of fintech-focused investment bank Morgan Partners, having previously spent six years at Silicon Valley Bank, first as director and eventually as founder and head of the firm’s CVC advisory services.

Launched in May 2016 as a $150m early-stage venture fund focused on “the intersection of innovative technology services and the insurance industry,” LMSV got off to a fast start, with six investments closed in just over a year.

MacTough said: “It took us a long time to close our first deal [August Home] but I think it was the right way to do it. We had to get our story straight, and make sure we had had enough of a lookout for the right company to invest in.

“Establishing our credibility with that first investment was key – the goal was to show everyone that we were good at sourcing, evaluating, negotiating, and that we really knew where we were going.”

Other investments rapidly followed, with Notion ($3.2m, seed round with XL Innovate) and Snapsheet ($20m, series C led by F-Prime Capital and IA Capital Group).

As of September, LMSV had closed three new deals in 2017. In May, the firm took part in a $12m series B round led by existing investors YL Ventures and Fontinalis Partners in Karamba Security, specialised in cybersecurity for connected and autonomous vehicles.

In June, the CVC contributed to a $12m A round for US-based home services management platform Dispatch led by Gradbanks Capital and ServiceMaster. And in early September, it joined Daimler and SK Holdings, as well as a number of venture partners in a D funding round of $92m for car rental startup Turo, based inSan Francisco, California.

At present, MacTough is sitting on the boards of three out of six portfolio companies, Karamba, Dispatch and Snapsheet.

Karamba, which services clients both in the US and Israel, and therefore has bases in both countries – one in Hod Hasharon, Israel, and one in Ann Arbor, Michigan – marked LMSV’s first investment in a foreign company, testifying for its will to begin evaluating international opportunities.

With parent Liberty’s operations currently spread around 17 to 18 countries, the firm will now focus on how it can leverage its international footprint, aiming to try and globalise investments and take things beyond the US.

“The deals we have closed and are about to close are a big notch in our belt for our strategy,” said MacTough. “In 2016, we were focused on a different market, and we now have turned our attention towards a few other areas we wanted to cover.

“Our portfolio feels well-rounded at this stage, which gives way to an exciting year ahead.”

Assessing LMSV’s progression over the last two years, the managing director said part of the firm’s success could be attributed to the balance existing between him and co-managing director Robinson: “In CVC, it is important to have transaction expertise, so that you know the rules of the industry, but it is also important to have a subject matter expertise and internal credibility.

“In our case, Dan brought the latter, as he has been at Liberty for around 12 years, and so knows everybody within the business and has a deep understanding of the insurance sector.

“Meanwhile, I brought the other side of the equation, as I came on board with an extensive network in CVC. This means we have learnt from each other and balanced each other out, and complement each other very well.”

According to MacTough, the two things that the CVC industry should pay particular attention at present are, on one hand, the extreme need for transparency – about intentions, expectations – between investors and entrepreneurs; and, on the other, the risk of soaring valuations at a time when “a lot of corporate money is flooding into venture”.

In future, the managing director wants to place a prime focus on developing new talent within his team, helping more junior people grow and become successful professionals in the venture industry. “Whichever way it goes from there, I do not think too much about it right now,” he said. “It is always good to have a destination, but you do not have to plan every single step between there and now – life throws a lot of curved balls at you.”

Outside CVC, MacTough puts a lot of care into being a good husband and dad, and being present for his family – a way of “not getting too wrapped up in what I do, and keeping myself base-lined,” he added.