Starbucks has invested $100 million in Valor Siren Ventures, a new fund with plans to grow the next generation of food and retail startups. The fund will identify and invest in companies developing technologies, products and solutions related to food or retail.
The venture fund investment is the first of its kind for Starbucks. Fund manager Valor Equity Partners hopes to raise an additional $300 million from other investors in the coming months; separately, Starbucks will explore direct commercial arrangements with the startups.
“We believe that innovative ideas are fuel for the future, and we continue to build on this heritage inside our company across beverage, experiential retail, and our digital flywheel,” said Kevin Johnson, President and CEO of Starbucks in a statement. “At the same time, and with an eye toward accelerating our innovation agenda, we are inspired by, and want to support the creative, entrepreneurial businesses of tomorrow with whom we may explore commercial relationships down the road. This new partnership with Valor presents exciting opportunities, not only for these startups, but also for Starbucks, as we build an enduring company for decades to come.”
Starbucks shared this news and other tidbits about company changes ahead of its annual shareholders meeting. The company is also aiming to improve the in-store experience, starting by updating select New York City locations this summer. Starbucks did not provide much detail on the store renovations, but noted that the changes will focus on convenience, comfort and connection.
“I don’t want anyone to walk away today thinking this is about furniture or a new renovation strategy,” COO Roz Brewer said in a statement. “Reimagining the third place is about listening to our customers so we can better position our business now and for the future.” The ‘third place’ Brewer refers to is the branded term for Starbucks stores, which serve as a social spot between the home and office.
Starbucks also will update its loyalty program on April 16, allowing all members to earn and redeem Stars for Rewards immediately upon joining. The new tiered program lets users spend 25 points and customize their drink with different flavors or an extra espresso shot, and perks escalate upon hitting 50, 150, 200 and 400 points.
The company said its loyalty member count has risen 25% over the past two years alone, and it increased 14% year-over-year at the end of Q1, bringing it to a total of 16.3 million. Starbucks Rewards transactions accounted for 40% of sales in U.S. company-operated stores during the same time period, the company said.
Starbucks also plans to test recyclable cups in select markets, and will roll out recyclable strawless lids to all stores in the U.S. and Canada in the next year.