New venture fund looks outside of Alliance boxes for breakthroughs
Ionic Materials is a young US-based company developing cobalt-free materials, such as polymers, for solid-state batteries. Now, it is the first beneficiary of a new venture fund founded by the automotive Alliance of Nissan, Renault and Mitsubishi called, appropriately, Alliance Ventures.
Poised to pump $200 million this year alone — $1 billion is planned for investment over the next five years — the fund will focus on financially backing various startups and other efforts in the field of mobility, with an emphasis on "vehicle electrification, autonomous systems, connectivity and artificial intelligence." Led by François Dossa, most recently the CEO of Nissan Brasil, Alliance Ventures will burnish the €8.5 billion ($10.18 B) annual internal R&D efforts of the three partner companies.
Says Alliance chairman and CEO Carlos Ghosn of the scheme:
"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. This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance."
When fully implemented, Alliance Ventures will have offices near the major technology centers of the world: Silicon Valley, Paris, Yokohama and Beijing, and help the Alliance partners achieve its 2022 goal of producing, among other things, 12 all-electric vehicles, using shared platforms and components. Obviously, if one (or more) of the recipients of this new investment develops a true commercially-viable breakthrough, the benefits may be realized far beyond that.
Click on the video (above) to see some ballistic battery testing of the Alliance Ventures' first recipient Ionic Materials. You can get all the available details about this innovative venture fund in the official press release below:
Alliance Ventures To Prioritize Next-Generation Mobility With $200 Million Year-One Funding
Renault-Nissan-Mitsubishi, the world's leading automotive alliance, today announced the launch of Alliance Ventures, a new corporate venture capital fund that plans to invest up to $1 billion to support open innovation over the next five years.
- New entity to act as main interface for start-ups, investors and the venture capital ecosystem
- Fund prioritizes open innovation in new mobility, including electrification, autonomous systems, connectivity and artificial intelligence
- First deal to be a strategic investment in Ionic Materials, a US company developing cobalt-free solid-state battery materials
In its first year, the fund expects to invest up to $200 million 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, Alliance Ventures is set to become the largest corporate venture capital fund in the automotive industry over the period of Alliance 2022, the strategic midterm plan launched last year by Renault-Nissan-Mitsubishi.
Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi, said: "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. This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance."
The new fund is unique because it offers potential partners access to the global scale and scope of Renault-Nissan-Mitsubishi, which sold more than 10 million vehicles in 2017 through 10 separate brands with a presence in all major automotive markets.
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 strategic 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 a strategic investment in Ionic Materials, a promising US-based company which is 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 that enables improved performance and cost effectiveness of high-energy density batteries for automotive and multiple other applications.
By making such investments, Alliance Ventures will help identify and support the development of new technologies for potential use by Alliance members. Such initiatives are aligned with the objectives of Alliance 2022, which aims to strengthen cooperation and to double the annualized synergies generated by Renault, Nissan and Mitsubishi Motors to more than €10 billion by the end of 2022.
The $200 million initial venture capital investment comes in addition to more than €8.5 billion in total annual research and development investments by the Alliance members.
Alliance Ventures will be led by François Dossa, who has over 20 years of experience in investment banking, plus six years of experience within the Alliance, most recently, as chief executive officer of Nissan Brazil. The Alliance Ventures team will also draw on the expertise and 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. The Alliance will launch 12 pure electric models by the end of the plan, utilizing 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 centers 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," said Carlos Ghosn.
As part of the Alliance 2022 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.