Foxconn, Northwestern Mutual, Johnson Controls, Advocate Aurora Create $100M VC Fund
Foxconn Technology Group continues to make its presence felt in the Wisconsin business community. The latest move: The Taiwanese contract manufacturer is forming a $100 million early-stage venture capital fund with three of the Badger State’s leading companies and organizations.
Advocate Aurora Health, Northwestern Mutual, Johnson Controls, and Foxconn will each contribute $25 million to the fund, according to a press release. The fund will invest in startups located around the world that are developing products and services for the partners’ respective sectors—healthcare, financial services, manufacturing, and technology.
Advocate Aurora Health, formed this year through the merger of Wisconsin-based Aurora Health Care and Illinois-based Advocate Health Care, is one of the country’s largest networks of nonprofit hospitals and clinics. Ireland-based Johnson Controls (NYSE: JCI), which has North American headquarters near Milwaukee, manufactures a variety of products, including lithium-ion batteries, heating and cooling systems for buildings, and energy storage systems. Milwaukee-based Northwestern Mutual sells life insurance policies and helps people plan for retirement, among other financial services. And Foxconn, which previously announced a partnership with Advocate Aurora Health, is constructing an enormous plant in southeastern Wisconsin where it plans to assemble electronic displays. The Mount Pleasant, WI, manufacturing campus is expected to create up to 13,000 jobs, and the company has said the $10 billion facility will employ at least 3,000 workers when it opens in 2020.
The new venture fund’s partners intend to make money, of course. But they’re also billing the fund—dubbed the “Wisconn Valley Venture Fund,” referring to Foxconn’s planned manufacturing campus—as a means to position southeastern Wisconsin as a global tech hub. There’s no guarantee the investment dollars will go to startups in Wisconsin, but the fund’s manager will be based in Milwaukee, according to the press release.
“We do not expect [the new fund] to have a big impact on the broader funding environment for startups in Wisconsin,” Jeb Bentley, vice president of investment strategy at Northwestern Mutual, told BizTimes Media.
Startups headquartered in Wisconsin raised about $116 million of venture capital last year, a major decrease from the state’s 2015 and 2016 totals, according to data from the investment-tracking firms PitchBook and the National Venture Capital Association.
The new startup fund will be one of the largest in the Badger State. Madison, WI-based Venture Investors (VI), the state’s oldest and largest VC firm, says on its website that it manages more than $200 million in assets. VI was out raising a $100 million fund this year, according to a securities filing in May, and it reportedly raised around $80 million for its last fund. There’s also Capital Midwest Fund, which last year reportedly raised at least $50 million for its third fund, and Madison-based 4490 Ventures, which bagged $49 million this year for its second fund. On the corporate venture capital side, Northwestern Mutual and Madison-based American Family Insurance each launched $50 million funds in recent years. And last year, Northwestern Mutual and Advocate Aurora (back when it was just Aurora) each launched $5 million venture funds dedicated to backing Milwaukee-area startups.
Foxconn has made a series of investments throughout Wisconsin. It has bought office buildings in Green Bay, Eau Claire, and Milwaukee, part of its planned “innovation center network” connecting different parts of the state. The office in downtown Milwaukee will reportedly serve as Foxconn’s North American headquarters. And on Monday, Foxconn announced a $100 million gift to the University of Wisconsin-Madison. UW-Madison said it was one of the largest gifts in the school history, and it will use the bulk of the money to construct a new facility on its engineering campus that will serve engineering students, faculty, and staff, as well as researchers from other disciplines.
Foxconn is slated to receive about $4 billion in tax credits and other economic incentives for its planned manufacturing campus, provided the company meets pre-determined investment and hiring targets.