Tate & Lyle, a UK sugar producer, has bucked the trend away from corporate venture funds and committed a $45 million (€35.6 million) cornerstone investment to found Tate & Lyle Ventures, an independent firm.
Simon Barnes and David Atkinson, managing partners, will head the partnership, which is targeting start-ups and expansion stage companies that reflect Tate & Lyle’s drive for strategic growth.
This is expected to come from next-generation food ingredients, as well as innovations in industrial ingredients, bio-materials and bio-fuels.
Barnes and Atkinson have complete investment control. Barnes said: “We have very clearly agreed scope for the fund and within that we make all the investment decisions. We are entirely focused on capital gain and structured as any other VC.”
As such the firm is expected to raise additional funds to supplement Tate & Lyle’s commitment. Atkinson said: “We are in discussions with a limited number of financial institutions. The response has been positive.”
Barnes said: “We have also seen a number of universities and they are excited by our interest in industrial technologies. There is a real opportunity here, particularly when it comes to exit. We are not reliant on IPOs. It is much more likely to be a trade sale.”
He said the food and chemicals industries were hungry for innovation and they were acquisitive.
Barnes trained as a scientist and has six-years’ experience in the venture capital industry, first with the London office of Atlas Venture and more recently with GIMV Venture Capital where he focused on early stage life sciences ventures.
Atkinson has 14 years’ experience in equity research specifically focused on the food processing industry. Most recently, he has held management positions in the equities operations of Banc of America Securities as well as providing consultancy services to HSBC and the venture capital industry.