Oct 29, 2017 · 20m · top-founders
827: VC: $140m FinTech, InsurTech Fund on How They Invest
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Andrew Pitts, Investment Manager at Transamerica Ventures, breaks down the strategy, deal funnel metrics, and portfolio highlights of managing a $140 million corporate venture fund backed by Aegon. He discusses balancing corporate strategic synergy with top-tier financial returns while navigating the distinct structural dynamics of corporate venture investing.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 35.3% of the talking time here. How this is scored →
Nathan as informed peer 4.5 Guest teaching 3.3 Guest disagreement 0.8 Nathan pushing back 1.7
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:08 Pivoting away from host's US-centric premise
When Latka asks for the top two US regions the fund plans to enter, Pitts rejects the geographic premise to redirect focus entirely toward opportunities in Asia.
Hardest push from Nathan ▶ 8:18 Challenging CVC compensation incentivesLatka bluntly presses Pitts on why an ambitious investor would work in a corporate VC structure without traditional two-and-twenty carry economics.
Biggest teaching moment ▶ 8:35 The painful reality of CVC strategic restrictionsPitts educates the audience on the downside of CVCs by detailing how strategic mandate restrictions forced them and their predecessors to pass on legendary investments like Facebook, Waze, and Moat.
Nathan holds their own ▶ 13:15 Latka breaks down open source monetizationLatka demonstrates deep SaaS industry knowledge by expanding upon H2O.ai's open-source model and articulating how developer-led startups convert free adoption into large enterprise contracts.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Andrew Pitts on Transamerica Ventures' Global Structure | 5 | 3 | 0 | 1 | Latka sets up the interview by clarifying the corporate venture capital structure and rapidly calculates follow-on rounds from Pitts's fund statistics. Pitts explains Transamerica and Aegon's global footprint across the US, Europe, and emerging markets. | |
| Balancing Strategic Value and VC Returns | 4 | 4 | 1 | 2 | Pitts explains the tension between strategic mandates and financial returns, emphasizing that they protect portfolio confidentiality and refuse to share company revenue figures with the corporate parent. Latka probes into the exact terms and check sizes of their fund-to-fund investments like Fintech Collective and Lerer Hippeau. | |
| CVC Compensation and the Constraints of Strategic Mandates | 5 | 5 | 1 | 3 | Latka asks candid questions about CVC compensation and carry incentives. Pitts candidly admits that corporate constraints make him hesitant to invest in his own fund because strategic mandates force them to pass on massive winners like Moat, Facebook, and Skype. | |
| Bullish Portfolio Bets: Policygenius, Hixme, and H2O.ai | 6 | 3 | 1 | 1 | Pitts highlights his top investments including Policygenius, Hixme, and open-source platform H2O.ai. Latka displays his industry knowledge by explaining how modern technical founders leverage open-source models as top-of-funnel lead generation for seven-figure enterprise contracts. | |
| Strategic Partnerships and Global Expansion into Asia | 4 | 4 | 2 | 2 | Latka asks Pitts about target US expansion regions, but Pitts pivots the framing to highlight international expansion into Southeast Asia. Pitts explains the massive demographic scale and regulatory friendliness in markets like Singapore, Malaysia, and the Philippines. | |
| Sponsor Break: Acuity Scheduling Promotion | 3 | 1 | 0 | 1 | Latka performs an extended Acuity Scheduling sponsor read before running through the standard Famous Five rapid-fire questions, covering reading habits, crypto holdings via Digital Currency Group, and college football days. |
Statements from this episode (15)
Transamerica executives committed to launch Fund II
“Just recently our executives have said this is going well so far, so we'll commit to a fund too. We don't have anything in terms of size, but or anything like that, but they're at least interested in continuing kind of the experiment of a CVC fund for an insur…”
Transamerica Ventures has deployed $60M across 17 companies
“17 unique companies, 23 investments in those. And I think about sixty million put to work.”
Transamerica Ventures refuses to share portfolio data with parent Aegon
“Although when it comes to information rights for companies, we don't share company information with our parent company. We share industry trends. We share what they're doing. We share learnings from them. But we won't share, we refuse to share revenue numbers …”
Transamerica Ventures had no direct exits as of October 2017
“Not not, well, officially, no. We had kind of an interesting, we had some of our fund, we had two fund deals, and they've had some exits that have been quite, quite valuable for them, which, you know, goes on our books as well.”
Transamerica Ventures put around $2M into Lerer Hippeau
“I think it was a two million dollar check.”
Transamerica Ventures team receives no traditional carried interest
“Because we're not investors in our own fund, we don't get carry in the traditional sense, and that's fine.”
Deutsche Telekom blocked deals in Facebook, Waze, and Skype
“You know, the funny story we always tell my boss's previous life is, you know, he missed Be Around Facebook and Seed Stage Ways. And a round Skype because Deutsche Telekom said these aren't strategic enough to us.”
Transamerica Ventures passed on Moat before its $850M exit
“And so I had my first one recently I, we had a company called Moat that I really loved, but it wasn't strategic enough. And they sold that for the reported price was eight 50 to a billion and it was a lot less than we had a chance at it.”
Transamerica Ventures filters 5,000 annual opportunities down to five investments
“I'll see, essentially, when you add in, I'll probably see somewhere like a hundred different opportunities per week, just reading newsletters and stuff so I'll see, say, 5000 a year, I'll, like, actually look at maybe 500 of those, like, a little bit deeper, l…”
Transamerica Ventures invested $20M outlier check into CipherCloud
“We have one outlier with Cypher Cloud where we put twenty million dollars into it, so that's sort of a, it kind of, you know, if you did a median, it would be a lot better than an average but it's generally one to five million will be our initial check size”
H2O.ai is signing seven-figure revenue contracts
“It's open source, which scared the heck out of us in the start, but they're signing seven figure revenue contracts.”
Transamerica stops fund-of-funds investing to focus on direct tech
“Lira was real early stage just because we wanted access to sort of their network and their digital marketing opportunities, and they put a ton of companies in the space in front of us. FinTech Collective was the same but going forward, you know, most of our, a…”
Transamerica Ventures holds indirect crypto exposure via Digital Currency Group
“We're invested in Digital Currency Group who themselves, they own a ton of Bitcoin and Ethereum, which has been quite valuable for them, and their Bitcoin investment trust has crossed five hundred million in AUM, so that's good, but other than that, no, no dir…”