Mondelēz Launches Corporate VC SnackFutures Ventures With An Eye On Future Acquisitions

Food & Drink

Mondelēz has wound down its innovation hub SnackFutures, alongside its CoLab Program, through which the consumer behemoth had been helping accelerate early-stage snack brands for the past five years, and subsequently launched a corporate VC, SnackFuture Ventures.

The new entity was created as part of Mondelēz’s efforts of doubling down on investments in growth-stage companies positioned to be the “disruptors of the future,” according to Richie Gray, VP and Global Head of SnackFutures. The goal is to help scale up businesses aligned with Mondelēz’s existing categories and markets before rolling them up into its portfolio.

Through SnackFutures, Mondelēz previously made a minority investment in Hu Master Holdings before fully acquiring the paleo chocolate maker for around $340 million in 2021.

Speaking with me exclusively at the Natural Products Expo West 2024 in Anaheim, California, Gray notes how SnackFutures Ventures will invest directly off Mondelēz’s balance sheet, and is very “choiceful and highly strategic” with funding targets.

“It’s been a test and learn process for us, and innovating from scratch requires a lot of hard work and resources. As a big company, we thrive on scale,” Gray explained why the corporate venture model better fits Mondelēz’s vision than a startup accelerator. “We don’t operate as a traditional fund; it’s really about investing in the right businesses with capabilities and technologies relevant to our portfolio and future.”

Investing Criteria & Targets

Besides investing in early-stage brands that are highly disruptive to Mondelēz’s core categories — chocolate, biscuits, and baked goods, SnackFutures Ventures also focuses on scale-up companies globally with a minimum of $20 million in annual revenue driven by strong repeat purchases and in-store velocities. These companies are typically required to generate positive EBITDA, and have already become profitable.

“We envisage an acquisition in three to four years after our first investment,” Gray said. SnackFutures Ventures has invested in two Israeli startups so far, including Celeste Bio, a cocoa ingredients producer using cell culture methods, and will continue sourcing deals globally.

“The U.S. will represent the majority of our portfolio, and we’ve been building relationships across larger European markets, including the UK and Germany,” Gray added. “We also ran a CoLab startup accelerator program in India last year. That was our first foray into the local market, trying to understand the ecosystem there, and we will remain vigilant to the right opportunities around the world.”

The average check size of SnackFutures Ventures is around $2-3 million, and the firm will deploy capital on a rolling basis, according to Gray. “We don’t want to be pressured to hit certain number of investments, but on average, we aim to make two to three deals per year,” he said.

“The sluggish market has brought down the valuation of CPG quite a bit recently, and many founders want their value to grow instead of being diluted,” Gray added. “But in the end, the growth rate and financial returns in food don’t necessarily justify high valuations, and we believe it’s sensible to keep valuation down while maintaining healthy equity in the business. That will help attract more investments and stimulate a market comeback.”

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