Renault-Nissan-Mitsubishi to invest up to $1bn on automotive start-ups in five years

Renault-Nissan-Mitsubishi, the French-Japanese automaker alliance, will start a corporate venture capital fund to invest up to US$1 billion in technology start-ups over five years, it said on Wednesday.

The fund, called Alliance Ventures, expects to invest up to $200 million in its first year in start-ups working on mobility technologies such as autonomous vehicle systems, artificial intelligence, connectivity and vehicle electrification.

“This investment initiative is designed to attract the world’s most promising automotive technology start-ups to the Alliance,” said Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi.

Alliance Ventures is part of the group’s 2022 strategy to improve cooperation and double annualised cost synergies between the three companies to more than €10bn by the end of 2022.

By linking start-ups, investors and others in the venture capital ecosystem, the alliance hopes to fuel innovation in automotive technologies and support its own research and development plans.

By the end of its strategic plan, the alliance aims to launch 12 ‘pure electric’ car models, and bring to market 40 autonomous vehicles and robo-vehicle services.

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Technology start-ups are an increasingly appealing investment for global corporates and venture capitalist in the Middle East and globally.

In the region, prominent business figures such as Mohamed Alabbar, the founder of UAE-based developer Emaar Properties, have turned their attention to technology start-ups with initiatives such as the Alabbar-backed Middle East Venture Partners (MEVP)’s $250m start-up fund that launched last September.

Alliance Ventures will be led by François Dossa, former chief executive of Nissan Brazil.

The three carmarkers will jointly fund the entity, with Renault and Nissan putting down 40 per cent of capital each, and Mitsubishi Motors 20 per cent.

The first deal is a strategic equity investment in Ionic Materials, a US-based company developing cobalt-free solid-state battery materials – although the alliance did not disclose the size of the investment.

With further annual investments, Alliance Ventures aims to become the largest corporate VC fund in the automotive industry, according to the group.

“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,” Mr Ghosn said.

Renault-Nissan-Mitsubishi said it sold more than 10 million vehicles in 2017 and forecasts combined revenues of $240bn by the end of 2022.