‘Outsourcing’ innovation

USAA’s venture capital arm has funded 39 startups since its launch in 2009

As more and more media companies rolled out video streaming services, Grow Credit Inc. pitched a novel idea: Build your credit by using a Mastercard to pay for Netflix and Hulu subscriptions.

Customers can apply for an interest-free Mastercard from Grow Credit, connect it to a bank account and pay for such subscriptions with the card. Grow Credit reports their monthly payments to Equifax, Experian and TransUnion, the major credit bureaus, and that payment history can improve their credit scores.

The Santa Monica, Calif.-based startup caught the eye of executives at USAA, which uses credit scores to help determine whether to offer someone an insurance policy and what premiums to charge.

The San Antonio-based insurance and financial services company recently led a $10 million Series A funding round for Grow Credit, which said the investment will help it “accelerate its mission to reach more struggling segments in society, including active duty military members, veterans and their families.” USAA may enter into an operational contract with Grow Credit.

“We know that lots and lots of military service men and women are benefiting from the ability of Grow Credit to help you to go, let’s say, from a 600 (credit score) to a 650 or to improve your score without necessarily going out and getting another $5,000 loan on something,” said Nathan McKinley, vice president and head of corporate development at USAA. “We’re pretty excited about that opportunity.”

The Grow Credit deal was spearheaded by USAA’s corporate

Photos by Salgu Wissmath/Staff photographer Since launching the corporate development in 2009, USAA has invested $331 million in dozens of startups and returned more than $1 billion to the company.

Nathan McKinley became head of USAA’s corporate development department in 2015.