Dunnhumby is aiming to give a leg up to the bright young things of consumer data analysis by setting up its own venture capital arm to plough money into retail focused start-ups.
The company, wholly owned by Tesco and credited with turning the business into the retail giant it is today, has already made three initial investments of between £100,000 to £500,000 through its Dunnhumby Ventures division.
Although the first three investments are for companies based in the US – InfoScout, The Shelf and Coherent Path – funding will also be available in the UK, as well as in other international markets. The fund plans 10 investments annually.
The thinking behind the launch is that Dunnhumby and Tesco will be able to tap into data innovations as they are being developed, putting the businesses ahead of the curve.
Dunnhumby Ventures is being spearheaded by global head of investments David Balter, the Boston-based founder of BzzAgent, the word-of-mouth marketing company acquired by Dunnhumby two years ago.
He said: “To me, it’s what does each one of these entrepreneurs bring to the table which is going to make them successful. We have a clear vision… but we’re aware that we don’t know what we don’t know.
“Last week the chief executive of Tesco, Philip Clarke, was in Boston, we spent the day with him. We toured some of the innovations that were happening in Boston like the MIT Media lab. You’ve got the CEO of Tesco spending his time looking at innovation, thinking about innovation, and if you look at Dunnhumby and Dunnhumby Ventures… it’s in lock step.
“In tomorrow’s world, your retailer will know you [what you] like, and shop for it once every two weeks, which is why a personalised discount will appear simultaneously on your mobile phone and discreetly on the digital shelf as you wander by.”
But, he says, the only way to get customer loyalty “is to put what you want in front of you… this is about foundations of trust. The customer has to benefit first”.
Hudl ‘will build Tesco customer links’
Dunn and Humby target social media
Dunn tells Facebook; ‘be more open’
Dunn and Humby target theatreland
Dunn and Humby finally exit
Dunnhumby buys marketing firm
Tesco ‘to boost direct, digital spend’
Data at heart of £1bn Tesco revival
Clive Humby: ‘Big data isn’t scary’