Walmart’s Corporate Venture: Disrupting Retail Through Innovation

Have you ever wondered what a good corporate venture example looks like? Walmart is one powerful example that has changed the way corporate ventures invest.

Walmart mainly focuses on investments like innovative tech and AI-related tools. This helps Walmart enhance its customers’ experience to the fullest. Walmart’s venture capital and startup incubator invests in innovative startups.

This blog is a case study of how Walmart went from being a small store to starting its venture arm.

Introduction to Walmart’s Corporate Venture

Walmart was founded as a small retail store in 1962. It is now one of the biggest retailers in the world. At the end of January 2024, it had a revenue of USD 648 billion.

Walmart doesn't just rank high in revenue. Its strategy includes high employment, which has resulted in its highest global employee rank: 2.1 million employees in 2023.

With so many achievements under its name, Walmart did not want to stop. A big part of its success is its corporate venture capital arm.

Corporate venture capital investments have been a growth and innovation strategy for a long time. Almost all big organisations have venture arms. And the others want to learn how to start a venture capital firm. CVCs are a strategy to stay ahead of the competition by investing in innovative tech.

Walmart’s Strategic Approach to Venture Investments

Walmart has an internal venture capital called Walmart Venture.

Additionally, in 2019, it launched Store N°8, an incubation arm. Incubators invest in the company in that they provide resources and advice to founders.

Walmart’s corporate venture is eyeing AI-related patents. They are vastly interested in integrating virtual reality and AI into everyday applications, like their virtual on. Walmart filed over 3,000 patents alone from the AI industry.

Walmart’s corporate venture aims to create a fully automated retail experience. They started this with image-based scanning, aka self-checkout.

An example of its strategic venture approach is Walmart’s acquisition of Flipkart. In 2018, Walmart made a USD 16 billion^[1] investment in the Indian store.

How Walmart’s Ventures are Transforming Retail Innovation

The organisation believes it can make its customer service experience a lot better. They want to do this by integrating deep tech advancements like smart factory AI.

Walmart is trying to set a unique example for the retail industry. Its smart retail experience sets it apart from its competitors. Walmart’s investments aim to build on this approach by adding AI and automation to its company.

Walmart’s ventures primarily focus on:

• Improving customer service, not increasing profits.

• Investing in companies that will eventually benefit Walmart.

• Turning the retail experience unique rather than mundane.

With all of these important goals in mind, Walmart launched Store N°8. Walmart’s corporate venture wanted to train new startups to its advantage. They provided funding for companies that would increase Walmart’s operational efficiency.

The approach was to invest in and grow startups independently, which would later benefit the core business. Walmart decided to invest its time in projects related to robotics, extended or virtual reality (XR), AI, and fintech.

5 Key Areas of Focus in Walmart’s Corporate Venture Portfolio

Walmart focuses mainly on improving its service to retain customer loyalty. Good service is directly proportional to profits through customer loyalty.

Walmart’s venture capital and incubator keep their focus on companies specialising in:

1. Technological Advancements

They have an idea to enhance their internal analytics with the help of AI. For example, making strategies and influencing consumer behaviour by analysing and predicting data.

Investing in innovative tech boosts Walmart's functionality and sustainability.

2. E-Commerce

Walmart launched its online store with a positive beginning. To make its online experience user-friendly, it focuses on marketing and software. Software developers will make user experience better, while marketing will increase their global outreach.

3. Reduced Carbon Footprint

As a retailer, Walmart’s carbon footprint is high. They are the first retailers in the U.S. to promise such zero emissions. Their goal is to reduce emissions by 35% by 2025^[2] and by 65% by 2030.

By partnering with resilient sources and renewable energy industries, they are on their way to reducing carbon footprints. They collaborate with suppliers to increase sustainability.

4. Electric Vehicles

EVs are a surprising area of focus for a retail store. But since Walmart is focused on reducing its carbon footprint, it targets zero emissions by 2040. This means changing the way their supply chain works. Instead of fuel-based vehicles carrying their supplies, they want to make the switch to EVs.

