Podcasts

MassMutual Ventures’ Doug Russell: We want to become more innovative as a firm

  • MassMutual Ventures' Doug Russell first ran strategy and M&A at his firm.
  • He joins us on the Tearsheet Podcast to talk about corporate venture investing.
close

Email a Friend

We’re continuing on our series of interviewing top corporate venture capitalists in the finance industry to get their perspectives on where things are headed by looking at where they’re investing.

Today’s guest on the Tearsheet Podcast is Doug Russell, managing director of MassMutual Ventures, which began in July 2014 as a VC arm for the insurance giant. We talk about his experience as an operator before moving into a corporate investor role and how that influences his investment practice.

Subscribe: iTunes I SoundCloud

Below are highlights, edited for clarity, from the episode.

Why should an insurance company create a venture arm?
“The decision to start the fund arose from management’s focus on ways we could become more innovative as a firm, recognizing all the changes that are happening outside our business with respect to technology and customer expectation.

I had been in the seat as head of strategy and M&A and was fortunate to be asked to lead this effort. A year into investing, we realized that there was a tremendous amount of activity and really interesting deal flow, so I transitioned to move into the fund full time.”

Is there a value in having a lot of operational experience as an investor in insurance?
“In making a decision to bring on two partners to our fund, we identified two people with significant venture investing experience. With that came good reputations and history working with companies and other investors. Together with my background on the operational side, we felt we were building a very formidable team that would be viewed favorably in the entrepreneurial and investing worlds.”

How does venture investing fit into MassMutual’s objectives?
“Our $100 million fund has one limited partner, MassMutual’s general investment account. Our primary mandate is to generate returns in the top quartile of 2014 vintage funds. Our secondary approach is to generate strategic insights into the MassMutual ecosystem. We meet a number of companies as part of our work and even companies that don’t fit our investment criteria can get introduced into the MassMutual ecosystem.

We’re a large U.S.-based insurance company with an insurance, retirement, and asset management businesses. We have operating, distribution, technology, and cybersecurity teams. Our parallel mandate is to provide strategic insights through introductions and a quarterly discussion around the trends we’re seeing in the market.

Lastly, where it makes sense, we also enter into commercial relationships with our portfolio companies. About a third of our investments have entered into partnerships with us, but the primary mandate is still to drive investment returns.”

Give an example of a portfolio company.
“Check out Tuition.io. Think of it as a business that provides a 401(k)-like benefit for student debt repayment. It’s a match on student debt repayment by an employer. One of the great challenges in today’s market is attracting and retaining talent. The outstanding student debt has gone from a few hundred million dollars 10 few years ago to over a trillion dollars today. The average student has around $35,000 in debt. So, when you join a company that uses Tuition.io, it would have a benefit to student debt paydown match at a certain level over a few years.

We also invested in CyberGRX. It’s like an S&P rating of a company’s cyber risk. SMBs may not have the ability to assess the cyber risk of potential partners and this technology plays into the growing investment trend in defensive cyber capabilities.

We invested in PolicyGenius a couple of years ago. It’s a digital distribution business that can engage with customers in different ways and provide streamlined solutions across the insurance spectrum, beginning with term life insurance products. This is an example of an investment in a company that theoretically could compete with MassMutual but we see the potential of putting our products on their platform in the future.”

0 comments on “MassMutual Ventures’ Doug Russell: We want to become more innovative as a firm”

Finance Everywhere, Podcasts

Conductor sees big opportunity in Latin America for payments and banking as a service

  • Embedded finance is expanding all over the world.
  • Brazil's Conductor, fresh off a big fundraising, has big plans across Latin America.
Zachary Miller | December 03, 2020
Finance Everywhere, Podcasts

‘How to build a credit card product like a Lego rocketship’: Railsbank’s Dov Marmor

  • Dov Marmor has led banking as a service businesses at Currencycloud, Green Dot and now Railsbank.
  • The European embedded finance player is launching in the U.S. with a credit-card-as-a-service offering.
Zachary Miller | December 01, 2020
Podcasts

‘Combining our customer-first focus and local brand’: Inside Seattle Bank’s partnership with Google

  • Google's new bank accounts are being launched in partnership with banks around the U.S.
  • Seattle Bank, a community bank serving Puget Sound, is collaborating with Google to launch a new Google Plex account.
Zachary Miller | November 26, 2020
New banks, Podcasts

Building the Marcus brand: Goldman’s 2021 vision for its consumer banking product

  • Marcus by Goldman Sachs, Goldman’s consumer banking product suite, reached $96 billion in deposits in the third quarter of 2020.
  • Goldman will grow the Marcus product suite in 2021, encompassing checking, wealth management, savings and personal finance management.
Suman Bhattacharyya | November 25, 2020
Data, Podcasts

‘With Boost, we had to break things’: Experian’s Gregory Wright

  • Credit bureaus are moving along the value chain.
  • Experian's chief product officer joins the podcast to talk about lessons the firm has learned from Silicon Valley.
Zachary Miller | November 23, 2020
More Articles