In a typical year, major automakers participate in several billion dollars worth of startup funding rounds. And so far, 2024 is not bucking the trend.
Per Crunchbase data, the largest global automakers 1 and their affiliated venture funds have joined in at least 52 startup funding rounds this year, collectively valued at close to $2.8 billion. By deal count, the pace of activity is similar to what we’ve seen in the previous four years.
Automakers are also leading quite a few rounds. Per Crunchbase data, they served as lead investors in at least a dozen deals this year, putting over $1.3 billion to work. However, that’s a bit slower than other recent years, as charted below.
Autonomous driving
As for investment themes, the autonomous driving sector claimed the largest slice of funding. The biggest investment came in June, when General Motors agreed to pump another $850 million into San Francisco-based Cruise, which is restarting self-driving programs in several cities.
The next-biggest was South Korea-based 42dot, which describes itself as an “AI mobility company,” with a focus on technology enabling autonomous vehicles. The company picked up $183 million in a Hyundai Motor Co.– and Kia Motors-led round in June.
These large automaker-led financings come amid a broader upsurge in funding around self-driving vehicles. It’s an area that, despite producing its share of flameouts, continues to tantalize with the vision that, some day, autonomous vehicles will safely shuttle along our streets en masse.
Autonomy was one of a few themes that captured automakers’ interest. To illustrate, below we used Crunchbase data to assemble a list of seven recipients of the largest automaker-led rounds this year.
EVs and supply chain sustainability
With electric vehicle adoption still gradually on the rise, automakers are also investing in startups offering more sustainable approaches to producing batteries and sourcing materials to make them.
On this front, Oakland, California-based Lilac Solutions, which develops ion exchange technology for lithium extraction, is one of this year’s larger fundraises. The company secured $145 million in a February round that included BMW i Ventures among its backers, and plans to extract lithium from the Great Salt Lake.
Also this year, Ineratec, a German company developing environmentally friendly liquid fuel from CO₂ and hydrogen, raised $129 million in a financing round from backers including Honda Motor.
Automakers who were particularly active
Crunchbase data shows that some automakers are much more active than others in startup dealmaking.
So far this year, Toyota Motor has been one of the standouts, participating in 10 startup financings, mostly deals by its venture arm, Toyota Ventures. Its activity skews early stage, backing rounds from seed to Series B. Most recently, Toyota Ventures participated in a $31 million Series A for e-Zinc, an energy storage technology developer.
General Motors and its VC arm, General Motors Ventures, have also been active, with eight startup investments, including Cruise. Most recently, General Motors Ventures participated in a $39 million July Series B for Addionics, a U.K. startup focused on improving battery efficiency.
BMW has also kept up the pace of dealmaking through its BMW i Ventures investment arm, with seven deals this year. Most recently, it participated in a Series A for Simr, a cloud simulation company.
Challenging times
Automakers’ startup investments this year come amid a challenging period for the industry, with higher rates pushing up purchasing costs and continued hurdles associated with the long transition to electric vehicles.
That said, staying competitive means there’s still a vested interest to take stakes in and keep up with startups technologies associated with popular themes like autonomous driving and sustainable EV production.
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Illustration: Dom Guzman
Dataset included Toyota, General Motors, Ford, Volkswagen, Mercedes Benz, Stellantis, Tesla, Honda, BMW, Hyundai and Kia, as well as venture funds affiliated with these automakers.↩
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