BMW i Ventures, the venture capital arm of BMW Group, has announced a new $300 million fund to further its investment in technologies that make transportation, manufacturing and supply chains more sustainable.
The firm doesn’t operate as a traditional corporate venture capital fund, but rather acts independently from BMW while being fully backed by the German automaker. Its previous €500 million (about $525 million at the time) fund, which was announced when the firm moved to Silicon Valley in 2016, is now at the end of its period for new investments. From now on, new investments will come from Fund II.
Fund I focused more on autonomous and digital vehicle technology, customer experience and advanced production. For example, autonomous truck company Kodiak Robotics, which last week announced an investment from BMW i Ventures, was a part of this fund. Fund II will further emphasize sustainability and zero emissions in all the sectors that lead up to designing, manufacturing and building a car, rather than specifically investing in core car technology.
“Sustainable supply chain is one of the things we’re really interested in right now,” Marcus Behrendt, managing partner at BMW i Ventures, told TechCrunch. “BMW Corp has announced that it wants to significantly reduce its carbon footprint, and therefore it’s looking at all ways of producing this, not just emission from the vehicles, but also the emissions that are produced when manufacturing and developing the cars.”
BMW i Ventures started dipping its toes into such sustainable investments at the end of 2019, investing in Turntide Technologies – a company developing a smart electric motor system – Solid Power – a solid state battery technology company – and Boston Metal – a company looking to decarbonize the metal industry. Its most recent investments, says Behrendt, are indicative of what Fund II will bring. The firm has already made its first investment out of the new fund with U.K.-based Motorway, a used car marketplace.
“We have two goals right now, so the first is the financial goal and that’s our most important driver,” Kasper Sage, managing partner at BMW i Ventures, told TechCrunch. “Certain CVCs out there don’t really care for the return on investment, they just get to benefit from the business deal that comes with the investment, which could actually hurt the business they’re investing in. Our goal is to make the company as successful as we possibly can.”
BMW i Ventures’ second goal is to provide strategic value back to the “mothership,” or BMW Group in Munich. By mainly investing in early stage companies, the firm has an early market signal that it can convey back to BMW.
“In some cases it’s just making them aware that this new technology exists and might be coming your way,” said Sage. “For example, we invested in Lime, so that’s micromobility, nothing that will ever make its way into a car. But it is important to understand that this is a part of the future of how people move from A to B.”
Behrendt and Sage both said BMW i Ventures has no intentions of acquiring any of its investments, but rather wants to be at the forefront of finding companies with high potential that can work with BMW or the rest of the industry in the future.
Sage said the firm has had 12 exits so far, plus six public companies at the moment and one that recently filed for a S-1 and will soon be public.
“We don’t need corporate buy-in to make an investment,” said Behrendt. “We do consult our engineers for due diligence and we also connect them with other startups. We’re trying to combine the best of both worlds. So we are acting like a financial VC, we’re taking board seats, we’re leading rounds, we can make quick decisions. And on the other hand we’re providing all the connections within our organization to the company.”
The startups that BMW i Ventures invests in get the benefit of networking with BMW engineers and employees and learning from a legacy company how the automotive ecosystem works. Behrendt says for a company like Solid Power, where the technology is is another four or five years out, there’s a strong collaboration between BMW’s business unit and the company to help them grow.
“This is a win-win situation,” said Behrendt. “We are introducing them and will bring them into the company, they will be talking to the right engineers. There’s no guarantee that they will get a contract in, but they will start working together and exploring and getting help and maybe helping out with quick solutions.”
Source: Tech Crunch