Ryder Ventures into Venture Capital | Industry News
The recent establishment of a $50 million venture capital fund by Ryder System, a leader in shipping, logistics, and truck rentals, might appear unconventional, but it represents the outcome of approximately three years of investment endeavors by the Florida-based organization.
Ryder’s initiative to establish its own venture fund aligns with a growing pattern among corporations that have leveraged the COVID-19 pandemic in the United States as a catalyst to invest in emerging companies – even amidst widespread employment challenges.
This move is crucial for a company like Ryder, which has observed over $6 billion in investments directed towards innovative technologies within its traditionally conservative sector, as reported by company leaders. This substantial amount signifies significant advancements in technology for an industry previously reliant on tools like Excel spreadsheets.
Ryder is not the only company recognizing the importance of proactively engaging with technological advancements to avoid being overtaken by newer, more agile competitors.
Data from Global Corporate Venturing, an industry analytics firm, indicates that 368 corporations made their initial investments in startup companies during the first six months of 2020. This represents a notable departure from the previous corporate investment cycle two decades ago, where large corporations tended to enter the tech industry late and withdraw capital quickly during downturns.
The number of corporations making their first venture investments is almost double the previous peak in corporate funding during the third quarter of 2019, when 177 new companies initiated venture capital investments.
Ryder has previously collaborated with venture firms Autotech Ventures and Plug and Play, a corporate innovation and accelerator, as a limited partner; however, the new $50 million fund marks its first direct venture investment initiative.
“Our board of directors and CEO provided a clear direction to analyze the disruptions impacting our industry and to develop strategies for navigating these changes,” explained Karen Jones, Executive Vice President and Head of New Product Development at the logistics company. “There was widespread discussion regarding blockchain technology, automation, electric vehicles, autonomous vehicles, and asset sharing.”
Historically, the transportation and logistics sectors have had limited interaction with the technology industry; however, the proliferation of globally connected mobile devices, advancements in sensing technologies, increasing vehicle automation, and growing customer demands for faster delivery have propelled this “sleepy little industry,” as Jones described it, into a period of rapid technology adoption.
“Our industry presents a significant opportunity for disruption through the application of available technologies,” stated Jones. “[And] if we are going to experience disruption, we want to be at the forefront, transforming it into an advantage rather than a risk.”
Ryder’s approach centers on establishing an investment framework characterized by maximum adaptability.
The venture fund does not impose limits on individual deal commitments, with the primary objective being to allocate the $50 million over the next five years.
The company anticipates investing in areas such as last-mile delivery solutions, asset sharing platforms, electric vehicles, autonomous vehicles, and next-generation data analytics, machine learning, and related technologies. Nevertheless, Ryder intends to remain open to other possibilities.
“We are open to considering a wide range of ideas, recognizing that we may not have anticipated all potential opportunities,” Jones said.
The company’s investment team, working alongside Jones, comprises four individuals: Rich Mohr, Chief Technology Officer for Fleet Management; Kendra Philips, Chief Technology Officer for the Supply Chain business; Bob Brunn, Vice President of Investor Relations and Corporate Strategy; and Mike Plasencia, Director of Finance.
They will report to the CEO and CFO and will consult with presidents of various business units regarding prospective portfolio investments, according to Jones.
Potential portfolio companies will be evaluated based on both their strategic value to Ryder and their potential for financial returns, Jones explained.
For startups, this could translate into access to Ryder’s extensive customer base of 50,000. “Providing startups with the opportunity to test and validate their technologies while simultaneously enhancing our operational efficiencies offers mutual benefits,” Jones said.