Consumer Equity Partners to Invest in Retail Tech, Seeking Grocer Participation
Consumer Equity Partners, a venture capital firm, is assembling an investment fund dedicated to injecting hundreds of millions of dollars into retail technology companies globally. A significant portion of this capital will originate from grocers, according to Tom Furphy, CEO and managing director of Consumer Equity Partners.
The fund, anticipated to begin investments by mid-2025, seeks to enable retailers with limited resources to participate in and potentially profit from developing innovative technologies, Furphy stated. The firm aims to raise between $200 million and $500 million for its Industry Innovation Fund, with approximately a quarter to half of the funds coming from 15 to 25 retailers across the U.S. and other countries.
Furphy indicated the firm is targeting grocers, convenience store chains, mass retailers, pharmacy operators, and dollar stores. Participating retailers will contribute to the fund over a five-year period.
“There’s a lot that’s happening with new technologies that add opportunity and complexity to the shopping experience and the retail experience … [so] there’s a real need here to have a pretty solid investment strategy forward if you’re a retailer,” Furphy said. He previously held executive positions at Amazon Fresh and Wegmans and currently leads Replenium, an e-commerce provider offering auto-replenishment systems.
Furphy observed that while retail faces significant changes, a shortage of investment capital for technology startups gives large retailers like Walmart and Amazon substantial influence. “The big guys are able to do that fairly easily because they have quite deep resources and large balance sheets. But as you start getting beyond the top couple of retailers, the opportunity is often much larger than the balance sheet of any individual retailer,” he added.
Consumer Equity Partners plans to source the remaining funds from international strategic and institutional investors. Furphy and his partners, JJ Van Oosten and Patrick Walsh, will also invest in the fund. The investment strategy will focus on companies in the early or middle stages of development that have already secured capital from other sources, according to Furphy.
According to its pitch the firm has identified six aspects of retail as “particularly ripe for disruption and value creation”:
- Shopping experiences
- Store operations
- Supply chains
- Retail media
- Foodservice
- Health-focused services
Furphy stated that Consumer Equity Partners’ initiative presents an “opportunity to really change the customer experience, to really change the space globally, to really disrupt and improve.” The firm is engaging with potential investors and companies, but details regarding specific commitments are still being finalized.
A key aspect of Consumer Equity Partners’ strategy is to involve retailers directly in the development of technologies through the Industry Innovation Fund. To facilitate this, the firm intends to arrange product tests and require participating retailers to engage in at least one pilot program every two years, Furphy said.
“We don’t want just a bunch of tire-kickers and lucky loos. We want retailers that are committed to innovate,” Furphy noted, adding, “We just really feel like there’s an opportunity to make some bigger swings as an industry. This will enable companies to participate in that and punch above their weight.”
