On a mission

How Vala works with Mission Ventures to control the risks of food and beverage investments

The grocery industry is an interesting one for start-up investors. The best new food and beverage brands can scale up quickly and become attractive acquisition targets for private equity funds or acquisitive grocery corporations.

But on the path to success, challenger brands will always need to overcome numerous obstacles, ranging from securing space on supermarket shelves to ramping up manufacturing volumes without compromising on product quality.

At Vala, we are lucky to have Paddy Willis on our investment committee to help us navigate these challenges. Paddy co-founded Plum Baby, a premium baby food brand that was sold to private equity just five years after launch, in a deal that valued the business at £10m.

Paddy is also one of the co-founders of Mission Ventures, alongside John Stapleton (co-founder of The New Covent Garden Soup Co and Little Dish) and Nigel Parrott (co-founder of Ape Snacks).

Mission Ventures helps challenger brands to grow, by allowing them to harness the entrepreneurial experience of the Mission team, as well as the heft of major food corporations. At the same time, Mission Ventures offers big companies a way of protecting their market position through effective corporate venturing.

Last year’s launch of Batch Ventures, a partnership between Mission and Warburtons, shows how the model works.

Batch Ventures uses capital provided by Warburtons to invest in a portfolio of innovative bakery brands. Mission Ventures acts as an adviser to the fund, helping Warburtons select the most promising companies. The Mission team then works hand-in-hand with the investee companies, helping them to develop and mature.

In short, everybody wins. The start-ups gain the brand-building expertise of the Mission team, as well as funding and strategic support from Warburtons. Warburtons can invest in its future by backing disruptive brands, outsourcing to the Mission team the difficult and time-consuming process of nurturing the companies through their early years.

From Vala’s point of view, this model clearly reduces the risk of investment, when compared to backing a new brand that is going it alone.

That’s why we were delighted when The Artful Baker, one of our portfolio companies, became the first business to secure funding from Batch Ventures. The Artful Baker’s chief executive Paul Rostand is working with the Mission Ventures team to create a ‘mission map’ for the coming years, which will include plans to build the brand’s supermarket presence and increase exports. In short, we believe that having the backing of Batch Ventures gives The Artful Baker the best possible chance of future success.

We also continue to explore other investment opportunities with Mission Ventures. Indeed, one other business brought to us by Paddy is currently going through our due diligence process. If successful, the company could receive funding from the Vala EIS Portfolio in April.

Vala Capital Ltd (FCA number 827386) is an appointed representative of Sapphire Capital Partners LLP, which is authorised and regulated by the Financial Conduct Authority with firm reference number 565716. Our address is Audley House, 12-12a Margaret Street, London, W1W 8RH.

Investing in start-ups and early-stage companies involves risks, including illiquidity, lack of dividends, loss of investment and dilution. It should be done only as part of a diversified portfolio. There is no assurance that the investment objectives of any investment opportunity will be achieved or that the strategies and methods described herein will be successful. Past performance is not necessarily a guide to future performance and the value of an investment may go down as well as up.

The investments which we promote are targeted exclusively at investors who understand the risks of investing in early-stage businesses and can make their own investment decisions. Any pitches for investment are not offers to the public and investments can only be made through Sapphire Capital Partners LLP as the fund manager. Neither Vala Capital Ltd, Sapphire Capital Partners LLP nor any of their members, directors or employees provide any financial, legal or tax advice in relation to the investments and investors are recommended to seek independent advice before committing or if they have any doubts as to the appropriateness or suitability of such an investment in relation to their specific circumstances.

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