IT SEEMED like such an excellent idea. Launched by Unilever four years ago, My Home aimed to promote the consumer giant’s Persil and Cif cleaning brands while introducing a bit of professionalisminto the domestic cleaning and laundry market.

‘It started right, but the executives did not have the professionalism from learning by doing it,’ said John Coombs, managing director of Unilever Ventures, a new business established six months ago with the aim of fostering such ideas and, with luck, creating some new blockbusters for the group.

This phenomenon, known as corporate venturing, is not new. A growing number of companies, particularly in the technology industry, are using venture capital models to help find innovative products and services. Unilever Ventures is unusual, however, in that it invests in start-ups, the kind of businesses that struggle to get the attention of more conventional venture capital firms.

‘Venture capitalists will not invest in anything that does not have the potential to be a $1 billion business with a 20 per cent margin. If we had those criteria, we would not invest in anything,’ he said. ‘But we do want the chance of upside.’ He said a company that was looking to achieve only pounds 10 million turnover within five years ‘would not be for us – but that is not to say it has to have the potential to be a $1bn business.’

My Home is a good example. Originally established as a trial in west London, Unilever quickly realised that it could not make the economics of a cleaning service work against competition from the black economy. Coombs’s team was given the chance to assess the business and it concluded that the laundry service was the most attractive part.

‘The problem was how do you cope with driving around in vans between the customer and the laundry. The answer was to get the customers to bring it to you.’ My Home was transformed into Persil Service, a laundry business with outlets in Sainsbury’s supermarkets. Trials in eight stores were successful and it is being rolled out to 150 others.

Coombs says it was a ‘huge challenge’ to get things like the quality control right – if you are paying for someone to iron your shirts, you want to be sure that the creases are in the right place. But, if Britain follows the US, where 50 per cent of shirts are ironed outside the home, there could be significant potential.

Unilever Ventures is a place where that potential can be identified before it is swallowed in the Unilever bureaucracy. It is located just behind Piccadilly Circus in the centre of London, rather than at the group headquarters in Blackfriars, and has venture capitalists as well as Unilever marketing men on the team.

Some of the business ideas will be generated from other parts of Unilever but it is also looking for external suggestions. As virtually the only venture capital company considering start-ups, Ventures is inundated with requests for backing, but most are turned down, says Coombs. Ideas for health drinks and sandwiches in particular abound but neither meet Ventures’ criteria: it is focusing on the three key areas of health and well being, liberating time at home and using technology which has originated elsewhere in Unilever. And he is looking for businesses that are already up and running, albeit only in a small way, rather than for ideas.

‘From idea to customer outlet is the riskiest bit. A lot of people have got good ideas but can’t execute them,’ he says.

To date, there are seven businesses at various stages of development, including Persil Services, and a further 10 that could become full-grown businesses if they hit initial targets.

Other businesses include: Rocket, which supplies meal kits at railway stations, allowing commuters to take home fresh food which they can quickly prepare; Fariba, which aims to be a healthy alternative to fast food businesses like McDonald’s, with hot and cold wraps; Ponds, offering beauty centres in Spain; Insense, a new system of wound care that disinfects itself; Brainjuicer, an internet- based market research business; and BAC, a biotech business that grew from the technology used in Clearblue pregnancy testing kits.

Coombs says Ventures’ success will be measured in two ways: whether it has created new products and services for the Unilever group – although it does not have first refusal on any of the businesses, it is expected that it will acquire some of them – and whether it produces a financial return. ‘There is a reason no other venture capitalists are in this area. It is difficult to make money. We are not expecting astronomical returns.’

Initial funding for Unilever Ventures is euros 40m (pounds 29m), to be spent over the next three years. The companies it invests in can seek other sources of finance and Insense is looking for external funding.

Coombs and his team are active investors. ‘We do not just give money and let them get on with it. There is no substitute for using experienced people, who have done it before. So our approach is to attract external talent into Ventures, which we do by offering them equity.’

Coombs thinks that, eventually, other Ventures business could be set up elsewhere. The US, source of most consumer innovations, is an obvious place. Unilever is already doing some corporate venturing there with a euros 30m invest ment in Unilever Technology Ventures, based in Santa Barbara, which is seeking technology-based funds and start-ups.

The third leg of the corporate venturing activity is Langholm Capital Partners, a venture capital fund that raised euros 225m – 44 per cent of that from Unilever – last September. Located in the same building as Unilever Ventures, its aim is to acquire majority stakes in private British and European companies worth euros 20m-euros 200m.

As with Ventures, the focus is on businesses that are positioned to take advantage of the change in consumer lifestyles such as the ageing population or our busy lifestyles.