Starbucks Corp is investing $100 million in a newly created fund that will be managed by Tesla Inc investor Valor Equity Partners to promote companies developing new technologies and products for the food and retail industry.
The fund, Valor Siren Ventures Fund, will later seek to raise an additional $300 million, the world's largest coffee chain said this week, ahead of its annual shareholder meeting.
"We are inspired by, and want to support the creative, entrepreneurial businesses of tomorrow with whom we may explore commercial relationships down the road," Starbucks CEO Kevin Johnson said in a statement.
Starbucks is the latest US food company to invest in startups. The largest US meat producer, Tyson Foods, started a fund called "Tyson Ventures" in 2016 to invest in businesses that focus on developing plant-based protein, while a clutch of other food and drink brands including Kraft Heinz and PepsiCo Inc have also set up similar funds.
Commitment To Return $25bn To Shareholders
Starbucks reaffirmed its longer-term revenue and profit targets, and said it would buy back $2 billion in shares, as part of a commitment to return $25 billion to shareholders through 2020.
The annual shareholder meeting comes as the coffee chain counters sluggish performance in its US business through a revamp of its stores and introduction of fresher food and cold brews that has driven market-beating same-store sales in the past two quarters.
The company's shares are up about 11% since the beginning of the year, compared with a 13% gain in the S&P 500 Index.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
