The global transit and ground passenger transport market is expected to decline from $479.4bn in 2019 to $472.9bn in 2020 due to the economic slowdown induced by the pandemic and stay-at-home orders around the globe, according to the “Transit and ground passenger transport global market report 2020-30: Covid-19 impact and recovery” report by the consultancy Business Research Company (BRC).

The same report, however, also suggests the market is also expected to recover and grow at a CAGR of 8% from 2021, reaching $588.1bn by 2023. The report emphasises the role of “shared transportation” (the combined use of ride-hailing, bikes and buses) thanks to the cost benefits it provides to users. However, with the pandemic still very much in sight and a second wave of it sweeping through Europe, positive trends in usage rates are, at best, somewhat uncertain.

Leading up to the pandemic, much of the interest in the corporate-backed innovation scene in the transport and mobility space was concentrated in autotech – including autonomous, connected and electric vehicles – as well as ride-hailing services. Corporate venturers’ interest in connected car technologies and the hype around ride hailing had largely subsided before the pandemic and after the Uber and Lyft initial public offerings (IPOs) took place last year. Autonomous driving and electric vehicles, however, were still an attractive investment target for corporates due to their potentially profound disruptive impact. This trend appears to have continued (and not only in public markets where Tesla’s stock rose dramatically), despite the recessionary pressures from the pandemic slowdown and the inherent cyclicality of the automotive business.

According to the “Global Autonomous Car Market Report 2020”, the market for autonomous vehicles (AV) is projected to grow at a CAGR of 47% between 2019 and 2024. The report notes specifically opportunities in the “passenger cars, light commercial vehicles and electric vehicle markets”, identifying also strong drivers like supportive government initiatives, high levels of research and development investment in self-driving technology and the development of infrastructure in the form of roads or telecom technologies like 5G.

Despite the cyclical headwinds for the automotive industry, the global AV market demand, estimated to be around just 6,500 units in 2019, is forecast to grow at a CAGR of 63.5% during by 2027, according to a recent report by Precedence Research. It also highlights regional trends, noting that North America has dominated this market with significant share of global revenues. Precedence Research also predicts that Europe is likely to boast the most “lucrative growth rate for autonomous car market in the coming years”, mostly because of shifting consumer preference.

Large-scale technological disruption is likely to bring along some negatives, such as turning many existing jobs obsolete or reductions in government revenues from fines thanks to safer roads. While beneficial in the long run, this is almost certainly bound to lead to some short and medium-term socio-economic tensions.

Advances in fields such as artificial intelligence (AI), sensors and battery technologies are enabling autonomous driving technology’s technical viability and making the market prospects for it alluring. But some of the automotive sector’s incumbents may drop out of venture investing, as they face significant economic challenges.

Electric mobility also promises growth and deep disruption. According to the Global EV Outlook 2019 report, from the International Energy Agency, sales of electric vehicles reached 2.1 million globally in 2019, surpassing the previous year, which was also a record.

“Electric cars, which accounted for 2.6% of global car sales and about 1% of global car stock in 2019, registered a 40% year-on-year increase. As technological progress in the electrification of two and three-wheelers, buses and trucks advances and the market for them grows, electric vehicles are expanding significantly. Ambitious policy announcements have been critical in stimulating the electric-vehicle rollout in major vehicle markets in recent years.”

Despite the promise of a cleaner and safer future on the road, electric and autonomous mobility face stumbling blocks on their way to mass market. Many of those lie in consumer perception. According to data from the “2020 Deloitte global automotive consumer study”, while consumer interest in self-driving vehicles in the US is rising, it lags in other parts of the world: “Consumers in most global markets remain equally split regarding the perceived safety of autonomous vehicles.”

Another problem is the monetisation of autonomous and electric mobility tech, as consumers’ attitudes and intentions often differ from their actual buying behaviour. “Even as [original equipment manufacturers] continue to spend billions on research and development in advanced vehicle features, questions remain regarding consumers’ willingness to pay for them,” summarises the report. In many of the major markets for automobiles, there is a large percentage of consumers who are unwilling to pay a premium for advanced autonomous or EV technologies – Japan (60%), Germany (58%) and the US (54%). This is in contrast to some emerging economies like India (39%) and China (37%).

As premiums are subject to consumer hesitance and, without them, the costs of developing the technologies cannot be recouped, this may threaten their economic viability. This is, after all, the reason incumbent manufacturers turned to corporate venturing and startups, aiming to source external innovation while spreading the risks.

Another challenge for incumbents is the declining number of consumers, according to the Deloitte study, who indicate that they would most trust traditional automakers to bring fully autonomous technology to the market – in the US only 31% of consumers said they would in 2020 (versus 47% in 2018 and 2017). In Germany the figure is 35% (from 48% in 2018) and Japan, with 65% of consumers, from 76% two years ago. However, it is not clear whether this shift in consumer sentiment is permanent, so it is uncertain if the vehicles of the future will be produced by the automotive brands consumers are already familiar with or by emerging ones.

But demand for cars in general is dwindling. According to Fitch Ratings, global passenger car sales had declined to 80.6 million new units in 2018, down from 81.8 million in 2017. This was the first annual drop since 2009. Fitch also forecast a drop to 77.5 million units in 2019. According to a “Global Passenger Cars” by ReportLinker, the market for passenger cars was estimated at 74.5 million units in 2020 amid the pandemic. However, the report projects a CAGR of 2.8% and more than 90 million units by 2027.

A major area of disruption in mobility has been ride hailing – which has seen significant amounts of capital invested and a lot of attention from venture capitalists. The new business model in this space has contributed to reducing CO2 emissions and traffic congestions in urban settings but has also disrupted incumbent ride service providers, such as taxis, which has come with regulatory and legal challenges. There have also been concerns about the profitability of this business model, given the level of competition. According to data from web service Statista, total global revenue in the ride-hailing and taxi businesses is expected to reach $30.84bn by the end of this year and its growth rate in the coming years is forecast to slow down at CAGR of 18.8% by 2025, resulting in a market volume of $73.12bn, with user penetration to stay practically flat around 28.2% by 2025 versus 28.1% in 2020.

The sector in charts

For the period between November 2019 and October 2020, we reported 151 venturing rounds involving corporate investors from the transport and mobility sector. Many of them (48) took place in the US, while 23 were hosted in Japan and 13 in China.

