Renault-Nissan-Mitsubishi has unveiled Alliance Ventures, a new corporate venture capital fund which plans to invest up to US$1bn to support open innovation during the next five years.
In its first year, the fund expects to invest up to US$200m in start-ups and open innovation partnerships with technology entrepreneurs focused on new mobility, including vehicle electrification, autonomous systems, connectivity and artificial intelligence.
With further annual investments, the corporate venture capital fund claims it will become the largest corporate venture capital fund in the automotive industry during the period of Alliance 2022, the mid-term plan launched last year by Renault-Nissan-Mitsubishi.
“Our open innovation approach will allow us to invest and collaborate with start-up companies and technology entrepreneurs, who will benefit from the global scale of the Alliance,” said Renault-Nissan-Mitsubishi chairman and CEO, Carlos Ghosn.
“This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance.”
Alliance Ventures will invest in start-ups to bring new technologies and businesses to the Alliance while ensuring a fair financial return. The fund will make investments at all start-up stages and will incubate both new automotive entrepreneurs and forge new partnerships.
The first deal by Alliance Ventures will be an investment in Ionic Materials, a US-based company developing 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.
Ionic, based in Massachusetts, is the developer of a pioneering solid polymer electrolyte, which enables improved performance and cost effectiveness of high-energy density batteries for automotive and multiple applications.
Such initiatives are aligned with the objectives of Alliance 2022, which aims to strengthen cooperation and to double the annualised synergies generated by Renault, Nissan and Mitsubishi Motors to more than EUR10bn.
The US$200m initial venture capital investment comes in addition to more than EUR8.5bn in total annual research and development investments by Alliance members.
Alliance Ventures will be led by François Dossa, who has more than 20 years of experience in investment banking, plus six years of experience within the Alliance, most recently, as CEO of Nissan Brazil.
The Alliance Ventures team will also draw on business opportunities identified by a Cross-Functional Team of experts from Renault, Nissan, and Mitsubishi.
This initiative complements the Alliance strategy to seek incremental revenues, cost savings and cost-avoidance in areas including electrification, autonomous drive systems and vehicle connectivity.
By the end of its plan, the Alliance will launch 12 pure electric models, using common EV platforms and components, while also bringing to market 40 vehicles with autonomous drive technology and developing robo-vehicle ride-hailing services.
Alliance Ventures will define innovation areas and geographic markets for investment, working with existing research and advanced engineering teams 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 centres of the Alliance member companies, as well as to areas with strong innovation ecosystems.
Renault (40%), Nissan (40%) and Mitsubishi Motors (20%) will jointly fund the entity, which will have a dedicated investment committee to make investment decisions and monitor their performance.
“This investment initiative is designed to attract the world’s most promising automotive-technology start-ups to the Alliance,” added Ghosn.
As part of the Alliance 2022 plan, Renault-Nissan-Mitsubishi is forecasting combined revenues of its member companies will reach US$240bn and annual unit sales will exceed 14m by the end of 2022.