The automotive alliance of Renault-Nissan-Mitsubishi has announced the launch of Alliance Ventures, a new corporate venture capital fund that plans to invest up to $1 billion over the next five years, according to a press release.
Alliance Ventures is a corporate effort to support open innovation in automotive technology, with a focus on new mobility such as electric vehicles, autonomous systems, and artificial intelligence. The fund expects to invest up to $200 million in start-ups to bring new technologies and businesses to the alliance while ensuring a fair financial return. Alliance Ventures will make strategic investments through all start-up stages.
The fund offers potential partners access to the global scale of Renault-Nissan-Mitsubishi, which sold more than 10 million vehicles in 2017, according to a press release. The OEM’s financial arm, RCI Bank and Services, held a balance sheet of $46.6 billion in 2016, compared with $29 billion seven years ago.
The financial arm has been positioning itself as a mobility provider having recently relaunched the mobility platform Karhoo, which allows consumers across Europe to book vehicles for temporary rental or for ridesharing. A number of other auto finance startup have also benefitted from venture capital in recent years from lenders such as Exeter Finance Corp. and Flagship Credit Acceptance that are backed by private equity, to finance startups such as MUSA Auto Finance that offers used leasing deals.
“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,” said Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi. “This new fund reflects the collaborative spirit and entrepreneurial mindset at the heart of the Alliance.”
Should the fund make further annual investments, Alliance Ventures is set to become the largest corporate venture capital fund in the automotive industry. Francois Dossa, the former chief executive officer of Nissan Brazil, will lead Alliance Ventures. Renault (40%), Nissan (40%), and Mitsubishi Motors (20%) will jointly fund the entity.