On a calendar basis, total capital raised in corporate-backed rounds rose from $7.6bn in 2018 to $9.67bn in 2019, representing an 27% increase. The deal count, increased only slightly to 162, up from the 160 rounds reported in 2018. These figures dropped to $82bn and 127 in 2020. The 10 largest investments by corporate venturers from the transport sector were concentrated in the transport and mobility space.

Overall, corporate investments in emerging transport-focused enterprises went up from 189 rounds in 2018 to 209 by the end of 2019, suggesting a 11% increase. The estimated total dollars in those rounds, however, declined by 25%, from $25.46bn in 2018 to $18.9bn in 2019. By the end of October 2020, GCV had already tracked 149 rounds, worth an estimated total of $13.65bn – a drop clearly illustrating the impact of the pandemic-induced downturn.

The leading corporate investors from the transport sector in terms of largest number of automotive manufacturers Toyota, BMW and Porsche. The list of transport corporates committing capital in the largest rounds was headed by vehicle retailer AutoNation, automotive component manufacturer Magna and car maker SAIC Motors.

The most active corporate venture investors in the emerging transport businesses were telecoms and internet conglomerate SoftBank, Toyota and energy company Shell.

Deals

Corporates from the transport sector invested in large multi-million-dollar rounds, raised by enterprises from the same sector as well as from other sectors like energy and services. Three of the top 10 deals were above the $1bn mark.

US-based autonomous driving technology Waymo, a spinoff from internet conglomerate Alphabet, received $750m in extension equity financing, taking its round to $3bn. The round was backed by Magna International, AutoNation and its parent company Alphabet.

Waymo had already raised an initial $2.25bn tranche, featuring the three corporate backers as well as venture firm Andreessen Horowitz. The first close was co-led by Silver Lake, Canada Pension Plan Investment Board and Mubadala Investment Company, the Abu Dhabi sovereign wealth fund.

Founded in 2009 as part of Alphabet (then Google) and spun off in 2016, Waymo develops a unified AV which aims to combine internally developed technology in areas like cameras and lidar sensors as well as versions of traditional automotive systems such as brakes and steering.

WM Motor, a China-based electric carmaker backed by corporates Baidu, China Minmetals and Tencent, raised RMB10bn ($1.47bn) in a series D round co-led by SAIC Motor. An unnamed state-owned investment company co-led the round.

Shanghai Automotive Industry, the parent company of SAIC Motor, had reportedly invested $73.1m. WM Motor sells smart electric vehicles with features such as autonomous driving and connected electronics systems. It also markets a mobile app called GetnGo to pay for vehicle charging.

The series D financing will go towards research and development, marketing, sales and branding activities.

US-based electric truck developer Rivian completed a $1.3bn financing round that included automotive manufacturer Ford Motor Company and e-commerce, cloud computing and home device group Amazon. Funds and accounts advised by asset management firm T Rowe Price led the round, which also featured funds managed by BlackRock.

Founded in 2009, Rivian is developing an all-electric sports utility vehicle and pick-up truck. It will produce the vehicles at a custom manufacturing plant in Illinois. Amazon is collaborating with the company on the development of a plug-in electric delivery van that will use the latter’s technology. It has placed an order for 100,000 vans.

Sweden-based advanced battery developer Northvolt has secured $600m in a funding round co-led by automotive manufacturer Volkswagen, investment bank Goldman Sachs’ Merchant Banking Division and investment management firm Baillie Gifford.

Commercial vehicle producer Scania also took part in the round, as did Baron Capital, Bridford Investments, Norrsken VC, PCS Holding and Imas Foundation, the sister entity of Ingkea Foundation, the owner of home furniture chain Ikea’s retail outlets.

Founded in 2016 as SGF Energy, Northvolt has created lithium-ion batteries specifically for the automotive and industrial sectors, as well as grid-scale energy storage. It will use the funding to expand its production and recycling capabilities and to drive research and development activities. The company plans to reach 150GWh of manufacturing output in Europe by 2030. It expects its recycling facility to be the largest in Europe for recycling metals including lithium, cobalt, nickel and manganese with a stated goal of 50% of raw materials in its batteries coming from recycled units.

Toyota led a $590m series C round for US-based airborne taxi developer Joby Aviation with an investment of $394m. The round also featured Toyota’s strategic investment vehicle, Toyota AI Ventures, as well as Intel Capital and JetBlue Technology Ventures, investing on behalf of semiconductor and data technology producer Intel and airline operator JetBlue.

Asset manager Sparx Group, investment firm Capricorn Investment Group, VC firm AME Cloud Ventures, investment management firm Baillie Gifford and family office Global Oryx filled out the round’s participants. Joby is working on a five-seat vertical take-off and landing vehicle that will be able to carry passengers short distances in urban areas. It will be electric-powered and is expected to be able to travel some 240 kilometres on a single charge.

Toyota invested $400m in US-based autonomous driving software developer Pony.ai as part of a $462m round that valued it at slightly more than $3bn. The company did not reveal the other participants in the round, which comes in the wake of approximately $464m in earlier funding.

Pony.ai has developed a software platform which is intended to form
the basis for an autonomous taxi s
ystem and has been testing it through a pilot scheme in the Chinese city of Guangzhou since late 2018. It began piloting a robotaxi service in the US in November 2019.

Toyota formed a strategic partnership with Pony.ai in August 2019, with the two agreeing to test versions of the carmaker’s Lexus sport utility vehicles fitted with Pony.ai’s driving system on public streets in Beijing and Shanghai. The investment heralded a strengthening of the relationship between the companies, which will seek to jointly develop driverless car technology and urban mobility services.

Singapore-based logistics service provider Ninja Van has collected $279m in series D funding from a consortium led by logistics service provider GeoPost, which also featured ride hailing service Grab, mapping software producer Carmenta and telecoms firm Intouch Holding, among other investors. The round had an initial target size of $200m and valued the company at approximately $750m.

Ninja Van runs a last-mile logistics network for online merchants and small businesses across Singapore, Malaysia, Indonesia, Thailand, Vietnam and the Philippines. The company is offering contactless deliveries during the pandemic. The series D capital will enable Ninja Van to expand its existing business-to-consumer pickups and deliveries and double down on its business-to-business offering.

