CMFG Ventures, an arm of CUNA Mutual Group that supports fintech and insurance technology startups, says it led a $10 million Series A investment in Chicago-based ForeverCar, which helps users purchase extended vehicle warranties.
Madison, WI-based CUNA Mutual provides insurance and financial services to its member organizations, many of which are credit unions. According to company materials, CUNA Mutual works with 95 percent of the country’s credit unions.
CMFG Ventures was established following the appointment of Robert Trunzo as president and CEO of CUNA Mutual in 2014, says Brian Kaas, who leads CMFG Ventures’ three-person team as managing director.
“[Trunzo] and other senior leaders made a substantial commitment to bringing innovation to CUNA Mutual and making substantial investments in our own technology,” Kaas says. “As part of that, we established a venture arm within CUNA Mutual as a component of our commitment to innovation.”
CMFG Ventures made its first investment late last year and has made four more investments since then, Kaas says. Besides ForeverCar, the portfolio companies CMFG Ventures has named publicly are: Chicago-based Cumulus Funding, which allows users to take out loans in exchange for a portion of future earnings; SmartAsset, which is based in New York and assists customers with making personal finance decisions; and Irvine, CA-based SpringboardAuto.com, which has developed technology to help users find auto loans.
CUNA Mutual did not mention CMFG Ventures in a February press release announcing the SpringBoardAuto.com investment. CMFG Ventures has mostly been under wraps until this week, when it and leaders of its portfolio companies gathered for a two-day summit at CUNA Mutual’s headquarters, Kaas says.
Kaas says that his group plans to invest mostly in early-stage companies that are past the seed stage, and working to raise Series A or Series B funding rounds. A typical investment from CMFG Ventures will likely be in the $1 million to $5 million range, he says, and on average it will put about $25 million into startups per year.
Kaas says that it’s also possible some of the technologies developed by startups CMFG Ventures provides capital to could end up being used by CUNA Mutual or its member organizations.
“We look at investments that tie into our broader corporate strategy, which is to bring technology into the credit union system, and strengthen it as a whole,” he says. “The financial services industry has been slow to react to changing technologies. Startups have an opportunity to bring innovation to [larger] businesses and their technology platforms.”
