US-based car maker General Motors has created a $100m corporate venturing fund to invest in the automotive and transportation sectors as it prepares for the increasing role of technology in the vehicles it manufactures. By 2015, GM said more than 40% of a vehicle’s content could be composed of electronics, controls and software technology.
Jon Lauckner, (click on his name for link to full biography) will head the division as president of General Motors Ventures, reporting to Stephen Girsky, GM vice chairman of corporate strategy and new business development. Lauckner previously helped develop the Chevy Volt, GM’s extended-range electric vehicle, after joining the company in 1979.
Girsky, who acts as a confidante of GM chief executive Ed Whitacre, said: "Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available."
The creation of General Motors Ventures follows deals, with biofuels companies such as Coskata and Mascoma, struck in 2008 alongside US-based venture capital firm Khosla Ventures as part of GM’s R&D Strategic Venturing Group, set up in Israel and California and Michigan in the US.
However, other vehicle makers have also been expanding their corporate venturing activities, with Japan-based Toyota investing $50m in pre-flotation shares of electric vehicle maker Tesla. Germany-based Daimler previously invested in Tesla.
And a source close to GM said it had discussed setting up its venturing fund last year but had put it on hold until its cash flows could be rebuilt. Last month, GM posted income of $865m in the first three months of the year with $1bn in cash, which surpassed analyst expectations 10 months after the company’s exit from bankruptcy.
Robert Ackerman, founder and managing director at US-based venture capital firm Allegis Capital, said: "The key to success for GM will be developing "insider relationships" with the venture community, developing an ability to run in sync with the start-ups who can deliver competitive advantage and staying the course for the long term."