A £ 100 million venture fund launched by the founders of Innocent smoothies has secured £ 48 million in public money to invest in next-generation UK consumer brand businesses.
Jon Wright, Rich Reed and Adam Balon have invested up to £ 5 million a year since 2013 in start-ups such as Deliveroo and Babylon Health, drawing on the proceeds of the sale of Innocent to Coca-Cola that year.
Their team at JamJar Investments, which includes partner Katie Marraché, have now raised a second fund of more than £ 100 million, including the £ 48 million from the British Business Bank’s enterprise capital funds – making JamJar the largest such fund to date.
Reed, 49, said: “The heart of the fund – half the money – is the great British taxpayer. Our job is to take the UK taxpayers’ money, use it to help create the next wave of UK-based entrepreneurs that are going to create UK jobs, UK wealth and UK opportunities, and return a profit to the UK taxpayer. Whoever thought of that deserves a knighthood because it is properly good thinking. ”
He added: “Why us? We have a track record of doing it with our own money. We showed them the performance of our fund, the methodology. I can say this on behalf of the great British taxpayer, no one has put us through a greater due diligence process than the British Business Bank.
“They really, properly, deeply check out everything that you say; that you have delivered what you said; they speak to so many people in your network to make sure you are honest, hardworking and reliable. They do not sit there and listen to the pitch. It was an 18-month due diligence process, as well as it should be. ”
JamJar was an early investor in four unicorns – companies valued at more than $ 1 billion – such as Deliveroo, Babylon Health, Oatly and ManyPets, the new name for pet insurer BoughtbyMany. It also backed Tails.com, the subscription dog food business that sold a majority stake for a “handsome” sum to Nestle in 2018.
Reed said that he, Balon and Wright were the second-biggest investors in the fund, followed by founders of previous JamJar investments and also friends and family via a £ 2.4 million raise on the crowdfunding site Seedrs.
“If you want pressure, that’s how you put yourself under pressure,” Reed said. “You get the British Business Bank’s money, your own money, and then all your friends and family and colleagues’ money. It focuses your mind. ”
JamJar will look at promising businesses at the start-up to initial expansion phase, investing between £ 500,000 and £ 3 million. However, Reed said the size of the new fund gave it the firepower to take part in follow-on rounds of investment, something it could not do with its earlier fund.
Reed said being entrepreneurs gave JamJar an edge over other professional investors who had little operational experience.
“Until you have created and run a business, gone through all the hot, sweaty nights, and the panics, and then the elation and everything in between, I do not think it’s something you can learn: it is something you have to do . ”
He said JamJar’s approach to working with founders was to “either be useful to them or get out of the way”. The team have a four-pronged approach to assessing whether to invest, looking at the strengths and motivations of the people involved, the merits of the product or service, the price and size of the investment and whether they “would be proud” of the business.
Reed said JamJar investments that had not worked out included Gojimo, a GCSE revision app that was acquired for an undisclosed sum by Telegraph Media Group in 2017, and SuperCarers, which launched in 2015 and was bought for an undisclosed sum by home care provider Home Instead in 2020.
“We will still make mistakes,” he said. “Investing is a lot of time feeling stupid. You say ‘no’ to things you should have said ‘yes’ to, and ‘yes’ to things you should have said ‘no’ to. And even when you say ‘yes’, you realize afterwards you should have invested more. ”
Innocent was acquired by Coca-Cola in a deal reportedly valuing the smoothie maker at an estimated £ 320 million.