Lisa Smith leads BTomorrow Ventures, a newly formed corporate venture capital (CVC) unit of UK-based tobacco products provider British American Tobacco (BAT). BTomorrow Ventures began recruiting team members at the end of 2019 before completing its first investment in June 2020.
Smith said: “Our corporate is undergoing a massive transformation and having a CVC unit that drives investment is one of the key foundational pillars of helping accelerate that transformation.”
BTomorrow Ventures is investing out of a £150m ($213m) venture fund that will be completely deployed in the next 18 to 24 months. The unit is aiming to reduce the health impact of its business by offering a greater choice of enjoyable and less risky products for adult consumers.
On a global scale, the unit will invest from the seed to series A stage but will also seed large and medium-sized deals through a separate vehicle. In addition, it plans to raise a second venture fund in the near future to avoid interrupting its investment activities.
Smith said: “We are looking for people that have a consumer-facing product that delivers real functional benefits in this on-the-go wellbeing and stimulation space, and it is as broad as that. We are exploring the space and we are using our investment capability to build knowledge [of that space] in the broadest way possible.”
The unit has completed more than 12 investments to date in less than a year across the globe, having recently closed an investment in a UK-based company that has a portfolio of functional chewing gum products.
BTomorrow Ventures made a $176m strategic investment in Canada-based cannabis products manufacturer Organigram in March 2021.
BTomorrow Ventures has also had to adjust to new business practices during a time of significant disruption caused by the covid-19 pandemic. All of its investments have been conducted virtually and the CVC team has yet to meet the BAT management teams, she said.
“That is kind of strange as an old-school investor. When I was at Unilever Ventures, we obviously met everyone, looked [them] in the eye and shook their hands. Now we are waving through a screen, so it is a very different world.”
Smith added her team also had to be recruited virtually while they were in stealth mode.
In reaction to the covid-linked disruption, companies have had to quickly pivot their business models and embark on new commerce routes, Smith said.
“It has really separated out the quality of the management teams, so I think you were left with a very robust set of investments.”
She was previously a chief engineer at consumer goods producer Unilever from 1996 to 2000, before joining consulting firm McKinsey in 2004. It was at McKinsey that she began to incorporate her passion for healthcare into her day job.
Smith worked at McKinsey for a few years before returning to the investment space by joining Unilever’s corporate venturing arm, Unilever Ventures, in 2006.
