EXECUTIVE SUMMARY

UNIQA Group launched its corporate venture capital (CVC) arm, UNIQA Ventures, in 2016 as part of the biggest renewal programme in the company’s history.

UNIQA Ventures invests in innovative business models driven by strong teams in order to gain insights into potentially disruptive technologies and to generate mutual benefits for UNIQA Group and its portfolio companies. As part of the course "Consulting FinTech Edition" this project's goal was to identify how organizational and operative aspects of UNIQA Ventures can be structured to maximize effectiveness.

Approach

Findings were generated in two steps. First, an extensive literature research set the foundation on how a modern-day CVC unit can unfold its potential. Then, the empirical analysis of CVC activities in the insurance industry and two analogue industries provided insights how a CVC unit can be implemented effectively. Complementary interviews were performed to reduce blind spots.

By assessing 130 academic papers as well as industry reports and analysing the CVC activity of 17 market participants with 177 individual investments, best practices in the areas of staff composition, compensation schemes, deal flow, governance and strategy were identified.

Results

Regarding staff composition, almost in all analysed CVC units, the largest group of operative employees has a corporate background, closely followed by VC specialists. On the one hand, corporate knowledge and internal networks are essential for strategic aspects. On the other hand, VC skills and external networks contribute to financial aspects.

For attracting and retaining top talent a CVC specific compensation scheme is needed. Besides incentivizing performance, compensation schemes must tolerate early failure and reward long term success. Well-balanced remuneration should combine individualized fixed salary contracts and financial incentives directly linked to the CVC unit’s success. Such a compensation scheme increases the exploration of new search fields and higher-value/higher-risk investment opportunities, which positively affects financial performance. In order to increase deal flow, high-potential entrepreneurs have to be attracted. This can be achieved by offering additional services through corporate resources and by creating an entrepreneur-friendly, collaborative and supportive environment. These activities need to be complemented by rich internal and external networks. From a management perspective, CVC units should guide portfolio companies and avoid taking over the managing role from the founding team. As accelerators and CVC units have different search fields, sourcing startup teams from a co-led or an in-house accelerator is very uncommon and less effective than assumed. In terms of governance, organizing the CVC unit as a legally independent entity is the most common approach in the analyzed sample of companies. Separation from the corporate parent allows greater flexibility (e.g. faster decision-making, CVC specific reporting structures), which is vital for CVC success. To increase the value added, a CVC unit should consider combining direct with indirect investments.

Cooperation Partner

• UNIQA Ventures GmbH
  Untere Donaustrasse 21
  1029 Vienna
  Austria

Contact Person

• Mag. Georg Ioannidis
  Nikolaus Wrabetz

Student team

• Maxim Lebedev

• Manjot Singh

• Rick Warling

• Markus Wlasto

Projektbetreuung

• Mag. Vinzenz Treytl

• Richard Olbrecht, M.Sc.