- Starbucks has invested $100 million in Valor Siren Ventures, a fund managed by Valor Equity Partners that will support food and retail startups. The investment is a first of its kind for the coffee company, according to a press release.
- The fund, which is expected to raise an additional $300 million, will identify and invest in companies that are creating products, technology and other solutions related for the food or retail segments.
- Additionally, Starbucks will look into direct commercial arrangements with these start-ups.
Tech innovation is growing at a fast clip in the restaurant space. Many tech companies are offering new ways to better manage staffing, improve the customer experience and use artificial intelligence to reduce manager workloads. Restaurant chains have yet to make meaningful investments in food or retail startups, however, which could give Starbucks an edge.
CEO Kevin Johnson said during the company's annual shareholders meeting that innovations are becoming an increased focus for the coffee giant as it strives to be an enduring brand. Starbucks is also shaving down the timeline of its in-house innovations to 100 days from idea to action, he said.
Most of major investments by the food and restaurant categories so far have been on operational improvements. Coca-Cola led a $10 million investment in Omnivore, a platform that integrates POS and third-party technologies. Yum Brands put $200 million toward Grubhub last year and began rolling out delivery at Taco Bell earlier this year. It also will offer delivery platforms for KFC and Pizza Hut.
Other brands have been focusing on tech innovations internally, such as Shake Shake, Wendy's and McDonald's, either by revamping stores with more consumer-facing technology or have plans to use more technology in the future. Yum is also actively searching for a global leader to build its digital and tech strategies.
Johnson said the company will focus on innovators that are building businesses in areas relevant to Starbucks, which could mean technologies that help with its existing focuses of improving the guest experience, sustainability efforts and expanding delivery. Its partnership with Nestlé, which began producing new products in February, may also be an area of innovation that could benefit from a food or retail startup.