FM Capital Launches $150M Automotive Investment Fund

FM Capital Closes $150 Million Fund for Automotive and Transportation Investments

First Move Capital, a venture firm located in Boulder, Colorado, specializing in investments within the automotive and transportation industries, has successfully finalized a new $150 million fund. The firm’s portfolio already includes investments in companies like Frontier Auto Group, Vroom, and Via, a mobility-as-a-service provider.

Fund Backing and Allocation

The new fund received support from a diverse group of existing strategic investors. These include original equipment manufacturers (OEMs), automotive dealers, distributors, fleet management companies, insurance providers, software developers, and family offices. All proceeds from this funding round will be dedicated solely to new investment opportunities, as stated by the company on Thursday.

Current Investments

FM Capital has already deployed capital from the oversubscribed fund into seven companies. These include Gatik, an autonomous vehicle technology startup, Tekion, a cloud-based automotive retail platform, and Revolution Parts, an e-commerce business focused on automotive components.

“We reached the maximum amount we aimed to raise, but have only utilized a portion of those funds,” explained Managing Partner Mark Norman in a recent discussion. “We remain actively engaged in seeking new investments and anticipate continued activity over the next several years.”

FM Capital’s Evolution and Investment Strategy

FM Capital was initially established in 2012 with a $40 million fund. This initial fund focused on auto commerce and dealership technologies, alongside broader retail and enterprise software ventures.

The firm’s second fund, exceeding the first in size at $90 million, marked a strategic shift towards a dedicated focus on the automotive sector. This included areas such as auto commerce, autonomous driving, sensors, connectivity, electrification, and shared mobility.

Typically, FM Capital invests between $5 million and $10 million in companies offering what its partners consider “transformative solutions in transportation,” generally at the Series A funding stage. Norman clarified that the firm occasionally participates in later seed rounds when companies demonstrate commercial viability and revenue generation. He also noted that one seed deal has already been completed from the seven investments made with the new fund.

Geographic Reach

To date, FM Capital has invested in a total of 40 companies located across North America, Europe, and Tel Aviv.

Future Outlook: Electric Vehicles and Beyond

Looking forward, Norman identifies significant opportunities arising from the increasing adoption of electric vehicles (EVs) and alternative propulsion systems.

“A substantial transformation is underway in the realm of propulsion, largely driven by governmental regulations globally,” Norman stated. “Alternative fuels, their distribution, and the associated service infrastructure are currently experiencing considerable change. This encompasses the technologies powering vehicles – the transition from internal combustion engines to predominantly EVs – and the subsequent impact on downstream service infrastructure, residual value assessments, and overall vehicle lifecycle valuation.”

Recent Investment Example: Indigo Technologies

Norman highlighted FM Capital’s recent investment in Indigo Technologies as an example. This startup has developed a vehicle platform featuring an in-wheel motor and suspension system, optimizing space utilization.

Software Opportunities and Enterprise Solutions

Norman also emphasized the continued potential within the software sector, particularly as more connected vehicles enter the market. He further noted opportunities in enterprise software solutions.

“The traditionally fragmented retail landscape – encompassing car rentals, dealerships, and fleet management – is undergoing consolidation,” Norman explained. “Consequently, the demand for centralized tools and data-driven insights is significantly higher than in the past, presenting a substantial opportunity within the enterprise software domain.”