Venture

Starbucks Innovates By Pouring $100M Into Other Food Startups

Most of us have it – that internal struggle between a desire to support your local coffee shop/start-ups and a love for the trustworthy, convenient cup that large corporations like Starbucks coffee provides. So imagine if you could find a happy medium – a cup of Starbucks, knowing that you’re supporting innovators and smaller companies on some level.

Sound good to you? The Seattle-based coffee empire is hoping that’s the case.

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Starbucks Corporation just poured $100 million into a food startup-focused fund, Valor Siren Ventures Fund. The fund will be managed by Valor Equity Partners, and will invest in companies innovating in food or retail, Starbucks said. The fund is working to raise an additional $300 million in coming months.

We haven’t seen too much Starbucks steam in the tech world, other than a few investments, and three acquisitions, including Teavana, which went out of business. Investing in a fund is a first for the company, it said.

The concept of corporations creating venture funds continues to gain momentum, as our own Jason Rowley reported back in September. His piece illustrates how active this sector really is while pointing out how many tech companies have entered into investment initiatives including Intel Capital, Cigna, and of course SoftBank and it’s massive Vision Fund.

As Jason reported, part of this drive might be the realization by corporations that they can’t beat out startups when it comes to innovation. Thus, entering as financial partners might be next best option.

In a statement, president and CEO of Starbucks, Kevin Johnson, had a similar, tech-heavy mindset. He sounds right at home in the world of venture capital: “We believe that innovative ideas are fuel for the future, and we continue to build on this heritage inside our company across beverage, experiential retail, and our digital flywheel.”

He added that Starbucks is accelerating a so-called “innovation agenda” and that the entrepreneurs they’re helping may enter into commercial relationships with Starbucks in the future.

Last year, the company was shooed out of a neighborhood as a threat to “old-world” feel and historic charm, reported the Boston Globe. At the time, Starbucks said it believed independent stores and small chains can continue to grow and thrive alongside their outlets. Fast forward a little less than a year later, and it seems that Starbucks isn’t just betting that small operations will thrive, but is pouring into them with investment.

Illustration: Li-Anne Dias.

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