Digital transformation is cited as a strategic imperative across many established corporates. CVC investment can be used to support this strategy, ensuring the period is characterised by growth rather than transformation alone.
Allianz, with a history dating back to 1890, has committed to becoming “Digital by Default” as the second pillar of its Renewal Agenda. Under CEO Dr Nazim Cetin, this led to its digital investment arm, Allianz X, shifting focus away from early-stage companies, increasing investment size, and targeting investment at the best digital frontrunners that are strategically relevant to the Allianz Group as a whole. That being said, generating tangible, strategic change when dealing with a global organisation (sporting a net income of €7.7bn in 2018) is a challenge.
In March 2018, Allianz led the $160m Series C funding round in German Fintech N26 alongside Chinese internet giant Tencent Holdings. This investment strengthened their partnership with the mobile bank, taking advantage of N26’s platform as a channel to support their digital transformation. This grew the presence of Allianz’s digital products, particularly with Millennials. As it stands, the worldwide travel insurance, from Allianz, is packaged for N26 customers who sign up for Metal accounts. Allianz stands to directly benefit from N26’s growth and international expansion, which has already included launches into the US and UK markets.
Allianz stands to directly benefit from N26’s growth and international expansion, which has already included launches into the US and UK markets.
Then in July 2018, Allianz invested $59m in Boston-based telemedicine company American Well, leading its $290m corporate round alongside Philips. Their strategic partnership will focus on the development of digital health solutions which combine, “wearable sensors, remote monitoring and virtual visits”. American Well already provides millions of patients in the US with secure video access to a suite of doctors, specialists and other healthcare providers. The vision for the future is being able to digitally provide high quality and accessible healthcare to patients across developed and developing countries alike, 24/7. By combining their global market expertise and partnership network with American Well’s technology platform, Allianz is taking clear steps towards its goal of becoming a, “simple, digital and scalable organization that is fully customer-centric”.
Allianz has demonstrated a cohesive CVC investment strategy which actively furthers their digital transformation and growth in several important markets and segments.
Digital transformation has proved itself as a core CVC investment strategy, and when companies are trying to move into different markets, it’s definitely worth considering. Ultimately, it’s a strategy that all businesses need to devote serious resource to, whether they’re venturing or not. Once your competitors are offering products and services you’re only thinking about, it’s probably already too late to win those customers back.