Photo Courtesy of Northwestern Mutual
Cream City Labs, which is located on the second floor of Northwestern Mutual's Downtown skyscraper
On the second floor of Northwestern Mutual’s 32-story, 1.1 million square-foot Downtown skyscraper is Cream City Labs, an airy, open floor-planned working space. The shuffleboard table, couches, 3D printer, even the walls—some lined with whiteboards, others adorned with Wisconsin sports-themed artwork—are more reminiscent of a venture-backed Silicon Valley tech startup than a 150-year-old Milwaukee-based financial services company. Which is exactly the point.
Cream City Labs, which held a grand opening in October, is home to startups in the company’s Cream City Venture Capital portfolio. It is also the home of the Northwestern Mutual Data Science Institute. But more importantly, it serves as a physical embodiment of the company’s new way of doing business. “At the end of the day, especially these days, we really consider ourselves a technology company,” said James Hischke, Northwestern Mutual’s director of tech advancement and outreach.
This new mentality, which began to take hold around 2015 according to Hischke, has led to the creation of two venture capital arms, one of which invests exclusively in area startups, and sponsorship of multiple technology networking and learning events, including last year’s Startup Milwaukee Week. “Northwestern Mutual deserves an enormous amount of credit for their initiatives and bringing Milwaukee’s corporations to the tech and venture scene,” said Joe Kirgues, co-founder of gener8tor, a Milwaukee-based startup accelerator. “[Northwestern Mutual CEO] John Schlifske has been very upfront with their desire to see this tech hub emerge in the community.” Now other local corporations are following in these footsteps.
Project North
Three years ago, gener8tor began Project North with executives from four Wisconsin corporations: American Family Insurance, Harley-Davidson, Kohl’s and Northwestern Mutual. The then-secret group met for quarterly roundtables in either Milwaukee or Madison. Speakers brought in by gener8tor would talk to the executives about subjects like corporate venture capital funds and innovation departments. Members would also give presentations to each other about new initiatives at their companies.
“We wanted to give corporations a comfortable environment to engage with peers around corporate innovation, venture capital, technology and, in general, the kind of uniting theme of what a corporation is going to be doing in five years that it’s not doing today in terms of new products and new technology,” Kirgues said.
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Project North, which was announced to the public in September, has grown to 37 corporate members in industries including manufacturing, insurance, healthcare and retail.
Area startups also use the group’s events as a chance to meet with potential investors. In April, Milwaukee influencer marketing platform Lumanu announced that it had raised $1 million in seed funding from investors including Northwestern Mutual's Cream City Venture Capital and gener8tor. Kirgues said that investment was facilitated through Project North.
And corporate venture capital in Milwaukee is just starting to heat up.
Putting Money Where their Mouth Is
In October 2017, Northwestern Mutual and Aurora Health Care announced that both companies had created $5 million venture capital funds to invest in local startups. “We recognize technology is a key driver of Milwaukee’s future and the private sector needs to play a lead role in getting us there,” Northwestern Mutual CEO John E. Schlifske said at the time. Northwestern Mutual also started Future Ventures, a $50 million fund that invests globally, in January of that year.
Since then, Aurora Health Care’s Invest MKE fund has invested in $75,000 in idea management software startup Ideawake. Cream City Venture Capital has invested in Lumanu, an influencer marketing platform; Socialleads, which helps financial representatives find leads through their social media contacts; Bright Cellars, a monthly wine club; and Wantable, a clothing subscription service.
“As we started talking about what we were trying to do with the Milwaukee tech hub movement, we realized that we should put our money where our mouth is, so we came up with this Cream City Venture Capital fund,” said Hischke. Beyond just the money, corporations investing in startups give young companies access to mentorship from seasoned industry leaders.
A corporation’s investment can also add to a startup’s bona fides. “I think that what those funds are doing is giving a stamp of approval from some of our region’s largest companies,” said Matt Cordio, president of Startup Milwaukee and Skills Pipeline. “Having that stamp of approval, I think, helps those entrepreneurs raise more capital and get more attention.”
In late August, Aurora Health Care, Foxconn, Johnson Controls and Northwestern Mutual announced that each company would contribute $25 million to create the $100 million Wisconn Valley Venture Fund. Because the fund will invest globally, and the fund manager and investment strategy has not yet been announced, it is too early to tell what the local impact will be, though Cordio is optimistic.
“Any time a venture fund is located in Milwaukee it’s a win, because it’s within proximity of entrepreneurs in Milwaukee,” Cordio said. “Just having it in our backyard will likely bring someone from outside of the region to manage it. So that will be good to have somebody new that is living in the startup ecosystem.”
No matter the outcome of these corporate efforts, the developments are being welcomed by the startup community. “I think that leaders in some of our city’s largest companies have realized that it’s essential to support entrepreneurship,” Cordio said. “We’re competing not just with other companies in Milwaukee for talent, we’re competing globally for talent, or at the very least nationally. For us to be an attractive place for technologists to work, we need a vibrant tech and startup community. I’d say that that’s essential to the health of our local economy.”
Find out more about Milwaukee’s startup community by attending one of the many Startup Milwaukee Week events happening this week. A full schedule of events can be found here.
