Venture Capital - how do we pick the star companies of the future?
Alex Macpherson - 17 July 2009
Our work in Ventures, by its very name, is all about unchartered territory and new horizons. The companies that we're interested in are those that have taken a fresh perspective creating the potential to fill a gap in the market with a new service or product. They're innovative enterprises that, with our support, have a chance to take market share. A prime example is one of the most recent additions to our portfolio, the fast-growing food delivery company www.graze.com
Graze is a unique new online service that delivers boxes of healthy food straight to the home and office. The box fits through the letter box and customers can select from over 100 products, including fresh fruit, nuts, dried fruits, seeds, crackers, olives, and other natural snacks. Boxes are very healthy and can be tailored to customers' dietary and nutritional requirements. The company's prices are very reasonable, with boxes sold from £2.99. Graze currently has a growing customer base of over 15,000 people.
With its service, Graze is addressing issues that concern millions of people every day; about how they can maintain a healthy diet despite being pushed for time and money. By offering healthy food at a decent price, delivered to their door, Graze is truly meeting a need. Furthermore, food and health are hot topics. With people becoming ever more health conscious, this is very much a growth area for business.
Graze is also a real innovator - no other company has used Royal Mail in this way to deliver food. While supermarket delivery services like Ocado have shown that customers with busy lives and tight budgets value food delivery services, Graze is the first company to deliver food by post. Like a lot of the best ideas, it appears very simple. But it's about the shock of the new - Graze has taken what we call a disruptive approach, to come up with something that already seems very natural, and works with people's lifestyles.
So how did we find Graze? And why did we choose to invest? We receive up to 3000 business proposals a year, which come to us via our website, phone calls, personal recommendations, corporate finance companies and our Investor Group, a collective of successful entrepreneurs and industry experts who provide invaluable help and support. We go through a thorough process of research and selection in choosing companies, constantly seeking advice and opinions along the way, to ensure that we're deciding on the best companies for investors.
Graze was personally recommended to us and became a contender for investment, as along with its product offering, we already knew members of the management team. They are the same people who launched Lovefilm, one of Ventures' most successful portfolio companies, which is now Europe's biggest DVD rental service. As they are a highly experienced team who have all the logistics of running a business nailed down, presented a strong business model for Graze and were already successfully growing the business, this gave us confidence.
Graze's service is easy to use and understand and it offers a tangible product with clear appeal. If you want to try it for yourself, we have a promotional offer for Octopus blog readers: simply go to the Graze website www.graze.com and enter the code ‘OCTOPUS11'.
Graze exemplifies many of the companies we invest in, as it is effecting change both through its business and in people's lives. As modern life continues to accelerate, we need to support companies with ideas that can make a difference.
