Agthia launches $54m fund to boost innovation

Company working to transform operations under a five-year growth strategy to become region's top food and beverage company by 2025

Agthia Group reported a roughly 6 per cent increase in its first-quarter net profit. Khushnum Bhandari / The National

Abu Dhabi-based food and beverage company Agthia Group launched a $54 million corporate venture capital fund that aims to expand its innovation capabilities and create mutual value with the start-up community.

Called Agthia Ventures, the new fund is co-funded by Agthia and its parent company ADQ, the Abu Dhabi-based investment and holding company, and will be co-managed with Touchdown Ventures.

“Our CVC will give us access to cutting-edge technologies and market insights from dynamic entrepreneurs, helping to future-proof our growth and strengthening our ability to meet the evolving needs of consumers across multiple territories,” said Alan Smith, chief executive of Agthia.

“In turn, Agthia will offer our product, market and distribution expertise to the entrepreneurs supported by the programme to help them succeed.”

Agthia is transforming its operations under a five-year growth strategy to become the region's top food and beverage company by 2025. It is aiming for annual revenue of Dh6 billion in the next two years.

It reported a roughly 6 per cent increase in its first-quarter net profit to Dh87 million, as group revenue rose.

The company's net revenue jumped by more than 12 per cent annually to Dh1.18 billion in the three months to the end on March.

The new fund is stage-agnostic and will invest primarily in companies with clear product-market fit that are demonstrating revenue growth, Agthia said in a filing on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.

Investments will focus on brands, categories and solutions across Agthia’s portfolio that are both complementary and adjacent to its business model, for example in snacks and beverages, value chain technology and ingredient technology, it added.

Agthia Ventures will create a programme to help the “best and brightest entrepreneurs” in food and related industries scale their operations and accelerate their product development and market adoption.

Utilising Touchdown’s network of start-ups, venture capital relationships, incubators and accelerators, Agthia Ventures is “well placed to identify attractive early stage, seed and growth investment opportunities within relevant and target geographies”, the company added.

Touchdown, which has offices in Los Angeles, Philadelphia and San Francisco, has established and operated various CVC programmes for blue-chip corporates, with more than 100 completed venture investments to date.

“We believe entrepreneurs globally will be impressed by the collaborative, supportive culture of Agthia’s team and their capabilities to help a start-up grow,” said Scott Lenet, Touchdown president and co-founder.

“Whether through providing expertise and distribution locally in the Mena [Middle East and North Africa] region, or by working collaboratively in North American and European markets to leverage Agthia’s expertise, the team have a lot to offer to food and beverage innovators.”