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Update | Fall/Winter 2021

Kyle Nakatsuji’s Startup Disrupts the Insurance Industry

By Leiah Fundell

Photography by Paul L. Newby II

Kyle Nakatsuji

How many rejections does it take to stop pursuing a goal? For Kyle Nakatsuji (MBA ’11, JD ’12), there is no number. “No” is simply a mispronounced “maybe” to the founder and CEO of Clearcover, a startup car insurance company offering a fully digitized experience for consumers.

Nakatsuji has faced obstacles—including an MBA that almost wasn’t—but that hasn’t stopped his rise in the highly competitive insurance market. Under Nakatsuji’s leadership, Clearcover has raised more than $200 million in series D funding. The Chicago-based company has launched in multiple markets with plans to expand to more than 20 U.S. states by year’s end.

Before launching Clearcover in 2016, Nakatsuji was a founding member of American Family Ventures, the corporate venture capital arm of American Family Insurance. He was responsible for sourcing, evaluating, and structuring more than 50 equity and debt venture capital investments in tech startups. It was in this role that Nakatsuji hatched the idea for Clearcover, knowing it was a significant risk in a notoriously tough regulatory market dominated by massive competitors. He decided to pitch the venture to his boss at American Family anyway.

“I’ll never forget his face as he responded, ‘So you want to start a competitor in a market where the top four leaders spend a combined $6 billion on advertising every year? And you want to spend barely any money on advertising to instead focus on customer experience?’”

“I threw myself into the deep end and made a lot of mistakes. You learn a lot from failure.”

Kyle Nakatsuji (MBA ’11, JD ’12)

There were very few people trying to build new insurance companies of their own. But for Nakatsuji—a self-described underdog who honed qualities like humility, grit, and resilience on the football field as a walk-on receiver at UW–Oshkosh—the only response was “challenge accepted.” He saw an opportunity for technology in insurance and designed Clearcover around an app that allows policy holders to submit claims and payments, get paid quickly, and receive help.

As much as Clearcover is disrupting the insurance industry, Nakatsuji says there’s no amount of success that will feel comfortable for him.

“I haven’t, nor has our company, earned the right to relax—and that mindset is intentional,” says Nakatsuji. “It’s evolutionary. Fear exists because it has to exist. Courage is the choice to override the fear. Couple that with unflappable persistence to find a solution and that’s resilience made tangible.”

Nakatsuji’s path to entrepreneurship stands out precisely due to that unflappable persistence. He started law school at UW–Madison after completing his undergraduate degree in political science, but soon questioned if law was the right fit. Determined to increase his career options, Nakatsuji crossed the street to Grainger Hall to seek admission to the full-time MBA program.

With no business background, no GMAT, not even a real job history due to his football commitments, Nakatsuji was politely told “no” at the front desk—not just once, but week after week.

“Basically, the message was, ‘You aren’t remotely prepared to go to business school, find something else to do.’ It sounded like a maybe to me,” says Nakatsuji. “So, I kept coming back trying to convince them to let me in.”

Nakatsuji eventually got the “yes” he was waiting for, landing in the Grainger Center for Supply Chain Management. But getting accepted was just the beginning. Career services began asking about jobs and career paths.

“I hadn’t thought that far ahead,” says Nakatsuji.

He played catch-up by borrowing textbooks and auditing classes. After meeting with a former venture capitalist, Nakatsuji decided he wanted to become one.

“I went back to career services and said, ‘I want to be a venture capitalist,’ and they’re like, ‘That’s the one job you can’t have. You have no experience,’” recalls Nakatsuji.

Again, he took it as a maybe. Nakatsuji spent time outside of class trying to get real-world experience—primarily through UW–Madison’s Law & Entrepreneurship Clinic where he could learn the ropes by working hand-in-hand with startups.

“I made my intentions known that I wanted to get into investing and work with entrepreneurs,” says Nakatsuji. “I prepared myself for a career that I wasn’t sure I was going to be able to have.”

After completing his MBA and law degree one year apart, Nakatsuji started his career as a corporate attorney focused on tech startups, but he struggled to feel successful in law.

His move to American Family Ventures launched him into the venture capital and startup world, and eventually to Clearcover—just a few years after hearing that first “no” when inquiring about an MBA. Nakatsuji credits his success to the lessons learned from failure.

“I threw myself into the deep end and made a lot of mistakes. You learn a lot from failure,” says Nakatsuji.

“It was good fortune to have been given opportunities to do things that were beyond my capacity and learn from them.”

Supporting the Underdog

As a former underdog athlete, Nakatsuji knows firsthand the hard work and dedication demanded of student athletes and brings that mentality to Clearcover’s core values.

Following the June 2021 Supreme Court decision to eliminate the earnings cap for collegiate athletes, Clearcover became the first auto insurance company to ink endorsement deals with NCAA student athletes.

“Our team knows what it looks like to face adversity with courage and tenacity, and to put in the behind-the-scenes effort each day to play the long game and win,” says Nakatsuji.