Blog Post
Taking it to the next level, together: Allianz X’s winning strategy
There are venture capital firms, there are private equity houses, there are alternative investment providers — and then there’s Allianz X, the digital investments arm of the Allianz Group. But that definition just scratches the surface. Allianz X is not just about achieving the highest possible returns by investing in leading, or up-and-coming digital pioneers. It’s also about creating sustainable added value for its portfolio companies, driving collaboration with Allianz entities, and — as announced at the Group’s recent Capital Markets Day — providing third-party limited partners (LPs) with a trustworthy partner for alternative investments.
In this way, Allianz X is a business developer, a consultant, an asset manager — a true long-term investor. We’re pushing the transformation and digitalization of the ecosystems around insurance and asset management. Our portfolio companies, as top players in insurtech and fintech, are key to that Herculean task.
The companies that interest us are mature, growth stage start-ups — also known as scale-ups. In general, they should at least be on their Series C round and, importantly, have already overcome the first hurdles in their development. Basically, a proven business model with revenues in at least the double-digit-million range and a clear growth path are a must for us.
“What drives us isn’t the ‘what was’ or ‘what is’. It’s the ‘what if?’. Make the ‘what if’ your North Star, see the big picture, and shape the world. That aspiration will lead to success. We don’t compromise on that, and neither do the winners we invest in. That’s why they’re not just investments, they’re partners.”
Dr. Nazim Cetin, CEO of Allianz X
For founders today, with plenty of liquidity chasing quality assets, it’s relatively easy to find investors. In most cases, however, founders are not just concerned with the cash, but also the other benefits of potential partners. And therein lies the strength of Allianz X. As part of the Allianz Group, we have far more to offer than many other investment firms: from international contacts and access to new markets, to product cooperation and broad expertise. As well as being an investor, we see ourselves as a strategic partner and facilitator that brings value and builds success.
“With our partners, we strive for the goal of building something bigger together, winning together. Naturally, we want a great return on investment — always — but we also look at the big picture and take a long-term view.”
Catherine Dietrich, CFO of Allianz X
Allianz X currently manages over 2 billion euros of assets. It’s an enormous sum. If you counted to 2 billion, saying one number per second, it would take you over 63 years. However, that amount is still small in comparison to the Group’s overall assets under management (AuM) of an astounding 2.6 trillion euros — most of which is 3rd party money managed by AllianzGI and PIMCO.
Nonetheless, we punch well above our weight. Our team of around 40 people delivers extraordinary returns and revenues that are on par with some of Allianz’ biggest entities with thousands of employees. We have direct investments in over 25 companies on four continents that all have one thing in common: They’re hand-picked by us. Here are a few examples.
Insurtech and fintech: the digital future of insurance and asset management
WeLab is a technology start-up based in Hong Kong, in which we’ve invested 75 million US-dollars. It taps into the virtual banking and online lending market in China’s Greater Bay Area, which has a population of over 70 million people and contains such cities as Hong Kong, Guangzhou, and Shenzhen. Through WeLab, Allianz gains access to a huge market with tremendous potential for the Allianz Global Investors product range. AllianzGI’s products are directly integrated into the WeLab Bank app.
Pie Insurance, so-named because “insurance should be as-easy-as-pie”, is a provider of workers comp insurance to small and medium-sized enterprises (SMEs) in the US. Its extraordinarily comprehensive data set and data analytics capabilities allow it to price insurance accurately and fairly, which gives it an edge over its competitors. Since our investment, Pie is working together with Allianz Global Corporate & Specialty (AGCS) and Allianz Reinsurance (AllianzRe) to expand its business, as well as cooperating on sales and product development.
Wealthsimple is a financial company on a mission to help its customers achieve financial freedom by providing products and advice that are accessible and affordable. Using cutting-edge technology, Wealthsimple takes financial services that are often confusing, opaque and expensive and makes them simple, transparent, and low-cost.
CLARK offers insurance advice to retail customers by enabling them to collate their insurance policies in a digital wallet, then analyzing and optimizing their coverage by comparing tariffs from different insurance companies. Allianz X recently did an equity swap with CLARK, exchanging our wholly-owned portfolio company finanzen Group for cash and equity in CLARK, making us its largest shareholder. The two companies complement each other exceptionally, with finanzen generating financial services leads and CLARK brokering insurance.
BIMA is a leading digital microinsurer that operates in developing countries in Africa and Asia. We have been its largest shareholder since we invested almost 100 million US-dollars in 2017. BIMA uses highly scalable technology to provide individuals and families in emerging markets with vital insurance products that they cannot access through traditional channels. This investment and the resulting cooperation between BIMA, Allianz Africa, and the German Corporation for International Cooperation (GIZ) prove that it is possible to create both social and financial value at the same time.
Allianz + unicorn = win-win scenario
In addition to financial engagement and product networking, our portfolio companies also benefit from the fact that they cooperate with one of the world’s leading insurers and asset managers, making their business interesting for the capital markets.
“We want to scale with our portfolio companies, contributing the necessary growth capital and leveraging the assets and capabilities of the Group, in order to create market leaders, one after another, like a conveyor belt of digital winners.”
Carsten Middendorf, Head of Platforms and Acquisitions at Allianz X
Smart investments and the facilitation of complementary business partnerships are the focus for us at Allianz X. We are convinced that, in this field of competition, technology, and creativity, we will continue to succeed in developing digital winners and contributing to the success of Allianz’ digital strategy. In that way, Allianz remains an innovation leader in the industry and our portfolio companies have, in turn, a powerful partner at their side. That’s a real win-win.
For more on Allianz X, follow us on LinkedIn, Twitter, and Medium, and check out our website at https://www.allianzx.com.
