The parent company of the famous MTR Foods, Orkla is planning to use Rs 50 crore as venture fund and invest in food start-ups. The company has named it MTR Seed Fund and is looking at food-tech start-ups for investment between 2017 and 2018.
This will be the first time Orkla is making a venture outside Scandinavia. Peter A Ruzicka, president of Orkla Group, told Economic Times, “We are mainly looking at earlystage startups, these could be tech startups that fit with our current business or startups in sectors that focus on creating innovative food products, production tech, packaging technology or distribution.”
Orkla is also looking at a start-up that would complement its current business or even one that has a product which has the potential to become a global product. “We have a long-term approach, so we may invest in one to 20 startups. Depends on what we find attractive, we may acquire a startup or sell to a private equity fund as an exit strategy,” said Ruzicka.
The company’s targeting is towards millennials as MTR has only been focusing on homemakers till now. In fact, MTR Foods had launched three-minute breakfast foods in April so as to focus on millennials. The idea was to give them ready-to-go and Indian snacks that could be consumed on the go.
The investment by Orkla will offer stakes that range between 26% and 49% for the startups. The startups who become a part of the MTR Seed Fund will also have access to MTR Foods research and discussion team along with the company’s in-house group of chefs in the case that the product is food-based or the startup has common services like branding, legal assistance, treasury and accounting services.
“We can help with varied aspects from branding of the product to distribution and consumer based knowledge to technical know-how, we can provide the support required,” said Ruzicka. “There is a lot of potential in the Indian market and we are already talking to startups but nothing is finalised yet.” The startups will be reviewed by the senior management of MTR Foods before finalising the first investment.