Vroom, a US-based second-hand automotive marketplace backed by AutoNation, closed a $254m series H round led by investment advisory firm Durable Capital Partners. L Catterton, a private equity affiliate of luxury consumer goods conglomerate LVMH, also took part in the round, as did funds and accounts advised by T Rowe Price Associates, and undisclosed other investors.

Founded in 2013, Vroom has built a data-driven, end-to-end online platform that facilitates all aspects of selling, buying, insuring and financing reconditioned vehicles. Sellers benefit from real-time appraisals and are offered market-based pricing. Should they go forward with a sale they can receive payment within minutes, and Vroom offers a complementary pickup and delivery service for cars. The company then went public in an IPO.

Automotive manufacturer Volkswagen invested up to $200m in US-based solid-state battery developer and existing portfolio company QuantumScape. The 2018 investment was provided in connection with a partnership agreement that will involve the companies working together on the industrial-level manufacturing of solid-state batteries for Volkswagen vehicles, as the company intends to establish a pilot facility soon.

QuantumScape is developing solid-state batteries that would utilise solid electrodes and a solid electrolyte, in theory offering greater energy density than the lithium-ion batteries generally used EVs. The company was spun out of Stanford University in 2010 and began collaborating with Volkswagen two years later, before the carmaker invested $100m in QuantumScape in mid-2018. The company went public in a $3.3bn IPO, in September 2020.

US-based urban mobility service Lime collected $170m in funding led by ride sharing company Uber, with participation from conglomerate Alphabet’s early-stage investment unit GV. Bain Capital Ventures also took part in the round, as did a range of unnamed new and existing backers. Lime’s valuation had reportedly plummeted from $2.4bn to $510m.

The transaction involved Uber offloading its micromobility service, Jump, to Lime. Customers will be able to unlock bikes using both companies’ apps.

Founded in 2017, Lime originally operated a bicycle-based offering but eventually shifted its focus on electric scooters that users can rent. In addition to the financing, Lime promoted global head of operations and strategy Wayne Ting to chief executive, replacing Brad Bao who will remain chairman of the board.

There were other interesting deals in emerging transport-focused businesses that received financial backing from corporate investors from the same and other sectors.

US-based electric truck developer Rivian completed a $2.5bn financing round that included e-commerce, cloud services and consumer device group Amazon.

The round was led by funds and accounts advised by investment manager T Rowe Price and also featured financial services and investment group Fidelity Management and Research, Soros Fund Management, Coatue Management, Baron Capital Group and funds managed by BlackRock.

Rivian is working on a plug-in electric truck called the R1T and an electric sports utility vehicle known as the R1S that will both utilise a flexible skateboard chassis it has developed. CF number 3.

Singapore-headquartered on-demand ride provider Grab secured $856m in funding from IT services provider TIS Intec’s TIS subsidiary and financial services firm Mitsubishi UFJ Financial Group (MUFG). MUFG provided $706m for the company while TIS invested $150m.

The Information reported at the time that Grab is in talks to merge with Southeast Asia’s other large ride hailing service, Gojek, in a deal that would value the joint company at $23bn.

Grab runs an on-demand transport service spanning 339 cities across eight Southeast Asian countries, offering food and package delivery, as well as payment services, lending, wealth management and insurance through the Grab Financial Group subsidiary it launched in 2018.

China-based ride hailing service Didi Chuxing spun off an autonomous driving technology developer with more than $500m from a funding round led by SoftBank’s second Vision Fund. Didi began testing autonomous driving software in 2016 and channelled it into a separate entity in September 2019.

The funding will be used to expand research and development spending, conduct more tests and form more partnerships in the automotive industry as it looks to bring the introduction of the technology within China nearer.

China-based smart EV developer Xiaopeng Motors completed a $400m series C round that featured consumer electronics producer Xiaomi, which made the investment as part of a strategic partnership. The corporate will offer its expertise and insights into consumer behaviour, technology and market trends to drive Xiaopeng’s value. The round also included chairman and chief executive He Xiaopeng, as well as unnamed new and existing strategic and institutional investors, and private equity firms.

Founded in 2014 and also known as Xpeng, Xiaopeng is working on connected EVs that tap into artificial intelligence (AI) technology to offer features such as autonomous driving. The company’s first production vehicle, the G3 SUV, was launched in December 2018 and Xiaopeng reached a milestone of 10,000 vehicles in 2019.

OLX, the classifieds-focused division of consumer internet company Prosus, invested $400m in Germany-based second-hand car marketplace operator Frontier Car Group (FCG).

The deal reportedly included a pending secondary investment along with direct equity purchased at a $700m post-money valuation. Prosus is a public-listed offshoot of media and e-commerce group Naspers.

Founded in 2016, FCG runs an e-commerce marketplace where drivers, dealers and fleet operators can buy and sell cars. The business is currently active in eight countries and also offers automotive services such as investor listings and insurance. The company primarily targets developing economies where consumers are less likely to shell out for new vehicles.

Exits

Corporate venturers from the transport sector completed 19 exits between November 2019 and October 2020 – 13 acquisitions, five IPOs and one stake sale. The total estimated exited capital in those transactions was $3.4bn.

On a calendar year-on-year basis, the number of exits in 2019 (13) nearly doubled the figure from the previous year (7). More notably, the total estimated capital in those exits nearly tripled from $5.19bn to $15.01bn, reflecting some large IPOs and acquisitions in ride hailing. In 2020, the positive trend gathered even more momentum and the number had reached 18 by the end of October, though the dollar figure dropped back significantly to just north of $5bn.

Xpeng, the China-based EV manufacturer backed by corporates Alibaba, UCar, Xiaomi, Duowan and Foxconn, went public in an IPO sized at approximately $1.5bn. The IPO consists of 99.7 million American Depositary Shares (ADSs), each equating to two common shares, issued on the New York Stock Exchange priced at $15 each. The company had originally planned to issue 85 million ADSs priced between $11 and $13. The IPO price gave it a market capitalisation of about $21.3bn.

E-commerce firm Alibaba had expressed interest in buying $200m of shares in the offering and consumer electronics producer Xiaomi $50m, while Coatue Management and Qatar Investment Authority were considering $100m and $50m respectively. None confirmed the purchases. Xpeng produces smart EVs that use its autonomous driving technology and in-car operating system.

