A £30 million venture capital pot funded by former sugar producers Tate & Lyle will now begin investing over a period of eight years.
London-headquartered Tate & Lyle’s fund will back start-ups and expansion-stage companies in both the developed and emerging world. The business says it will support those in food sciences and enabling technologies which are in line with its strategy to grow in speciality food ingredients.
The iconic food processing business sold its sugar refining business, including rights to use the Tate & Lyle brand name and Lyle’s Golden Syrup, to American Sugar Refining in July 2010 for £211 million.
It is now focussing its efforts on products such as starches, citric acid and high fructose corn syrup.
The move marks the second time the publicly listed company has started up a venture fund. In 2006 it created a £25 million fund which has gone on to back British businesses including Cambridge University spin-out Lumora, fast dissolving films company BioFilm and Scotland-based Aquapharm BioDiscovery
Karl Kramer, president, innovation and commercial development at Tate & Lyle, says, ‘We have seen with our fist fund how beneficial venturing capability can be.
‘The combination of the new fund and our internal Open Innovation team will enable us to access the full spectrum of new ideas, technologies and opportunities in the global food science and investment community.’
Launching on 1 January 2013, Tate & Lyle’s venture fund will be independently led and managed by Simon Barnes and David Atkinson.
Barnes’s background is in life sciences venture capital with both Atlas Ventures and GIMV Venture Capital. He currently sits on the boards of Allylix, Aquapharm BioDiscovery, Fugeia and Lumora.
Fellow fund lead Atkinson has experience in equity research focussing on the food processing industry. He co-founded Stamford Partners, a European food and drink industry advisory firm.
Atkinson comments, ‘We are continuing to see a real change in consumer attitudes towards health and nutrition and in particular the growing interest in functional foods.’
The new fund will aim to have £30 million of committed capital and is looking to back somewhere between eight and ten deals. Tate & Lyle says the optimal investment sizes will be between £2 million and £5 million.
Companies with strong intellectual property and management teams will be backed, Barnes says, with the independent nature of the fund meaning that it can leverage Tate & Lyle’s expertise.