BMW i Ventures Launches $300M Sustainable Tech Fund

BMW i Ventures Launches $300 Million Sustainability Fund

BMW i Ventures, the venture capital division of the BMW Group, has unveiled a new investment fund totaling $300 million. This fund will be dedicated to supporting technologies that promote sustainability across the transportation sector, manufacturing processes, and supply chain management.

Independent Operation with BMW Backing

Unlike many corporate venture capital entities, BMW i Ventures functions autonomously, despite receiving full financial support from the German automotive manufacturer. The firm’s initial €500 million fund (approximately $525 million at its inception) is now concluding its investment period, having been established when BMW i Ventures relocated to Silicon Valley in 2016. Future investments will originate from this newly established Fund II.

Shifting Investment Focus to Sustainability

Fund I primarily concentrated on advancements in autonomous vehicle technology, digital vehicle solutions, customer experience enhancements, and innovative production methods. For instance, Kodiak Robotics, an autonomous trucking firm, benefited from investment through this earlier fund. Fund II, however, will place a greater emphasis on sustainability and the pursuit of zero emissions throughout the entire automotive lifecycle.

This includes all stages – from design and manufacturing to the final vehicle build – rather than solely focusing on core automotive technologies.

Addressing the Carbon Footprint

“A sustainable supply chain is a key area of our current interest,” stated Marcus Behrendt, a managing partner at BMW i Ventures, in an interview with TechCrunch. “BMW is committed to a substantial reduction in its carbon footprint, and this necessitates a comprehensive approach to production, encompassing not only vehicle emissions but also those generated during manufacturing and development.”

Early Investments in Sustainable Technologies

BMW i Ventures began exploring sustainable investment opportunities in late 2019, with investments in companies such as:

• Turntide Technologies: Developing intelligent electric motor systems.
• Solid Power: Pioneering solid-state battery technology.
• Boston Metal: Working to decarbonize the metal production industry.

Behrendt indicated that recent investment decisions foreshadow the direction of Fund II. The firm’s initial investment from the new fund has been made in Motorway, a U.K.-based used car marketplace.

Prioritizing Financial Returns and Strategic Value

“Our primary objectives are twofold, with financial returns taking precedence,” explained Kasper Sage, also a managing partner at BMW i Ventures, to TechCrunch. “Some corporate venture capital firms prioritize business deals over investment returns, which can ultimately be detrimental to the invested company. Our aim is to maximize the success of each company we support.”

The second goal is to deliver strategic benefits to BMW Group headquarters in Munich. By investing in early-stage companies, the firm gains valuable market insights that can be shared with BMW.

Providing Early Market Signals

“Often, this involves simply alerting BMW to the existence of emerging technologies,” Sage elaborated. “For example, our investment in Lime, a micromobility provider, may not directly impact car development. However, understanding evolving transportation trends is crucial.”

Collaboration, Not Acquisition

Both Behrendt and Sage affirmed that BMW i Ventures has no plans to acquire its portfolio companies. Instead, the firm seeks to identify and support high-potential businesses that can collaborate with BMW or contribute to the broader industry.

Track Record of Success

Sage reported that the firm has achieved 12 successful exits to date, alongside six publicly traded companies and one recently filed for an S-1 registration, anticipating an upcoming IPO.

Blending Financial and Corporate Expertise

“We don’t require corporate approval to make investments,” Behrendt clarified. “We do consult with our engineers during due diligence and facilitate connections with startups. We strive to combine the strengths of both financial and corporate venture capital – making swift decisions, leading investment rounds, and taking board seats, while also leveraging our internal network.”

Benefits for Portfolio Companies

Startups receiving investment from BMW i Ventures gain access to networking opportunities with BMW engineers and employees, as well as insights into the automotive ecosystem. Behrendt highlighted the collaborative relationship with Solid Power, where ongoing discussions between BMW’s business unit and the company are fostering growth, despite the technology being several years from full implementation.

“This is a mutually beneficial arrangement,” Behrendt concluded. “We facilitate introductions and encourage collaboration, offering support and potential solutions, without guaranteeing contracts.”