App delivery services provider F5 Networks agreed to acquire US-based anti-fraud technology developer Shape Security in a $1bn deal that gave exits to corporates Alphabet, enterprise technology producer Hewlett Packard Enterprise (HPE), JetBlue and telecoms firm SingTel. Shape’s software utilises artificial intelligence (AI), machine learning and analytics helps protect businesses from online attacks and fraud instituted through bots capable of bypassing conventional barriers.

UK-based satellite internet services provider OneWeb was bought by one of its existing shareholders, conglomerate Bharti Enterprises, and the UK government with a bid of more than $1bn. The deal was subject to regulatory approvals, including by the US Bankruptcy Court, after the company sought bankruptcy protection.

The buyers will collaborate with OneWeb on resuming the launch schedule in the meantime. Bharti Enterprises’ UK subsidiary, Bharti Global, and the British government, represented by the Secretary of State for Business, Energy and Industrial Strategy – currently Alok Sharma – each put in $500m. Founded in 2012 as WorldVu, OneWeb is building a 650-satellite constellation to deliver internet access to customers in rural and remote areas. It is registered in the UK but its manufacturing facilities are located in the US and it has launched 74 satellites.

Israel-based urban mobility app developer Moovit was acquired by its existing shareholder, semiconductor producer Intel, for a total consideration of $900m. Intel paid $840m, net of the equity gain of its corporate venturing unit Intel Capital.

Founded in 2012, Moovit has built a real-time transit data app for users that pulls in public traffic data and user-generated updates to calculate the most efficient routes. It also offers third-party business access for clients such as municipalities or ride sharing providers such as Uber. The service currently covers 3,100 cities in 102 countries, where it has attracted more than 800 million users – a sevenfold increase over two years.

Intel will integrate Moovit’s enterprise platform into its autonomous driving technology subsidiary Mobileye, turning it into a full-fledged mobility provider with offerings such as robotaxi services. It will keep the consumer app’s existing branding.

China-based EV battery manufacturer Farasis Energy floated on the Shanghai Stock Exchange’s Star Market in a RMB3.4bn ($486m) IPO, providing an exit for carmaker Daimler. The company issued just over 214 million shares priced at RMB15.90 each, and its shares closed at RMB27.96 on their first day of trading.

Farasis produces lithium-ion batteries for the transport sector, and maintains research and development centres in the US, Germany and its home country. The proceeds from the offering will be used to expand the company’s manufacturing capacity. Farasis generated about $350m in revenue in 2019 resulting in a net profit of approximately $18.7m.

Vroom, the US-based automotive e-commerce platform that counts AutoNation as an investor, went public in a $468m IPO on the Nasdaq Global Select Market. The company increased the number of shares in the offering from 18.8 million to 21.25 million, and priced them at $22 each, above the $18 to $20 range it set, itself an extension of the $15 to $17 range on which it had originally decided. The offering valued it at more than $2.5bn. Vroom’s online platform allows users to buy reconditioned vehicles from sellers including dealers, car rental services and auctions.

Fleet management equipment producer Omnitracs agreed to acquire SmartDrive, a US-based telematics system provider that counts automotive component maker Wabco and tyre manufacturer Michelin among its investors.

Although neither company officially disclosed the sale price, the transaction was reported to be $450m.

The acquisition will allow Omnitracs to provide an end-to-end system that uses artificial intelligence and machine learning, and which covers multiple parts of the transport system from freight trucking to oil and gas delivery. SmartDrive is the developer of a video-based telematics system that captures data covering factors such as fuel capacity, engine health and distance between vehicles, using cameras mounted inside and outside the vehicle, to help improve safety and efficiency.

China-based manufacturing technology producer Shanghai SK Automation Technology went public in a RMB733m ($105m) IPO, providing an exit for SAIC Motor. The company floated on Shanghai Stock Exchange’s Star Market, issuing approximately 18.9 million shares priced at RMB38.77 each. Dongxing Securities was lead underwriter.

SK Automation has developed an intelligent manufacturing technology for production of cars and other vehicles in addition to automotive components. SAIC is among its customers, as are peers FAW and Geely. The company made a net profit of about $10m in 2019 from roughly $72m in revenue, according to the IPO prospectus.

Insurance technology provider Fineos agreed to acquire US-based employee benefits software producer Limelight Health in a $75m deal that will allow several corporate investors to exit.

Automotive component manufacturer Wanxiang and financial services firm Wells Fargo along with insurance firms Massachusetts Mutual and Axa, Principal Life, Aflac and Transamerica all exited.

Limelight’s cloud-based platform automates quoting, rating and underwriting for insurers offering employee benefits to streamline operations and improve accuracy. Its software will remain available as an individual product but its features will also be integrated into Fineos’ AdminSuite offering.

Global Corporate Venturing also reported several exits from emerging transport-related enterprises that involved corporate investors from other sectors.

Li Auto, a China-based EV producer, went public and provided exits to corporate backers including mobile services portal Meituan Dianping, steel producer Shougang, digital media company Bytedance, department store chain InTime, insurance firms Taiping and Ping An, and pump and gardening equipment maker Leo Group. Li Auto priced its shares at $11.50 in a $1.1bn IPO. The company issued 95 million ADSs, representing 190 million ordinary shares. Shares opened at $15.50 on the first day of trading and reached a high of $17.50, before closing at $16.46. Founded as Chehejia, Li Auto produces smart sports utility EVs.

Automotive re-marketing technology provider KAR Auction Services agreed to buy BacklotCars, the operator of an online automotive reselling platform, in a $425m deal that will enable social media company Renren to exit. The acquisition is intended to strengthen KAR’s online auction platform, TradeRev.

BacklotCars co-founders Justin Davis, Ryan Davis, Josh Parsons and Fabricio Solanes will carry on running the company’s service from its headquarters in Missouri. Founded in 2015, BacklotCars is the owner of an online dealer-to-dealer marketplace for second-hand vehicles, allowing companies such as rental services and dealers to buy and sell cars without having to travel. Inspections are carried out by trained mechanics it employs.

