(NYSE:UL), the leading consumer goods company in India, is planning
to set up a venture capital fund to invest outside its core
business in the field of media and technology in the country.
Unilever Ventures Limited along with its two closely associated
partner companies - Unilever Technology Venture and Langholm
Capital- have been investing in the west in healthcare, clean tech,
water, media and environmental services through seed capital in
startups, expansion capital in established businesses and by
supporting management buyouts in companies seen as strategic
additions to its existing portfolio. Unilever which competes with
Procter & Gamble (
), Colgate-Palmolive (NYSE:CL) and Kimberly-Clark (
) now plans to extend its model to emerging economies beginning
with India and China.
We value Unilever's stock at a
Trefis price estimate of $35
, roughly at a 10% premium to the current market price. Here we
take a closer look at the various business sectors in India that
Unilever is likely to invest in.
While India is the second most populous nation, and it has a
young demographic with almost half of the population under 25
years. This combined with sound information technology capabilities
makes India an ideal for investments in technology startups.
Business Areas of Interest to Unilever
While Unilever's venture capital investments are more financial
than strategic in nature, Unilever still seeks investment
opportunities that leverage its existing brand, technology or
In India's context, we expect Unilever to fund technologies that
help it reach out to more consumers in remote and inaccessible
parts of the country. This is in line with Unilever's Project
Shakti, wherein rural women serve as direct-to-consumer sales
distributors selling Unilever's soaps and shampoos in villages with
no retail distribution network, no advertising coverage and poor
roads and connectivity. Information systems using mobile phone
platforms that help Unilever receive orders and track shipments on
a more real-time basis could particularly be of interest to
Technologies in biodegradable and eco-friendly packaging
material, and low cost manufacturing using renewable energy sources
could be other areas of interest helping Unilever reduce its
overall carbon footprint.
View our detailed analysis for Unilever here