Q&A with Allegion Ventures on its 5th anniversary: What they’ve learned and what’s ahead
By: Haley Nelson
This month, Allegion Ventures – the corporate venture arm of Allegion plc – celebrates its fifth anniversary. The fund invests in and accelerates the growth of companies with innovative technology or software that bridges physical and digital security and creates seamless user experiences. Doshia Stewart, chief marketing officer, and Rob Martens, president of Allegion Ventures, sat down to discuss what they have learned in the last five years and what lies ahead.
Allegion Ventures has five years under its belt, and your portfolio continues to grow. What are some key things you’ve learned about the venture world? What makes a good investor?
RM: A great corporate investor invests for the learning as well as the returns. We believe the best way to learn is to participate and partner, back forerunners in emerging technology and have some skin in the game. We are continually learning as we invest.
Strategic focus and discipline are also key. Fund II, led by managing director Bobby Prostko, has allowed us to take bigger bets and expand into new areas like SaaS, cybersecurity, machine learning and computer vision technology. But ultimately the opportunity needs to line up with our investment thesis, whether it’s a new technology or a type of problem that needs to be solved. Our venture fund focuses on accelerating the growth of companies with innovative technology or software that create seamless experiences as people or assets move through a built environment – especially with solutions that are simple, secure and scalable. Allegion is looking to advance a vision of seamless access and a safer world, and we do that in multiple ways, including with the investments we make inside our company and the opportunities we create through venturing.
DS: It may sound cliché, but people matter. Allegion Ventures places a high premium on the founders and their teams. To be honest, we spend as much time thinking about the people because they are, perhaps, more important than the financial outlook. We invest in teams that we believe in, who share our core values and who prioritize building strong relationships. Great leaders have a steady hand and the ability to stay focused and navigate obstacles without panic. Our founders know they can’t do it alone, and they’re building high-performing teams and using all the resources at their disposal to help their companies succeed and pivot as needed. Those abilities were on full display during the pandemic, and we feel great about every team we’ve invested in.
As a corporate venture fund, how is Allegion Ventures different from your traditional venture capital firm?
RM: We are looking to dispel any baggage associated with corporate funds: We’ve reduced hierarchy in decision making and brought on Touchdown Ventures as a venturing-as-a-service partner so we can move quickly. We’re also in this for the long haul; we didn’t pull out when the economy got tough, and we reinvested in the portfolio. Lastly, we are strategic investors who seek to bring more than capital to the table. We aren’t just writing a check. We invest where we can add value – with vertical market access, industry experience and insights on applying technology in our space.
Our investment team, led by Bobby Prostko and principal John Goodwin, builds relationships with founders and opens doors for them. They, along with our team of expert associates, are committed to our portfolio and have become highly valued strategic partners. For example, Bobby and his team understand that if approached properly, foundational issues like privacy, cybersecurity and intellectual property can drive value for startups. John and his team bring in-depth knowledge of user experience, digital business, systems architecture and expertise in the multifamily access industry that deliver tremendous value to our portfolio.
DS: We’ve all kept our day jobs here at Allegion, which means we have deep relationships in the business that allow us to open doors and benefit both our portfolio companies and Allegion. From proof of concepts and integrations with hardware to bringing in experts who can help our portfolio companies understand the ins and outs of topics like privacy and cybersecurity, a particular channel or vertical market, working with people directly involved in the core business is beneficial for the portfolio. And inside our walls, Allegion Ventures opens doors for more people to understand and engage with technology and innovators. Within the company, we often say that Allegion Ventures is everyone’s fund – not an exclusive club. Great ideas and leads come from anywhere and learning from exposure to technology pioneers is a tremendous development opportunity.
As you look ahead to the future of Allegion Ventures, what are you most excited about?
RM: We have an incredible portfolio that we’re proud of. Most recently, we’ve invested in two award-winning proptech companies: Latchel and Stuf. Both companies are driving new standards of efficiency and seamless experiences in the broader property management industry. These startups are visionaries in the post-pandemic real estate space, focusing on the needs of today’s property owners, end users and disrupting the status quo by leading with experience and insights.
DS: Like our portfolio companies, we’ve come a long way and we continue to re-invest, and strengthen relationships and learn. As an engineering-rooted company, our people love things you can touch. What tech entrepreneurs have taught us, however, is the value of data and insights, to rethink how to generate revenue from the territory around an opening like a doorway, and how we can go faster. By partnering and creating an ecosystem of like-minded pioneers – rather than building it all ourselves – we create a virtuous circle of opportunity for Allegion and promising leaders in emerging technology.