The American insurance company Prudential has its eye on new companies in Latin America and Brazil. Through PruVen Capital, a venture capital asset manager created in late 2020, it has been evaluating businesses linked to innovation in the areas of insurance, asset management, healthcare, financial services, and technology.
With expected investments between $5 million and $10 million, PruVen is currently analyzing three startups in the region. The targets are operations able to catalyze changes within the group itself and that are “more or less consolidated for series A investments,” says Erick Kluft, head of strategy and risk at Prudential Financial in Brazil.
“We look for companies that, besides financial return, have some synergy with the group, that can contribute to growth, whether in products, distribution, new methods or operational control processes,” says Mr. Kluft. The idea is to have no more than a 30% stake in businesses that have already been tested in some way and have the potential to become “iconic”.
Prudential started to target businesses complementary to its core activity, with the intention to orbit in the world of innovation, in 2019, when the group’s leadership changed. It attracted as a founding partner to PruVen Ramneek Gupta, one of Robinhood’s angel investors, and who was for nearly a decade head of venture capital investments at Citi globally.
“We are very focused on services for small and medium-sized enterprises, especially insurance brokers. We believe that with more than 8 million such firms, growing at a rate of 660,000 new companies per year, there is a powerful opportunity to help those companies grow and manage their business with technology and tools typically available today only to the big guys,” says Mr. Gupta. “Couple that with the highly complex regulatory environment that small businesses face in Brazil and you have the ingredients for a substantial market opportunity.”
Mr. Kluft says that by the very nature of Prudential Financial’s business, the high interest rates in Brazil is unlikely to hinder investments in startups with proprietary capital. “The company has existed for almost 150 years,” he says. “It doesn’t think in the short term. Our work is to deal with life. I take care of my client from the first moment, when he needs a life insurance, until when he passes away, I’m there to close the cycle with his family.”
In Brazil, Prudential has been in business for more than two decades and is one of the leaders in the life insurance ranking. The group is present in over 40 countries and has $1.7 trillion in assets under management and over $4 trillion in capital insured.
Source: Valor international