Did you know that the specialty supplement retailer GNC had a venture investing platform? This is broadly known as corporate venture capital. It’s essentially a practice where a large corporate entity takes an equity stake in a small but innovative or specialist company with the objective of gaining a specific competitive advantage. As an alternative to traditional acquisitions, companies are making more of these minority investments. In fact, corporate venture capital now accounts for nearly a quarter of all venture capital investing and its deal value have increased more than tenfold over the past decade. When most people familiar with corporate venture capital think about the concept, they tend to beeline towards large tech companies, but this type of investing is done by every sector in the economy. That includes retailers, especially those that have the financial wherewithal. These retailer-owned (or affiliated) venture funds and/or incubators formed by retailers is becoming more common as retailers are having to evolve more rapidly to meet the needs of customers. I'll run through some recent retailer venture fund announcements and explain the different main forms, which includes improving customer experience capabilities and supporting smaller consumer brands (sometimes to further a cause). Finally, I breakdown GNC Ventures, which has made three investments in the last year (RealEats, GLAXON, and PlantFuel)...and explain what could be next for the retailer's renewed strategic focus on innovation.
FOLLOW ME ON MY SOCIAL MEDIA ACCOUNTS
