UK food business Tate & Lyle has launched Tate & Lyle Ventures, a venture investment arm that will receive £25 million in funding over a five-year period from its parent company.
According to a statement issued by Tate & Lyle, the fund will invest in start-ups and expansion stage companies that support Tate & Lyle’s strategic focus “to deliver next-generation food and industrial ingredients”.
“Tate & Lyle Ventures will be an important vehicle for the group to continue to invest in innovative products and new technologies,” said Mark Robinson, Tate & Lyle group planning and business development director. “It will complement our internal research capability, which has an excellent track record in new product development, and allow us to stay even closer to external developments in our industry.”
It is understood that Tate & Lyle sees the venture fund as a means of helping it to expand into higher margin value-added products, at the same time lessening its reliance on basic commodities such as sugar and starches. The company has already enjoyed commercial success with new product development, notably calorie-free sweetener Sucralose, demand for which has helped lift the firm’s share price in recent months.
Tate & Lyle has appointed headhunter Russell Reynolds Associates to identify a small team of venture capital professionals to run the fund. It has not yet been decided whether the fund will be run out of Europe or the US.
Robinson said the fund would have the option of investing alongside other funds, and that the companies it invested in would not necessarily become part of Tate & Lyle – they may be floated or sold on to third parties.