Woolies backs new W23 Global venture capital fund

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Supermarket giant Woolworths will funnel money into a $190m global investment fund to keep its stores at the forefront of emerging retail technology and address sustainability challenges in the sector.

The venture capital fund, called W23 Global, will seek out early-stage start-up companies that are using tech to drive faster, more personalised and connected shopping experiences and create more efficient grocery value chains, chief investment officer Ingrid Maes said on Tuesday.

“It’s about identifying problems that need solving and opportunities to create better experiences for customers and partners, and thinking about technology solutions to do that, seeing if there are existing technologies and ideas that could be supported to develop more quickly,” she told NCA NewsWire.

“It’s also about going to the start-up community and saying, ‘come up with new ideas that solve for the challenges we’ve identified, create a business around them and we will invest to help you make your vision a reality’.”

Woolworths is backing the fund alongside leading global retailers Ahold Delhaize, Tesco, Empire and Shoprite.

“W23 is a potentially game-changing international VC fund with a powerful proposition for both our investors and portfolio companies,” Ms Maes said in a separate release.

“We aim to offer our investors incomparable access to transformative innovation in grocery and sustainability worldwide … with leading grocery CEOs on our investment committee, founders can rapidly develop ideas based on an accelerated understanding of retailers’ needs.”

Challenges identified by the fund include emissions and waste reduction, packaging innovation and product traceability and transparency.

Each retailer will put US$25m and the company CEOs will sit on the investment committee.

The fund, which will deploy the money over five years, will be based in the United Kingdom.

Venture capital funds invest in start-up companies to push emerging tech from ideation and infancy through to maturity.

Ahold Delhaize CEO Frans Muller, speaking from the Netherlands, said the fund would help deliver “greater value” to communities worldwide.

“We look forward to enhancing our efforts by partnering with other industry leaders and maximising our collective impact,” he said.

“Together with best-in-class start-ups and scale-ups, we strongly believe we can further drive retail innovation, foster sustainability and deliver greater value to communities worldwide.

Ms Maes currently leads Woolworths’ corporate VC fund, W23 Australia.

The companies W23 Global invests in will be free to trade with other customers separate from the five retailers.

For the half-year ended December 31, 2023, Woolworths Group posted a 4.4 per cent increase in revenues to $34.6bn compared to the same period in 2022, with its Australian Food division contributing $25.9bn to the figure, a 5.4 per cent increase.

But the company swung to a $781m loss following a writedown in the value of its New Zealand business and a fall in the value of its stake in ASX-listed Endeavour Group.

Without the impairments, Woolworths would have booked a $929m profit, or a 2.5 per cent increase from the corresponding period.

The company’s share price is down nearly 14 per cent year-to-date to sit at $32.33 on Tuesday midday.

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