Atlanta's largest retailer is launching its first venture fund, another indication of the city's positioning as a retail innovation hub.
The Home Depot (NYSE: HD) is creating Home Depot Ventures, a $150 million venture capital fund, to strengthen existing partnerships and invest in emerging innovation in the retail industry.
The fund looks to invest in companies that are improving retail operations, such as improving the supply chain, shelf availability, labor conversion and hiring practices, said Mike Locker, vice president of strategic business development.
The Home Depot fund
Home Depot will provide its portfolio companies with access to its executives, intelligence of the retail industry and the resources to pass to commercialization.
The fund will be primarily focused on companies based in North America where the company operates. There won’t be a priority made for Atlanta or southeast companies, Locker said.
The company has not set an exact number of companies it will be looking to invest in with the fund.
Retail innovation trends
Home Depot plans some investments to be a way for the company understand developments in tech and artificial intelligence that the company could leverage for its own strategic initiatives.
“We’re really in venture to use it as a learning tool, to get access to emerging tech and disruptive business models,” Locker said.
Technology has become particularly important to retailers after two years in the Covid-19 pandemic. Now, the first impression people have of a retailer is on an app or website, The Home Depot Senior Vice President of Information Technology Fahim Siddiqui said during an October 2021 Atlanta Inno panel on the future of retail.
Shopper personalization, increased automation, analytical data and immersive shopping experiences are becoming retail staples, experts said in the panel.
Atlanta's retail innovation industry
Atlanta has long been a hotspot for retailers and manufacturers to invest in innovation.
Much of that activity is concentrated in Georgia Tech’s Tech Square, an innovation district in the heart of Midtown. Home Depot, Chick-fil-A, Delta Air Lines, Georgia-Pacific, Boeing all have innovation and technology centers in the area. Most recently, footwear giant Nike confirmed it will create an Atlanta Technology Center in West Midtown to innovate its retail services.
The proximity to Georgia Tech allows those companies to benefit from a pipeline of talent and partner with startups that use university resources. Georgia Tech also hosts startup incubator Creative Destruction Lab, which focuses on e-commerce innovation.
Silicon Road Ventures has a $31 million fund focused on retail innovation, and multiple local startups are working in this space.
Home Depot's previous investments
This is the first formal venture fund for Home Depot, although the company has a history of making investments.
The company recently participated in a $50 million investment in internet-of-things startup Afero. The company’s operating system is installed on every Home Depot smart-home device, such as connected light bulbs and thermostats.
Last year, The Home Depot invested $10 million into three venture capital funds that promote diversity and entrepreneurship: the Base10 Partners Advancement Initiative, L'attitude Ventures and Plexo Capital.
Home Depot is also one of the founding partners of Engage, a startup accelerator and corporate collaboration fund. The program, based in Georgia Tech, helps startups commercialize their products and corporations learn about the newest innovations. The Coca-Cola Co., Chick-fil-A, Delta Air Lines and other top Atlanta companies participate.
