The world’s largest auto alliance has launched a corporate capital fund, Alliance Ventures, that will invest $1 billion to support innovative projects shaping the next generation of mobility over the next five years.
In its first year, Renault-Nissan-Mitsubishi intends to invest up to $200 million into startups and open innovation partnerships with technology entrepreneurs focused on new mobility, including vehicle electrification, autonomous systems, connectivity and artificial intelligence. With further annual investments, Alliance Ventures is set to become the largest corporate venture capital fund in the automotive industry by 2022.
“Our open innovation approach will allow us to invest and collaborate with startup companies and technology entrepreneurs, who will benefit from the global scale of the Alliance. This new fund reflects the collaborative spirit and entrepreneurial mindset at the heart of the Alliance,” said Carlos Ghosn, Chairman and CEO of Renault-Nissan-Mitsubishi.
In addition to funding, the venture fund offers startups access to Renault-Nissan-Mitsubishi’s global scale and research and development departments, which invests approximately €8.5 billion in projects and studies annually. The fund will make strategic investments at all startup stages and will incubate both new automotive entrepreneurs and forge new partnerships.
The venture’s first deal will be a strategic investment in Ionic Materials, a US-based company working to develop solid-state cobalt-free battery materials. The equity acquisition coincides with the execution of a joint-development agreement with the Alliance for the purpose of R&D cooperation. Iconic is the developer of a pioneering solid polymer electrolyte that enables improved performance and cost-effectiveness of high-energy density batteries for automotive and multiple other applications.
Making such investments will help Alliance Ventures identify and support the development of new technologies for potential use by its members. Such initiatives are aligned with the objectives of Alliance 2022, which aims to strengthen cooperation and to double annualized synergies generated by Renault, Nissan and Mitsubishi Motors to more than €10 billion by the end of 2022.
François Dossa, CEO of Nissan Brazil, will lead Alliance Ventures in creating incremental revenues and cost savings in areas of electrification, autonomous driving systems and vehicle connectivity. By the end of its strategic plan, the Alliance will launch 12 pure electric models, utilizing common EV platforms and components, while also bringing to market 40 vehicles with autonomous driving technology and developing robo-vehicle ride-hailing services.
Working with existing research and advanced engineering teams, the Alliance will define innovation areas and geographic markets for investment and will recruit venture capital experts to develop the platform. It is expected to be co-located in Silicon Valley, Paris, Yokohama and Beijing, close to the technology and research centers of the Alliance member companies, as well as to areas with strong innovation ecosystems.
“This investment is designed to attract the world’s most promising automotive technology startups to the Alliance,” said Ghosn.
Renault and Nissan will contribute 80 percent of the fund, with Mitsubishi accounting for the remaining 20 percent. As part of the Alliance 2020 strategic plan, Renault-Nissan-Mitsubishi is forecasting that the combined revenues of its member companies will reach $240 billion and that annual unit sales will exceed 14 million by the end of 2022.