Qingdao Victall Railway, a China-based railroad equipment manufacturer backed by insurance provider Hua Insurance, raised $172m on the Shanghai Stock Exchange’s main board. The company issued approximately 75.6 million shares priced at RMB16.14 ($2.30). Founded in 2007, Victall produces a full range of compartment interiors and exteriors for trains, trams and subways. The company operates through six subsidiaries and four joint ventures in China, plus three subsidiaries in Germany, the US and Canada.

Automotive e-commerce platform CarDekho has paid an undisclosed amount to acquire counterpart Carmudi Philippines, allowing investors including retail group Tengelmann to exit. Spun off from Germany-headquartered Carmudi, Carmudi Philippines runs an online marketplace where buyers can access new and used cars, motorcycles, minivans and pickup trucks. The platform also offers automotive insurance and financing bought on the site, and car-based media.

CarDekho is headquartered in India but is active in Indonesia through a subsidiary called Oto and the deal will allow it it strengthen its presence in Southeast Asia.

IoT hardware producer Xirgo Technologies acquired the technology and assets of Owlcam, a US-based dashcam developer backed by insurance provider CSAA, for an undisclosed amount. Owlcam has developed AI-powered driver and road monitoring technology that relies on a dual-facing dashboard camera. The device is always turned on and connects to a mobile app via 4G to store and review footage.

Automotive sensor producer LeddarTech acquired Israel-based autonomous vehicle technology developer Vayavision for an undisclosed sum, enabling electronics group LG to exit. Founded in 2016, Vayavision provides sensor fusion and perception technology for use in advanced driver assistance systems. It will operate as a subsidiary of LeddarTech post-acquisition.

Funds

For the period between November 2019 and October 2020, corporate venturers and funds investing in the transport and mobility sector secured over $3.39bn in capital via 20 funding initiatives, which included 12 VC funds, four newly launched CVC subsidiaries, three accelerators and one incubator.

B Capital Group, the US-based venture capital firm affiliated with consulting firm Boston Consulting Group (BCG), closed its second fund at $820m.

Founded in 2014, B Capital targets growth-stage deals and connects its companies to corporates which can help them scale, through a network provided by BCG.

The firm invests between $10m and $60m a round, at series B to D stage, and its areas of interest include transport and logistics, enterprise software and financial, healthcare and consumer technology. The firm said the close brought its assets under management to $1.44bn.It closed an oversubscribed first fund at $360m in early 2018.

Aerospace technology manufacturers Airbus, Safran, Thales and Dassault Aviation contributed to the €630m ($739m) initial close of France-based VC fund Ace Aero Partenaires.

The amount surpassed the vehicle’s original $590m ceiling and is expected to increase to a $1.2bn final close.

Dassault Aviation contributed $15.3m to the fund’s latest close, investing alongside the French government, unnamed contractors and fund manager Tikehau Capital. Ace Aero Partenaires will invest in civil aviation technology developers and midcap enterprises badly hit by the economic crisis resulting from the covid-19 pandemic.

Rabo Frontier Ventures, the corporate venture capital (CVC) arm of financial services firm Rabobank, invested in a $500m fund closed by UK-based VC firm Northzone. The vehicle’s other limited partners include unnamed contributors to the firm’s earlier funds and new investors.

Northzone has now raised €1.5bn ($1.7bn) across nine funds since it was founded in 1996. Fund IX is primarily concentrating on series A and B rounds but will also take part in a limited number of seed deals, targeting consumer and business-facing startups in areas like mobility, financial services, healthcare, education and construction.

UK-based oil and gas company BP revealed it intends to provide $70m for India and UK-focused cleantech investment vehicle Green Growth Equity Fund (GGEF). GGEF was formed to invest in India-based technology developers operating in fields such as electric mobility, renewable energy, energy efficiency, energy storage and resource conservation. It has a target size of $700m and BP’s investment is set to close later.

The government of India’s National Investment and Infrastructure Fund (NIIF) and the UK Department for International Development anchored the vehicle, each making a £120m ($170m) commitment.

The fund is managed by Eversource Capital, an India-based joint venture created by BP’s solar subsidiary, Lightsource BP, and private equity and real estate investment firm Everstone Capital. BP’s decision to invest in GGEF followed a commitment by the corporate to become a net-zero carbon emissions business by 2050, partially by investing more in companies outside its traditional oil and gas focus.

Fosun RZ Capital, the VC affiliate of diversified China-based conglomerate Fosun, raised RMB1.3bn ($186m) for the first close of its latest fund. The vehicle, described by DealStreetAsia as a “sci-tech innovation fund”, has a RMB2bn target for its close and has secured undisclosed companies and government-led funds as limited partners.

Founded in 2013, Fosun RZ maintains offices in the US, India, Israel and Singapore as well as in its home country and has more than $1.4bn of funds under management. The firm invests from seed to late stage, in sectors including automotive technology, mobile internet, culture and entertainment, financial, education and retail in addition to cutting edge technologies like AI or big data.

UVC Partners, the Germany-based VC firm affiliated with Technical University of Munich (TUM), unveiled its €150m ($178m) third fund backed by LPs including specialty chemicals producer Lanxess. The co-founders of mobility services provider Flixbus also invested in the fund, as did undisclosed institutional investors, family offices, corporates and family businesses.

UVC Partners maintains a close relationship with UnternehmerTUM, the centre for innovation and business creation of TUM. They share leadership in Helmut Schönenberger, who is the chief executive of UnternehmerTUM and a managing partner of UVC Partners. The third fund will continue focusing on European seed and series A-stage startups in the mobility, industrial technology and business-to-business software sectors. It will initially invest roughly between $590,000 and $4.7m, up to $17.8m in total per portfolio company.

Japan-headquartered electronics producer Panasonic launched the $150m second fund for Conductive Ventures, the US-based growth equity firm it sponsors. Conductive Ventures launched its first vehicle in April 2018 with $100m in capital provided by Panasonic as its sole LP.

The firm said its portfolio includes semiconductor provider Ambiq Micro, electric bus manufacturer Proterra, marketing software producer Sprinklr and additive manufacturing technology provider Desktop Metal, which is pursuing a $2.5bn reverse merger.

The fund will invest in expansion-stage technology developers in areas such as autonomous vehicles, artificial intelligence, digital health, AI, commerce and financial technology plus the future of work.

