British supermarket Tesco has teamed up with grocery giants from around the world on a five-year, $125m (£98.9m) venture capital fund designed to “accelerate innovation”.

The W23 Global fund is a collaborative partnership between Tesco, Ahold Delhaize, Woolworths Group, Sobeys and Shoprite in Africa with the aim of funding “the world’s most innovative start-ups and scale-ups with the potential to transform grocery retail and address the sector’s sustainability challenges”.

W23 Global is led by CEO and chief investment officer Ingrid Maes who has worked in innovation in grocery retail and FMCG for over 25-years and is currently the leader of Australian grocery giant Woolworth’s W23 Australia fund.

Each of the retailer’s is an equal funder and partner in the fund, and their CEOs will sit on the investment committee – meaning that Tesco will contribute $25m over the next five years.

W23 Global start-up partners will be “free to contract with any customers” whether they’re part of the fund or not, “on whatever terms they decide”.

Maes said: “W23 Global is a pioneering international VC fund with a uniquely powerful proposition for both our investors and portfolio companies. At a time when innovation is reshaping retail and value chains across the economy, we aim to offer our investors incomparable access to transformative innovation in grocery and sustainability across the globe.

“W23 Global will also work with its investors to identify common unaddressed challenges and identify entrepreneurs best placed to innovate new solutions. Our ambition is to offer our portfolio companies faster pathways to global scale, without being exposed to a venture fund anchored by a single strategic investor.

“With five of the world’s leading grocery CEOs sitting on our investment committee and access to our broader ecosystem, our founders can test and develop their ideas quickly based on an accelerated understanding of retailers’ needs.”

Tesco chief executive Ken Murphy said: “We are excited to be collaborating with four other leading grocery retailers in this new investment fund. We are passionate about seeking out the best retail innovations and finding ways to make everything we do sustainable, and this partnership allows us to do that on a truly global scale.”

World Retail Podcast

Listen and subscribe to the World Retail Podcast by WRC

Series one of the World Retail Podcast is ‘Disrupt or Be Disrupted: The Six Trends Reshaping Retail’, sponsored by AlixPartners, and brings together the highest-level retailers and industry experts who you would normally only get to hear from at WRC. 

Our special guests will be joining WRC chair Ian McGarrigle to share their experiences and insights into today’s challenging retail industry.

Episode one features Shein, one of the world’s biggest retail disruptors and now established as one of the world’s biggest fashion retailers.  

You can subscribe to the World Retail Podcast on SpotifyApple PodcastsAmazon, or via the WRC website.