General Mills and 7-Eleven join the venture capital crowd

[...] 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 startup that makes kale chips and broccoli crisps.

General Mills, from Minneapolis, is part of an increasing number of old-economy companies, including the convenience chain 7-Eleven and Campbell Soup Co., that have joined a crowd of technology companies to create venture capital funds.

With valuations of many young, private companies faltering as interest in initial public offerings has waned, corporate venture investing faces a test.



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.

For General Mills, which has also invested in the plant-based-food maker Beyond Meat and two other startups, 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.

“The traditional consumer packaged goods model of big advertising budgets, trade leverage and scale — a lot of those factors have been neutralized by these small brands,” said John Haugen, who heads the General Mills venture fund after managing brands such as Nature Valley, Yoplait and Hamburger Helper.

Technology companies pioneered corporate venture funds 30 years ago, followed by media, finance and health care companies.

In 2009 and 2011, it took stakes in iControl Networks, a broadband home security and energy management service, and it later offered it to its customers through Xfinity Home.

Qualcomm is prepared to invest through downturns because such stakes offer a ringside seat for “the next generation of disruptive innovation around our mobile core,” said Brian Modoff, who oversees strategy, mergers and acquisitions and ventures for the company.

Venture investments have mushroomed recently at Salesforce, a maker of customer relations software, which began investing in 2009.

Since 2011, Salesforce has increased its investments to $505 million, from $27 million.

Sue Siegel, chief executive General Electric’s GE Ventures, said the company got into venture investing in 2013 to identify up-and-coming entrepreneurs in the health care and energy industries.