Olam's Innovation Engine: The Nupo Ventures Story
Case Study Overview
In 2019, Olam Group founder Sunny Verghese and Suresh Sundararajan, CEO of Olam Ventures, (later renamed Nupo Ventures in 2022) could have chosen one among a set of traditional vehicles for the company’s impact mission: setting up a foundation, kickstarting a slew of Corporate Social Responsibility (CSR) initiatives, adopting impact investing practices, and many others. Instead, they embraced the corporate venture builder model that would incubate Engine 2 ventures (or a set of next generation businesses) that would carry forward Olam’s legacy. Nupo would build new, asset light, tech-led ventures that leveraged Olam’s expertise in the food and agri-business sector, pursue an independent operating and governance model, while ensuring that they were driven by purpose and profit. If their bet paid off, they both believed it would create significant value for Olam and its shareholders.
It was an ambitious play to tap into new white space opportunities and transform the agri-business space by combining digital transformation and sustainability. Within a span of 4 years, Nupo Ventures got off the starting blocks and was successful in creating four robust new ventures: Jiva, Terrascope, RE, and Tract, with a few more in the pipeline. It all looked promising until Nupo suddenly found itself in the middle of a perfect storm, which began to come to a head in the second quarter of 2023.
Olam had to deal with a significant debt restructuring plan, which began to consume much of the Olam board’s bandwidth and made it challenging for the parent company to continue to support the ventures within Nupo with a line of capital.
Sundararajan knew the next two board meetings at Olam in October and December 2023 would be crucial and could well decide Nupo’s fate. Ahead of the crucial board meeting in December, Suresh carefully weighed each of his strategic options. He knew he needed to devise a plan for every eventuality. This Included building a case for a fresh line of capital from Olam, on the back of Jiva’s and Terrascope’s solid performance over the past 4 years. He knew he would need to find new investors for the two ventures, a challenging task in the middle of a funding drought. If the fundraise did not yield results, a fireside sale would become inevitable.
This case study will examine the opportunities and risks associated with a venture builder model—and whether it is a feasible vehicle for an impact-related mission.
Teaching Objectives
- Understand how large, established multinational corporates can embrace impact and sustainability in an entrepreneurial way, while leveraging their core strengths and experience as strategic advantage
- Understand the strategy and challenges involved in building and running a venture incubator inside a business with a long legacy, straddling both impact and financial returns
- Understand how to set up a portfolio of purpose driven corporate ventures that are sustainable, disruptive, and technology-driven, and also create financial returns for shareholders
Interested in the full case study and teaching notes? Reach out to [email protected] to find out more.
This case study was produced by the Centre for Impact Investing and Practices (CIIP), in collaboration with Artha Global. It is developed as a basis for class discussion. It is not intended to serve as an endorsement, source of primary data, or illustration of either effective or ineffective management. This case includes some copyrighted materials kindly shared by Nupo Ventures Pte Ltd. for use as case exhibits. The authors gratefully acknowledge Nupo Ventures Pte Ltd.’s permission to use these within this case study.
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