American Family Insurance (AmFam) is a Fortune 500 private insurance company known for being incredibly innovative. When Highline Beta, a hybrid corporate venture studio and venture capital firm first started working with AmFam, it had a sophisticated innovation team of more than 20 employees validating and building new internal ventures.
Its venture capital fund, American Family Ventures, was actively investing in top-tier startups, including Life360 (IPO), Ring (acquired by Amazon), and CoverHound (acquired by Brown & Brown).
AmFam engaged Highline Beta to focus on identification and validation of new business concepts, spinning out beyond the core. This process happened while leveraging AmFam’s technology assets, industry network, and domain expertise.
Over the course of several months, Highline Beta and AmFam explored a wide range of different insurance-related opportunities.
Through this discovery process, Highline Beta aims to validate customer problems, value propositions, and market segments and ideate solution concepts. One of the pathways focused on the use of blockchain technology and the implications it could have on the insurance industry. Because it was a newer technology, it made sense for AmFam to leverage an external venture studio and focus on the potential of identifying new startup spinouts.
After our initial discovery process, we had more than 10 venture ideas to pursue. We continued to narrow our focus by continuing validation, conducting user research, building and testing prototypes, and digging into where the data showed the largest opportunity existed for launching a new startup.
Our work led us to the reinsurance industry. Part of the benefit of collaborating with corporate partners is that you’re able to identify meaningful problems that you otherwise wouldn’t see from the outside. And that’s precisely what happened with AmFam. We were able to identify and validate pain points that hadn’t yet been solved in the reinsurance industry, with AmFam as a key partner and customer. Through a process of rapid iteration and testing, we were able to create a focused platform that aimed to solve widespread problems in the reinsurance industry.
This led to the creation of a new startup, Relay Platform.
Venture studios are designed to share the risk with corporate partners and lead pre-seed financing rounds with conviction around the work and validation that was done.
Over six months, the Highline Beta Venture Studio team built the first minimum viable product in close collaboration with AmFam. In that process, we recruited the CEO and founder, Greg Boutin, who came to us with deep enterprise consulting experience. We co-invested alongside AmFam through our venture capital fund, which in our view is an essential part of the venture studio model. Venture studios are designed to share the risk with corporate partners and lead pre-seed financing rounds with conviction around the work and validation that was done.
AmFam played a key role in the success of Relay, by helping us quickly validate the problem and solution, and connecting the startup to other partners and customers.
Collectively, we were able to accelerate the creation of a new startup in an opaque and complex industry with the right team, an initial product, financing, and early customer traction.
Boutin said, “The beauty of this startup creation process is that it cut the initial exploration and MVP development work by 1-2 years. In a model like this, having two experienced partners on each side gives us the perfect quarterbacks to supercharge our growth.”
Less than one year after launch, Relay raised a $2 million seed financing round (and then a subsequent $5 million financing round.) One of the lead investors in the seed round was NFP Ventures (now called Distributed Ventures), the venture capital arm of leading property and casualty broker NFP.
Relay has gone on to iterate and expand on its offering, with a solid foundation of industry connections and expertise initiated through the venture studio model.
Relay’s origin story, as a startup spinout from American Family, gave it the credibility needed to break into a challenging, often slow-moving insurance and reinsurance market. And Highline Beta’s venture studio provided the methodology and muscle to iterate, validate and build the product quickly and effectively, with funding and mentorship to accelerate growth.
Highline Beta is an InnoLead strategic partner, and one of the supporters of our initiative on Venture Studios & Venture Builders.