Volvo Group Venture Capital, the corporate venturing subsidiary of automotive vehicle manufacturer Volvo, provided an undisclosed amount of capital for ground mobility-focused VC firm Autotech Ventures.

Founded in 2015, Autotech Ventures backs startups in areas related to ground transportation, such as autonomous vehicles, connectivity and online retail. The firm currently has more than $200m under its management. This latest vehicle followed a fund sized at more than $120m that was launched in mid-2017 with commitments from vehicle component providers BorgWarner, Denso and Mahle, car safety equipment producer Autoliv and electronics parts supplier Murata Manufacturing. Another automotive parts manufacturer, Stoneridge, disclosed a $10m commitment to the firm in December 2018, and Shell is also an LP.

US-based tyre manufacturer Goodyear Tire and Rubber Company launched a $100m CVC vehicle known as Goodyear Ventures at the Consumer Electronics Show.

Goodyear operates innovation centres in Ohio and Luxembourg but has not been active in corporate venturing. The new fund will concentrate on automotive technologies such as autonomous and electric vehicle development, urban aircraft, connected mobility, new tire materials, fleet management systems and innovative public transport.

BRI Ventures, the VC arm of Bank Rakyat Indonesia (BRI), formed a fund called Sembrani Nusantara
which has a Rp 300bn ($21.2m) target for its close.

The unit was launched by BRI in July 2019 with $100m of capital and it has begun investing significantly, co-leading the $23.5m first tranche of online lender Investree’s series C round in April and backing cross-border payment platform Nium’s series D round.

Sembrani Nusantara will invest in domestic startups at seed and series A stage and its areas of interest include transport, retail, education, health and agriculture as well as fisheries.

University

By the end of 2019, we had registered 21 rounds raised by university spinouts developing transport-related technologies, a slight increase on the 19 recorded in the previous year. The level of estimated total capital deployed in 2019 stood at $814m, down from $1.28bn in 2018. By mid-November 2020, we had tracked only 14 rounds, worth an estimated $516m, which suggests that valuations of such enterprises emerging from academia and interest in them may have been put under pressure during the economic downturn.

Lilium, a Germany-based electric aerial vehicle developer spun out of TUM, raised more than $240m in a funding round led by internet group Tencent. Investment manager Bailie Gifford later added $35m to the round, taking it to a total of $275m. The round reportedly valued Lilium at $750m to $1bn. In the first tranche, Tencent was joined by other existing backers including VC firm Atomico, investment firm Freigeist Capital and asset management group LGT.

Founded in 2015, Lilium is working on a five-seater vertical take-off and landing vehicle called the Lilium Jet which is intended for urban mobility. This latest funding will support further development of the jet along with readying the company’s completed manufacturing facility to begin formal production, with the goal of a 2025 launch.

ClearMotion, a US-based autonomous driving system spinout from Massachusetts Institute of Technology, secured $115m in a series D round led by investment manager Franklin Templeton Investments. The round featured automotive component manufacturer Bridgestone, software producer Microsoft and mobile chipmaker Qualcomm. Special interest group AARP’s Innovation Fund, Eileses Capital, World Innovation Lab and NewView Capital also contributed as well as clients advised by JP Morgan Asset Management.

Founded in 2009, ClearMotion has created what it calls a proactive ride system, a form of road-sensing technology that combines software and hardware to help driverless vehicles navigate rough roads by using sensors to help mitigate for bumps and uneven surfaces in real time.

Seegrid, a US-based autonomous industrial vehicle provider spun out of Carnegie Mellon University (CMU), raised $27m to close a $52m funding round led by VC firm G2VP. G2VP provided $25m for the round in March and was joined by unnamed technology and robotics investors for the extension.

Founded in 2003, Seegrid has developed autonomous tow tractors and pallet trucks for use in manufacturing, warehousing and logistics. It also provides fleet management software. The technology uses stereo cameras, algorithms and machine learning to continuously generate a 3D model of a vehicle’s surroundings and navigate dynamic environments. It is based on research by co-founder and chief scientist Hans Moravec at CMU’s Robotics Institute.

People

Jon Lauckner, president of GM Ventures, the corporate venturing arm of US-based carmaker General Motors, retired in July. Formed in 2010, GM Ventures targets developers of automotive technologies with the ability to enhance General Motors’ operations, products and manufacturing capabilities. GM hired Lauckner in 1987 and he moved across a series of marketing and product planning roles in the US, Brazil and Germany. He joined GM Ventures in mid-2010, shortly after the unit’s inception. Lauckner was appointed chief technical officer and vice-president of research and development for General Motors in 2012 to manage its open innovation efforts. He has featured in Global Corporate Venturing’s Powerlist seven times, ranking 24th in 2019.

Matthew Tsien replaced Lauckner as executive vice-president and CTO and will conduct research and development and venture investments on behalf of GM Ventures. Tsien has been at General Motors since 1995 and was appointed president of General Motors’ GM China division in 2014 to lead the company’s electrification and connectivity strategies in the country.

Juliet Zhu, a Singapore-based director at Fosun RZ Capital, a corporate venture capital (CVC) vehicle for diversified conglomerate Fosun, joined Malaysia-headquartered secondhand vehicle marketplace Carsome as chief financial officer. Zhu was hired by the CVC in early 2018 as a principal concentrating on e-commerce, financial technology, logistics and mobility deals. She became director of Southeast Asia a year later and shifted her focus to automotive, social media and new retail startups. Zhu will lead Carsome’s growth strategy, identifying new business opportunities and engaging with the tech ecosystem on behalf of the company, building partnerships and conducting mergers and acquisitions deals in addition to helping it raise equity and debt funding, according to a statement cited by Tech In Asia.

Saijou Hiroshi joined Toyota as vice-president of business development and strategy at its Research Institute – Advanced Development (TRI-AD) division. Saijou had been chief executive and then chairman of motorised vehicle manufacturer Yamaha’s corporate venturing unit, Yamaha Motor Ventures & Laboratory Silicon Valley, from 2015. Saijou had built up a strong team at Yamaha, including the hiring of Nolan Paul to develop an agricultural technology investment strategy, before handing over the CEO role to George Kellerman at the end of 2018. Toyota maintains a separate corporate venturing unit, Toyota AI Ventures, which is run by Jim Adler, but its TRI-AD division under James Kuffner is focused more on mobility.

