OEM Investment & Strategic M&A (II)
CONTEXT
We have conducted the following analysis of Venture Capital activity using data from Dealroom and CB Insights. We have corroborated this data and provided context by tracking different media reporting declarations by key people within the company.
We have tracked investment from 2015 to the present day (March 2020). We selected 2015 as the starting point for two reasons. Firstly, and most importantly, 2015 was the year that most OEMs started using the word “mobility” instead of “automotive” — this represented a paradigm shift in their strategic plans. Secondly, it was the year that we launched B4Motion, at least the year it went on the radar.
This document presents information using 6 charts and 2 tools.
Charts:
Investment landscape: A multi-category map with all the mobility investments from each corporation categorized by segment. We also list where the charts are embedded. This resource comprises different sheets:
Funding activity: a table with the number of deals and funding totals by year.
Top funded companies: a list of the most well-funded firms that the company under analysis has invested. Not to be confused with the amount of money the company under analysis has invested.
Deal share by stage: the investment phase at which the startups that the company under analysis has invested in by year
Value chain/enablers and services: Supply chain, shows in which part of the automotive value chain the investee startup is located. Enablers and services, a market that traditionally has not been inside the automotive business, which is now key for its future.
We treat a deal as an acquisition when between 80% (corporate majority) and 100% of a company is purchased. Due to the importance of this move, we are going through all the companies in this category. We do not include exited companies in our charts.
00 | TOYOTA AI VENTURES
We have detected 2 corporations closing deals in the VC space under the umbrella of the Toyota Corporation: Toyota Corporation itself and AI Ventures. It is very important to note that both divisions have the same investment in the platforms we use to track VC activity (CB Insights and Dealroom). We understand that Toyota moved all of its Venture activities from TRI (Toyota Research Institute) to AI ventures back in 2017 when this new division was created. We have made that assumption because it was Jim Adler who made the decision; he also serves as executive advisor at the TRI. Jim Adler is the Founding Managing Partner & Board Member of Toyota AI Ventures and has served as a Board Member since its creation. In light of the above, we have focused all of our attention on investment activity by AI Ventures regardless of the fact that it was created in 2017 and we are analyzing from 2015 to the present day.
AI Ventures has a portfolio of 19 companies, including 1 exit (5.26%), 0 acquisitions (0.0%), and 18 invested companies (94.74%).
At this point, it is worth highlighting Toyota’s significant internal R&D capabilities.This is because if we only look at their investments in startups then it is easy to misunderstand where the company is focusing to remain relevant in the future.
Automotive companies are by their nature the companies with the highest investment in R&D of any sector. And Toyota is the third largest of them all with a ¥9.59 billion year investment in R&D in 2018, ¥10.46 billion in 2019, and ¥11.10 in 2020. Akio Toyoda calls the current context and investment in R&D the “fight for survival”. And the survival depends on developing cutting edge technology as it reshapes the automotive industry.
One of the new key elements within this strategic effort is TRI’s collaboration with Aisin Seiki and Denso to co-create TRI-AD, which has financed an “investment of $2.8 billion to hire around 1,000 employees in order to develop software systems that can powerfully boost self-driving vehicles over the next few years.” The goal of this new division is robotics, which is much bigger than autonomous transportation. The main three pillars of research are autonomous technology, indoor mobility (robots), and new materials for battery-and hybrid- propulsion vehicles. This lab is linked with 4 other divisions to promote innovation in the ecosystem: Toyota Ai Ventures (analyzed below), TRI-AD, Toyota Connected (connected devices and mobility data management), and CSRC (Collaborative Safety Research Center — which researches human-technology integration, crash avoidance… ).
We have deep-dived the venture activity of each arm. And of course, we have the conclusions and future projections extracted from all this information. If you want to know more, write to hello@b4motion.com. And to keep up to date with mobility movements, follow us on Twitter, Linkedin, and our newsletter. Best, B4Team.
