General Mills, Campbell Soup, Among “Old-Economy” Companies That Have Created Venture Capital Funds

Randall Smith reported on the front page of the business section in yesterday’s New York Times that, “At first glance, the maker of Cheerios and Cocoa Puffs might not fit the image of a cutting-edge venture capital investor.

“But with the food business moving to healthier offerings and online distribution, General Mills has created a venture capital unit that recently led a $3 million investment in Rhythm Superfoods, a specialty start-up that makes kale chips and broccoli crisps.

“General Mills, based in Minneapolis, is part of an increasing number of old-economy companies, including the convenience chain 7-Eleven and the Campbell Soup Company, that have joined a crowd of technology companies to create venture capital funds. Through them, they scout for new products or services and promising potential business partners.”

Mr. Smith explained that, “Since 2011, the number of companies making venture capital investments has risen 79 percent, to 801 globally, according to Global Corporate Venturing, a data provider. The ranks include Verizon Ventures, Volvo Group Venture Capital, Chevron Venture Capital, Pfizer Venture Investments and Blue Cross Blue Shield Venture Partners.

“Even as total venture capital investment more than doubled from 2011 to 2015, to $58.8 billion, the amount invested by corporate venture funds quadrupled to $7.6 billion in the same period, according to the National Venture Capital Association. Corporate funds make up 12.9 percent share of the total, the highest since 2000.”

The Times article pointed out that, “For many company funds, financial gain is less important than finding the next big idea.”

Yesterday’s article added that, “For General Mills, which has also invested in the plant-based food maker Beyond Meat and two other start-ups, the venture capital fund is a way to keep pace with the growing number of small food brands that have found consumer success, especially online.”

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