business news in context, analysis with attitude

The Puget Sound Business Journal reports that Starbucks is investing $100 million in a new venture capital fund that it says is “focused on new ideas and technologies that will be good for both customers and business … The fund will identify and invest in companies that are developing technologies, products and solutions relating to food or retail, which Starbucks says are increasingly relevant to the company as it seeks to accelerate its innovation through external relationships.”

The fund will be managed by private equity firm Valor Equity Partners, which is seeking another $300 million from other potential partners.

CEO Kevin Johnson says that “with an eye toward accelerating our innovation agenda, we are inspired by, and want to support the creative, entrepreneurial businesses of tomorrow with whom we may explore commercial relationships down the road.” And in the announcement, Starbucks says that the investment “will serve as a growth driver for the next generation of food and retail start-up companies.”

The Business Journal notes that the announcement comes as Starbucks prepares for its annual shareholders meeting, at which two additional initiatives are expected to be revealed:

• A reimagining of the company’s “third place” approach to its stores that COO Roz Brewer says will go beyond a simple renovation and will focus on “convenience, comfort and connection.”

• New environmental moves that include recyclable and compostable cups that will be tested in a number of markets, and a recyclable straw-less lid that immediately will be rolled out to all stores in the United States and Canada.
KC's View:
I like it when businesses do things like this - with an understanding that if you want to grow new approaches to business you have to adequately seed the land, they invest in venture capital funds that can expand their yield.