The WV Edge: How Wittington Ventures Fuels Growth for Startups
Setting the Stage for Startup Success
We here at Wittington Ventures are very excited to be investing out of our second fund, and we thought it would be helpful to share our value-add beyond capital with the broader startup community. For those unfamiliar with us, Wittington Ventures (WV) is a Toronto-based venture capital firm affiliated with companies such as Loblaw and Shoppers Drug Mart. If you are Canadian, you are likely intimately familiar with these businesses as they touch millions of lives here at home every single day.
This post aims to shed light on the distinct value that Wittington Ventures offers to startups through our unique access to corporate partners who are either directly or indirectly investors in our fund (our limited partners, or LPs). First though, what we don’t do: despite our proprietary connections and access to our LP base, we are not a corporate venture firm. We are set up as a completely independent fund and make our own investment decisions, which aren’t necessarily tied to the decision-making processes of the corporate partners with whom we intersect. But what’s so exciting about this investment platform is that we get to really lean on the operators within those companies to help us understand trends, and to guide our diligence work when we’re looking at investment opportunities by validating the market push vs. pull of new technologies or business models. Both WV and our LPs are interested in finding the best startups, but in the end we make our investment decisions based on our own criteria, and the operating businesses make their business decisions based on what is right for them.
That said, our proprietary relationships with our corporate partners help us tee up “win-win” scenarios for both them and the startup if there’s a mutually beneficial relationship worth exploring. Here, we get the startup in front of the right decision makers within our LP base, arguably one of the hardest parts of a sales cycle, to explore things such as procuring innovative software/products or creating a strategic distribution partnership that makes sense for both parties.
Examples of The Wittington Ventures Value-Add
We have a strong track record of leveraging our corporate partners mentioned above to provide portfolio companies with an advantageous opening into the Canadian market along with unparalleled subject matter expertise.
For example, Wittington Ventures invested in Gatik — an autonomous trucking company based in California — in January 2020, and later that year Loblaw announced a multi-vehicle, multi-site pilot with the company, with success-based plans to continue expansion of the partnership. Since then, Loblaw and Gatik have transported over 150,000 autonomous deliveries, and have successfully run Canada’s first, fully driverless commercial delivery on public roads.
Similarly, individuals within WV introduced Contentful, a headless content management software system, to Loblaw’s IT organization as part of a due diligence process. Both WV and Loblaw liked what we saw — WV is an investor, and Loblaw has since been named a top 10 customer by Contentful.
Our LP relationships have also been instrumental in helping some of our early-stage consumer product companies — such as Motif Foods, Arcaea Beauty and Lemme — to better understand how to get to market quickly and successfully with their first product launches. Although these companies currently only sell their products through US distribution channels, interactions and advice from our corporate partners made a difference in steering them towards certain products, features and commercialization strategies.
On the healthcare side, we were able to help our US women’s telehealth and digital pharmacy company, Nurx (which has since merged with Thirty Madison) successfully procure early access to a new therapeutic thanks to the team at Shoppers Drug Mart. This same team also helped Nurx/Thirty Madison work through unique ways to optimize its pharmacy operations to improve margins and efficiency.
These are just a few examples of how we have uniquely added value to the companies we invest in. Next, we will provide more information on corporate partners and the areas and sectors that we are able to bring to the forefront around value-added venture investing.
Wittington Ventures’ Corporate Affiliations
Let’s cover how we ensure that we can in fact add value to the companies we invest in and how we select our desired investment areas.
The answer to the above questions lie in our ability to have each of our corporate partners play a role in shaping our sector investment theses and portfolio management activities across our main investment verticals: commerce, healthcare, food, and climate. Our corporate partners have considerable reach and influence within their respective industries — we rely extensively on their domain expertise to inform our thematic investment approach, and provide diligence input as a “voice of the customer” where and when it makes sense. Our partners in each of these areas are summarized below.
Partner Companies in the Commerce Sector
We define commerce fairly broadly — to include both physical commerce and e-commerce, as well as all of the behind the scenes enablement capabilities that make them hum including supply chain, payment mechanisms, warehouse operations and automation, and e-commerce software platforms. Our partner companies in this area span large food retailers, an apparel retailer, a large loyalty program, and associated property holdings.
Data as of September 2023
Loblaw Companies Limited: Established in 1919, Loblaw is Canada’s largest retailer and food distributor, serving millions of customers daily through its operating companies. Loblaw brands and banners include Loblaw’s, No Frills, Fortinos, and others.
PC Financial: President’s Choice Financial (or “PC Financial”) is a financial services brand with two core offerings: personal banking services through the no-fee PC Money Account, and Mastercard credit card services issued by President’s Choice Bank.
PC Optimum: PC Optimum is a loyalty program operated by Loblaw, allowing members to earn points on their purchases online and in-store at over 4,500 participating retail locations under the Loblaw umbrella, as well as 2,000 Esso and Mobil gas stations.
Choice Properties: Established in 2013, Choice Properties is Canada’s largest real estate investment trust, specializing in the development, management, and ownership of more than 700 assets through its property development program.
Joe Fresh: Joe Fresh is an affordable fashion and family apparel brand under the Loblaw umbrella. Since its debut in 2006, the brand has expanded its presence across Canada to more than 1,450 retail locations, including Loblaw and Shoppers Drug Mart stores, as well as various stand-alone outlets and shop-in-shops through partnerships with other retailers.
Holt Renfrew: Founded in 1837, Holt Renfrew is a Canadian luxury fashion and lifestyle department store chain with a curated selection of haute couture, ready-to-wear fashion, fine jewellery, and cosmetics.
Some of our investments in the commerce sector include:
- Gatik: An autonomous vehicle for supply-chain automation; working with Loblaw.
