Distill Ventures pledges $5m to minority founders
Diageo-backed Distill Ventures will invest US$5 million in drinks brands founded by underrepresented groups to boost diversity in the industry.
Distill Ventures (DV) was established in London in 2013. Backed solely by Diageo, it aims to support entrepreneurs as they strive to grow their drinks brands.
Distill Ventures said it will invest US$5m in minority founders over the next 12 months as part of a range of global initiatives, including the launch of a new Pre-Accelerator Programme.
Through the new programme, the company will create a ‘more accessible runway to unlock seed funding’, a key barrier to growth, according to business founders from underrepresented groups.
Distill Ventures said funding is crucial for new firms, but racial and gender wealth disparities have prevented founders from having access to capital.
According to the 2020 Crunchbase Diversity Spotlight Report, just 2.4% of venture capital financing across all sectors in the US has gone to Black and Latinx founders since 2015.
Furthermore, in the UK only 3% of founders who raised venture capital funding for their start-ups identified as Black, while 7% identified as Asian, and 3% as mixed/multiple heritages.
Frank Lampen, CEO of Distill Ventures, said:“In eight years, DV has built a portfolio of next generation brands, but it has become clear to us that we want to dedicate focus on diversifying the ownership of drinks brands by addressing a key barrier head on: access to seed funding.
“We know that opportunities for entrepreneurs are not equally accessible to all, and so at the heart of our company-wide inclusion and diversity initiatives is the creation of a new Pre-Accelerator that will enable us to work with really early stage founders. This change cannot happen overnight, but we are excited to help evolve the drinks world, one founder at a time.”
Distill Ventures will look for potential founders through their search pipeline, with an initial focus on the US and UK.
Once selected, the firm will help founders develop a six-month business plan to present to Distill Ventures and Diageo. Successful applicants will be given initial funding of between US$250,000 and US$500,000, and will work in partnership with Distill Ventures to establish their company.
After this stage, the founders will have the opportunity to form a ‘longer-term partnership’ with Diageo and Distill Ventures to boost their business.
Furthermore, Distill Ventures will increase its inclusion and diversity efforts by offering a six-month educational programme to its employees to address unconscious bias.
The company has also established a partnership with Wine & Spirits Recruiting in a bid to reinforce inclusive hiring practices.
Heidi Dillon Otto, managing director, Distill Ventures North America, added: “We recognise that diversity in ownership will fuel broader growth and innovation in our industry and will enable our portfolio to connect with a wider range of cultures and consumers. By bringing new, diverse founders into the world of drinks, we hope to create a ripple effect, in turn empowering them to mentor, hire, and train future drinks entrepreneurs.”
Diageo’s group strategy director, Liz Brown, noted that the move will support the company’s “ambitious 2030 goals”. Smirnoff owner Diageo is aiming to increase diversity across its leadership teams as part of a 10-year plan.
Through Distill Ventures, Diageo has made minority acquisitions in Danish distillery Stauning and Australian whisky producer Starward. The firm also acquired alcohol-free ‘spirit’ Seedlip and Belsazar vermouth following initial investments.