Henry Chung, vice-president of CVC in California for electronics manufacturer LG Electronics, has moved to head carmaker Hyundai’s Cradle Silicon Valley unit. The role will also involve Chung taking a senior vice-president position. He spent 10 years at LG Electronics and led teams responsible for VC activities in North America and engaging in open innovation activities with venture-backed startups, top universities, accelerators and national laboratories. LG Electronics hired Ray Schuder as managing director of CVC in 2019, to join Chung and Robert Cha, while Kim Dong-Su joined as CEO of LG Technology Ventures, a $400m corporate venturing vehicle set up by the company the previous year. Before his time at LG Electronics, Chung had spent four years as a director of SVB Capital’s direct investment team.

Martin Witt left management consulting firm Accenture’s strategic consulting arm, Accenture Strategy, to head Sweden-based commercial vehicle manufacturer Volvo’s corporate venturing unit, Volvo Group Venture Capital (VGVC). Accenture hired Witt in 2006 as a senior manager before promoting him to director a decade later. He became management director in 2018 to head Accenture Strategy, focusing on automotive strategy in the Nordics region. Witt’s vice-president role at VGVC will entail leading investments in innovative developers of technology and services that have a strategic fit with Volvo. He will report to Anna Westerberg, senior vice-president of Volvo’s data analytics arm, Connected Solutions. Founded in 1997 as Volvo Technology Transfer, VGVC conducts VC and growth equity deals concentrating on areas including autonomous vehicles, connected services and electromobility. The unit is geography-agnostic but generally invests in Europe and North America.

Jim Aota was promoted to CEO and managing director of Yamaha Motor Ventures and Laboratory Silicon Valley (YMVSV), a US-based corporate venturing subsidiary of Japan-listed motorised vehicle manufacturer Yamaha Motor. Aota moved from the company’s headquarters in Iwata, Japan, where he had led its corporate planning division. He was hired from diversified trading group Mitsui in 2017. Aota replaces George Kellerman, who has been hired as head of investments and acquisitions for Toyota Research Institute – Advanced Development.

Amit Sridharan, director of CVC in the US for diversified India-based conglomerate Mahindra Group, has left to set up seed-stage VC firm First Rays Venture Partners. First Rays will invest in business-to-business enterprise technology developers in areas such as AI, cloud-edge-data orchestration and automation. Its initial portfolio consists of Kleeen Software, Blitzz.io and Enya.ai. Sridharan said: “I do not have CVC backers yet, but it is something I will look into for fund II. I plan to work with CVCs in deals. Mahindra will be doing the management of the existing portfolio through the team in India as of now.” At Mahindra since September 2018, Sridharan, a GCV Rising Stars 2019 award winner backed Avaamo and Cloudleaf. He had previously primarily worked for 14 years at India-based peer Tata Group as head of strategy, new business and early-stage acquisitions.

Sector specialist: Suzanna Chiu, head, Amadeus Ventures

Suzanna Chiu heads up Amadeus Ventures, the corporate venturing unit of Spain-based travel software and technology services provider Amadeus IT Group.

Chiu started as senior manager of strategic planning at Amadeus in 2012 and was appointed to head of ventures in 2014.

In the past year, she has sharpened Amadeus Ventures’ investment focus into the end-to-end traveller journey and how the unit can address that theme from different business units’ perspectives.

“On the investment side, we made four investments in 2019 that addresses various parts of end traveller journey – based in Israel, the US and France, working on topics like data monetisation, airline yield management, corporate travel and VAT refund,” she said.

“We have exited our very first investment with positive results,” added Chiu, referring to travel price-tracking software developer Yapta, which was bought by business expenditure management platform Coupa Software in January 2020.

She also enabled a two-tiered governance structure and process improvement agreed with senior sponsors to increase deal execution agility.

Sector specialists: Bonny Simi, president, and Raj Singh, head of investing, JetBlue Technology Ventures

JetBlue Technology Ventures (JTV), the corporate venture capital (CVC) and innovation arm of US-based airline operator JetBlue Airways, is led by president Bonny Simi and head of investing Raj Singh.

Singh said: “A top highlight from [2019] was our first exit when Shape Security was acquired by F5 Networks. I am proud of our team’s growing recognition in the travel investing and CVC ecosystems.

“We have also been able to leverage our connections and experience to provide many startup solutions to JetBlue Airways as well as our corporate partners Air New Zealand and Vantage Airport Group – in 2019, we began our 19th proof of concept to date with startups.”

In addition to Shape Security, Simi added that Joby Aviation also hit unicorn status. “Our impact on and relevance to our parent company JetBlue Airways and its second subsidiary JetBlue Travel Products only continues to grow as well,” she said.

“Different JetBlue teams come to us first for new ideas and innovative solutions – we have run five innovation sprints in the last year alone. We have huge support from JetBlue during this difficult time where our industry has been dramatically impacted. It is a testament to our value to them as a CVC.”

Batteries

Clean energy communications and consulting firm, Mercom Capital Group, issued a report in October on venture funding for battery storage companies. The third quarter (Q3) was up 78%, with $661m in seven deals, compared with $372m in eight deals in the April to end-June period.

Outside QuantumScape’s $200m round by VW, the increase in funding was largely due to Sweden-based Northvolt’s $600m round (backed by Volkswagen as well as truck maker Scania and wind turbine maker Vestas).

The funding was provided by 28 corporate and independent venture investors across five categories: lithium-based batteries, sodium-based batteries, metal-hydrogen batteries, energy storage systems and thermal energy storage. Other larger deals last year included Taiwan-based solid-state lithium ceramic battery maker ProLogium Technology’s $100m in April (backed by automotive manufacturer FAW Group), $71m for power management software provider Demand Power Group (backed by Star

America Capital Advisors on behalf of unnamed construction companies) in March and Highview Power’s $46m from Sumitomo Heavy Industries to develop its cryogenic energy storage system.

Announced debt and public market financing for battery storage technology companies came to $2.1bn in nine deals in Q3 2020 as special purpose acquisition companies (SPACs) took off, compared with seven deals bringing in $560m in the first nine months of 2019, according to Mercom.

The final quarter saw more dealmaking, beyond QuantumScape’s flotation via a SPAC, while NextEra Energy, which briefly overtook Exxon as the US’s largest energy producer by market capitalisation, acquired eIQ Mobility from Schneider Electric’s SE Ventures.