- Foxtrot / Dom’s: A Chicago-based retailer that has brought a modern footprint to convenience stores; diligence and company support on store design and merchandising provided by Loblaw.
- Contentful: A content management system typically used for e-commerce; working with Loblaw.
Partner Companies in the Healthcare Sector
Similar to commerce, we define healthcare with a very broad lens too. Our investment interests in the area include sub-sectors such as data processing and analytics, novel and/or digital delivery systems, applications of AI and machine learning to accelerate research and patient care, and so much more. Our partner companies in this area span a large pharmacy retailer, beauty / wellness retailer, industry-specific software, and various clinic networks (to name a few).
Data as of September 2023
Shoppers Drug Mart: Shoppers Drug Mart (or “Shoppers”) is Canada’s leading retail drug store marketplace and provider of pharmacy products and services, serving more than 1.2 million customers daily and fulfilling over 160 million prescriptions annually. The chain has expanded to over 1,350 stores across Canada since its inception in 1962, with each location operating as a full-service pharmacy and offering a range of health, beauty, and wellness products and services.
Shoppers additionally operates several specialty services. The other partner companies in healthcare noted above operate as subsidiaries of Shoppers, united by a common purpose — to help Canadians Live Life Well, and lean on Shoppers’ extensive retail network to coordinate care.
Some of our investments in the healthcare sector include:
- Abridge: A platform that records medical consultations and uses machine learning to generate summaries for patients; evaluated by our clinic networks.
- Unlearn: A platform that is creating digital twins of clinic trial participants to forecast individual patient trajectories; evaluated by our clinic networks.
- Brave Health: Digital mental health clinics focused on providing impactful care to the large, high-need Medicaid population in the USA.
- Lemme: Wellness brand that offers a range of supplements designed with both efficacy and consumer lifestyle in mind; we are supporting the retail strategy.
Partner Companies in the Food / Sustainability Sector
We generally invest in technology-oriented companies in the food vertical. Our investment interests span farm to fork and include sub-sectors such as AgTech, bio-engineered foods, packaging and distribution, and consumer applications. And our partner companies in this area span some of the most influential merchants and producers of food products in North America.
Data as of September 2023
Loblaw Companies Limited: See above.
President’s Choice (PC): President’s Choice (PC) is a private-label grocery products and services brand introduced on Loblaws’ store shelves in 1984. With a long-standing commitment to using premium ingredients, the brand’s selection of more than 2,000 grocery products includes ready-to-eat meals, fresh produce, and pantry staples free from artificial flavours and colours, as well as plant-based, organic, and gluten-free product lines.
Some of our investments in the food sector include:
- Motif: Developing plant-based ingredients that replicate the taste, texture, and nutritional benefits of animal products; evaluated by Loblaw food scientists.
A New Investment Theme: Climate
As evident from above, we pride ourselves on being a thesis-driven venture capital firm, and over the past four years, a narrative of sustainability has consistently woven through our investment philosophies in the retail, healthcare, and food verticals. This has manifested through our strategic investments in companies such as Motif and Arcaea, our explorations into food waste, and our engagements with pioneering companies dedicated to crafting a sustainable future. With the introduction of our second fund, we are excited to announce that we are not merely continuing our support in this realm but that we are broadening our scope to support companies across ClimateTech more holistically. This expansion includes formulating a distinct ClimateTech thesis, paralleling our efforts in our investment verticals.
Our decision to pivot more decisively towards ClimateTech is driven by two main factors. Firstly, the glaring climate crisis challenges us with rising global temperatures, extreme weather events, and significant ecological impacts that we all have unfortunately come to know. We see the decarbonization of the economy as not only essential but believe the timing is now right to cultivate significant new companies capable of delivering venture-like returns. Secondly, our partner companies’ significant commitments to ClimateTech and sustainability have become increasingly central to our strategy. Our partners, each in their unique way, have embarked on SBTi validated and approved pathways to net-zero, showcasing our collective commitment to environmental stewardship.
For example, Choice Properties has already installed approximately 50 solar projects on buildings, upgraded lighting across retail and parking lots that have saved more than the annual energy use of 426 homes, and continues to drive towards its publicly stated targets of:
- A 50% reduction in Scope 1 & 2 emissions from a 2019 baseline by 2030;
- A 30% reduction in Scope 3 emissions from a 2019 baseline by 2030; and,
- Reaching net-zero GHG emissions across our value chain by 2050.
Similarly, Loblaw has installed 60+ solar projects on buildings, commenced 250 carbon reduction projects, and, in a Canadian first, committed to purchasing 100% renewable energy for over 280 locations across Alberta to drive towards their publicly stated targets of:
- Achieving a net-zero short-haul outbound corporately owned and operated truck fleet by 2030;
- Reducing their enterprise operation (Scope 1 & Scope 2) footprint by 50% from a 2020 baseline by 2030;
- Reaching net-zero for their enterprise operation (Scope 1 & Scope 2) footprint by 2040; and,
- Achieving net-zero for their Scope 3 emissions by 2050.
As we embark on this new chapter, our mission to harness our expertise, network, and passion for sustainability to support the next wave of ClimateTech innovators has not changed. However, we are excited to tackle the climate crisis more broadly with solutions that address immediate needs while laying the groundwork for a more sustainable and resilient future. Wittington Ventures’ evolution continues with an unwavering commitment to impact, and we eagerly anticipate the transformative potential of our ClimateTech endeavors.
Tying it All Together
In summary, Wittington Ventures has a strong track record of leveraging our corporate partners to provide portfolio companies with a strong opening into the Canadian market, and providing access to subject matter experts that can help them succeed. If you’re building a startup in any of our key verticals, we’d love to hear from you to understand how we can accelerate your business. Feel free to reach out to any of our team members at wittingtonventures.com to get the conversation started.