Moreover, Walmart aims to make its last-mile delivery vehicles fully eco-friendly, making a complete switch to hydrogen-fueled vehicles and Electric Vehicles.

5. Healthcare and Wellness

Walmart also supplies healthcare and wellness products. Naturally, Walmart’s corporate investments would want to make its healthcare products the best for its customers.

Walmart invests in health tech startups that provide healthcare services, such as telehealth provider MeMD.

Five Innovations Backed by Walmart’s Corporate Venture

The venture arm and incubator invested in industries related to retail enhancements. Fintech has been part of their focus areas to ease the corporate side of the company.

The innovations backed by Walmart are modern ways of making the consumer experience better. From the in-person store to the online one, they have partnered with and trained AI-powered innovations.

1. Delivery by Drones

In 2021, Walmart invested in DroneUp, which launched a drone-based delivery system.

2. Fintech

Starting in 2025, Walmart’s investment in Fiserv will allow customers to link their bank accounts to their online store.

3. Self-Checkout Technology

Alert Innovation’s fully automated retail solutions joined Walmart’s retail solutions.

4. Last-Mile Delivery Solutions

To make their delivery systems eco-friendly, Walmart invested in an autonomous vehicle startup, Nuro.

5. Sustainability Projects

As a part of its zero emissions promise, Walmart is looking to invest in innovations. They are focused on sustainable packaging or eco-friendly products.

Walmart’s new-age drone delivery system was its first step in reducing its carbon footprint. The drones are on-demand and also 4 times lighter than delivery trucks.

Many such innovative ideas are what Walmart expects from its corporate investments.

To Sum it Up

Walmart’s evolution from a small store to a global retail giant shows how effective corporate investments can be. By launching Store N°8 and focusing on new technologies, Walmart’s corporate venture is changing the retail experience.

Walmart’s key investments in AI, sustainability, e-commerce, and health tech bring efficiency. With initiatives like drone deliveries and automated checkout, Walmart is preparing for a better future. Their primary goal is to prioritise convenience and sustainability.

This helps Walmart stay competitive and sets a standard for the retail industry. The company continues to invest in industry innovations, highlighting effective corporate investments.

FAQs

1. Does Walmart have a venture fund?

Yes, Walmart has a venture fund. Walmart’s corporate venture has made the retail industry better. It has set an example of the effectiveness of good venture capital. They also launched a startup incubator called N°8 that invested in AI-related startups.

By investing in areas like fintech, deep tech, sustainability, and health tech, Walmart’s venture fund set itself apart from other retailers. Their end goal in forming a venture fund is to integrate it into their core business.

2. What is Walmart's corporate structure?

After forming in 1962, Walmart was divided into regional and functional divisions. These divisions are Walmart U.S., Walmart International, and Sam’s Club.

Other than that, Walmart’s corporate structure is hierarchical. Regional managers supervise multiple stores. Individual store managers handle the local store's daily operations.

The corporate and field managers have meetings where they update each other on the functionality. This keeps the store symbiotic and harmonious.

3. Does Walmart have joint ventures?

Yes. Walmart is an opportunistic brand and likes to invest in various areas. They have a joint venture with Eko, an interactive video developer. This venture was formed for interactive storytelling.

Walmart had formed a joint venture in India in 2006 with Bharti Enterprises which was later dissolved. They have multiple partnerships with Indian brands like Flipkart, Myntra, and PhonePe.

4. What is Walmart's corporate-level strategy?

Walmart believes in prioritising its customer retail experience. Its corporate-level strategy is to increase innovations through investments. Its corporate venture is interested in companies like automated retailers, AI-related innovations, and sustainable vehicles.

Walmart has the highest number of employees in the world. This is why its corporate strategy needs to include effective communication with store managers.

1. USD 16 billion - Link ↑
2. 35% by 2025 - Link ↑