While this is effectively just a rounding error compared with the more than $140bn invested into ridesharing and food-delivery businesses since 2009, according to PitchBook, this is still good news for battery startups if the funding taps are turning back on.

America Capital Advisors on behalf of unnamed construction companies) in March and Highview Power’s $46m from Sumitomo Heavy Industries to develop its cryogenic energy storage system.

Vehicle marketplaces

The $3 trillion ground transportation sector has felt the earth move, thanks to developments in connected, autonomous and electrified vehicles and related mobility services. But while incumbents have been shaken, entrepreneurs have seized the day.

Tesla as an electric vehicle maker is worth at $600bn as much as the next eight largest traditional car companies combined, according to the Financial Times, which says it still might be undervalued if it reaches its lofty goal of selling 20 million cars a year.

But secondhand cars will still be popular, regardless of the model, so selling or leasing them will remain attractive to consumers and those creating the market.

Cazoo, a UK-based online market for secondhand cars, has acquired local subscription car rental service Drover from its corporate venturing backers, BP Ventures and Channel 4 Ventures, for an undisclosed amount.

Drover raised £20m ($26m) in July to develop its online marketplace that

allows UK and France-based motorists to hire cars for a monthly fee. Contracts run from one to 24 months and include maintenance and insurance coverage. Customers can switch between vehicles as part of the agreement, which includes those from Cazoo as well as dealerships.

Drover joining forces with Cazoo makes sense beyond operational advantagaes as it faces headwinds in its expansion against well-funded European peers, Auto1 (backed by SoftBank), Frontier Car Group (backed by Prosus’ OLX subsidiary) and Switzerland-based conglomerate Emil Frey as well as traditional rental companies, such as Sixt, and car manufacturers, including Volvo.

Volvo has been one of the more thoughtful carmakers in innovation venturing as its limited partnership commitments include Autotech Ventures, another backer of Drover, plus Frontier Car Group and direct CVC dealmaking.

So while the transport dealmakers have struggled in many areas, such as car-sharing, bright spots do remain in the sector.

Ride-hailing and car sharing

There has been a steep decline in corporate interest in car-sharing or similar sub-sectors this past year, according to GCV Analytics. This is perhaps little surprise given covid-19 has prevented shared spaces or made many people uncomfortable in them.

But out of the ashes of the tenfold drop in deal values as of December 9, 2020 compared with 2017’s high came some interesting deals, and there may be more.

VC firm Engine’s first deal from its $230m second fund is a statement of a kind – it has led the $5m round for Routing Company, a US-based public transit management software provider that is being used in Scotland.

Public transport is a $74bn business in the US alone and as car use – and congestion – has risen in cities while people have been unwilling to use it, authorities are looking at all ways to harness technology.

The covid-19 crisis has taken its toll on the incumbent car companies that had been using corporate venturing to push more broadly into urban mobility. Daimler, BMW and Alliance Ventures (a $1bn corporate venturing partnership between Renault, Nissan and Mitsubishi) have all seen upheaval in their teams.

Daimler span off its innovation unit in December, while Greg Smithies and Christian Noske have recently left BMW iVentures and Alliance Ventures, respectively, for Fifth Wall and Target Global, which are both more independent firms.

As one mobility corporate venturer said: “There is a general problem in the industry. This is a crisis moment. Covid is an excuse for falling revenues.

“There is an underlying problem for [original equipment manufacturers] and so they are going back to their core of building cars rather than moving into mobility, which is seen as a distraction by the new CEOs.

“Venture is in the middle as they are attached to mobility business units but the people making decisions are not experienced in venture so they are prioritising cash. Those, such as Daimler and BMW with large mobility assets, could sell all or part of them while others have dipped a toe [in] only.

“Probably only Toyota is the exception as it has the cash and the right CEO.”

And Toyota is increasing its focus on corporate venturing with its new $800m Woven fund. The timing is right to do so.

Aerospace and flying cars

It is a classic of adventure books that if you want to hide go up a tree, as most people’s eyes are fixed in front of them. In transport, the equivalent is targeting the airspace above the city.

Blade, a US-based short-distance aviation company best known for helicopter rides from the airports to the city in New York City, agreed in December to go public via an $850m reverse merger with a special purpose acquisition company affiliated with KSL Capital Partners.

Blade was backed by aircraft maker Airbus in March 2018 but is reaping potential longer-term trends as, according to Morgan Stanley Equity Research, urban air mobility is expected to be a $125bn market by 2025.

Airbus has been working on a zero-emission concept aircraft, Zeroe, based on hydrogen, and CityAirbus, an all-electric, four-seat, multicopter vehicle, that might enable Blade to move into electric vertical take-off and landing by 2025.

It is up against ZeroAvia, among others. The startup was highlighted in our previous Global Energy Council report for receiving UK grant funding to fly a small aircraft using hydrogen power and later raised $21.4m from corporate backers Amazon through its Climate Pledge Fund, aircraft maker Boeing’s Horizons Ventures unit and oil major Shell’s CVC unit, as well asVCfirms Breakthrough Energy Ventures, Ecosystem Integrity Fund and Summa Equity.

Eric Toone, the executive managing director and science lead at Breakthrough Energy Ventures, the VC firm backed by Amazon’s founder, Jeff Bezos, and Microsoft’s co-founder, Bill Gates, told TechCrunch: “I am a big believer in hydrogen from the perspective that if I have enough zero-carbon hydrogen, and it is cheap enough, then I can do anything.”

As ZeroAvia founder Val Miftakhov said: “Batteries are not energy-dense enough for the amount of energy you need for the aircraft. Aviation is the most energy intensive form of transit… and you canno’t stop in the middle.”

But one firm is lifting its sights higher –Orbit Fab, a US-based startup preparing to establish gas stations in space, has raised $6m in its seed round with Germany-based insurer Munich Re’s CVC unit extending the round.

All these deals in new areas help explain why the “other transport” sub-sector has seen a spike in deal values in 2020.

Annual survey results

Every year, Global Corporate Venturing asks the industry questions about investment priorities, strategies and fit with the corporate. We have broken out the Transport sector answers and compared them with the overall answers.

Sector report: Transport