Co-investment and Co-innovation with VCs: A case study on MetLife
How MetLife leverages VC partnerships for tech innovation.
Key takeaways
Metlife’s digital accelerator has executed 75+ POCs and achieved commercialization in 30 such investments.
It operates its digital accelerator by partnering with leading VC’s in the Silicon Valley.
The co-investment approach enables them to access new ideas solving their specific needs without having to build the team, expertise or infrastructure needed to source deals.
The model of working alongside an experienced VC allows corporate strategists to find great talent and align internal business goals with emerging technology opportunities.
Metlife is a 150-year old global life insurance company. Co-innovating with VCs using co-investment has helped MetLife scale into viable enterprises and become strategic partners.
They introduced MetLife digital ventures and MetLife digital accelerator, two partnerships that accelerate transformation through investment in start-ups bringing new forms of value to MetLife’s customers. Through such investment, MetLife has an opportunity to influence the direction of these early-stage companies that offer products and capabilities strategically aligned to their growth.
Corporate-VC partnerships: A powerful combination
According to McKinsey, co-investments have doubled from $45 billion to $104 billion since 2012 while direct fund investments have remained relatively stagnant. As more corporations and VC’s recognize the benefits of co-investment opportunities, we can only expect this trend to continue.
Co-investment is a minority investment made by investors alongside a venture capital firm. It enables corporates to participate in investing rounds of innovative start-ups building disruptive products in their industry.
MetLife’s approach to co-investing and co-innovating
MetLife’s has created a $100 million co-investment fund, MetLife Digital Ventures focused at accelerating transformation through investment in start-ups. Through such investment, MetLife will have an opportunity to influence the direction of these early-stage companies offering products and capabilities strategic to the organization.
The launch of MetLife Digital Ventures brings to the next level MetLife’s existing strong relationships with 17 of the leading venture capital firms. These long-established relationships continue to provide MetLife unique access to top-tier co-investment opportunities.
Till data, MetLife has invested $1 billion across 17 VC’s to capture market trends in industry innovations.
Conclusion
MetLife’s model is a good case study on embedding innovation in your organization through partnerships. Start-ups give them access to innovation and VC’s expertise in deal sourcing and due-diligence takes the hard part off the table.
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