Toyota Ventures invests $300mn in emerging tech, carbon neutrality

By Ashika Rajan, Trainee Reporter
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Japanese automotive manufacturer Toyota Motor Corp’s first venture capital fund Toyota Al Ventures has dropped the “AI” and is now simply known as Toyota Ventures.

The Toyota Ventures Frontier Fund and the Toyota Ventures Climate Fund will invest an additional $300 million in emerging technologies and carbon neutrality as part of the fund’s new identity. The introduction of these two new funds, each worth $150 million, brings Toyota Ventures’ total assets under management to over $500 million.

With the new capital infusion into the Frontier Fund comes an expansion of Toyota Ventures’ core thesis, which previously concentrated on AI, autonomy, mobility, robotics, and the cloud, and now is including smart cities, digital health, fintech, and energy.

So while Toyota Ventures’ investment approach isn’t changing, it’s broadening the scope of startups it will consider investing in.

Mr. Jim Adler, Founding Managing Director of Toyota Ventures remarked that “AI is kind of shrinking as a proportion of everything. The first mission of the Frontier Fund has always been to discover what’s next for Toyota. The company pivoted to cars in the 1930s, and Toyota will grow to other businesses in the future. Startups are experiments in the marketplace, and this is a way for us to understand and get comfortable with where innovations are coming from.”

The Frontier Fund is a step outside of mobility. It not only wants to bring emerging technology to market, but it also wants to bring innovations on board, whether as a customer or through acquisition, according to Mr. Adler.

“I think the vision of the company is that machines are here to stay, they amplify the human experience, and Toyota understands how machines amplify humans really well for the benefit of society, which sounds incredibly corny, but the company really believes that,” Mr. Adler added.

Similarly, Toyota’s new Climate Fund aims to invest in startups that can assist the company to achieve its objective of carbon neutrality by 2050. According to Mr. Adler, the company has been investing in hydrogen for years, including a recent partnership with ENEOS, a Japanese fuel business, but it is open to any technology that can help it achieve carbon neutrality.

Mr. Adler remarked that “we think renewable energies will play a role. Hydrogen production, storage distribution, and utilization will play a role. We think carbon capture and storage will play a role. We’re not going to get dogmatic about hydrogen because we’ve been at it for decades and maybe things will change. Hydrogen hasn’t been crowdsourced across the startup community because there just wasn’t a market for it, but I think the market may be emerging.”

Toyota Ventures also stated that it would be growing its team and forming a new Advisor Network to help founders with everything from product development to diversity and recruitment.

Related: Germany’s ZF, Mobileye team up to develop ADAS solution for Toyota