Albertsons and venture capital firm Greycroft announced today the formation of a $50 million fund to invest in emerging companies and technologies in the grocery sector.
By partnering with Greycroft, which has funded companies such as Venmo, The Huffington Post and Plated (which Albertsons acquired last year), Albertsons will gain access to cutting-edge startups with breakthrough technology before they become mainstream.
And technology is a major front in the battle Albertsons is waging against rivals Kroger, Walmart, and Amazon/Whole Foods. Technological innovations up and down the stack from supply-chain management, e-commerce, fulfillment and delivery logistics are changing the way supermarkets provide and consumers shop for food.
This partnership with Greycroft is a much needed move for Albertsons to keep up with its high-tech competition. Amazon is a tech behemoth, with an army of engineers that continually innovates cloud computing, distribution systems and even cashierless stores. Walmart has its Store No. 8 in Silicon Valley to create innovative tech solutions. And Kroger recently upped its investment in UK-based Ocado, which creates robot-driven smart warehouses for faster delivery, as well as formed a partnership with Nuro for self-driving delivery vehicles.
Albertsons inked a deal with Instacart for delivery last year, acquired meal kit company Plated and recently launched a virtual market for its O organics brand. But those are table stakes for any grocery retailer at this point. Starting up a venture fund will ideally give Albertsons a closer look at emerging technologies that are even more bold as well as the ability to execute deals with those startups before other retailers have a chance to.