“The mobility of the future and our industry is being defined by the increasingly rapid pace of technological change,” BMW’s head of development Klaus Froehlich said in the statement. “Anyone who wants to succeed must shape this change and have access to the best ideas.”
Traditional carmakers are turning to startups for help in developing technologies required for a future dominated by self-driving cars, ride-sharing services and electric vehicles. So far iVentures has acquired a stake in San Francisco-based RideCell, which creates car-sharing and ride-booking software, and invested in public-transit and battery-charging apps.
While BMW has been slow to roll out electric vehicles, it has gained traction with its own car-sharing brand, which operates in European cities under the DriveNow banner and in the U.S. as ReachNow. In addition to investing in startups, BMW holds a stake in real-time maps venture HERE, co-owned by rivals Daimler AG and Volkswagen AG’s Audi. BMW’s most recent models have included autonomous driving elements such as cars that respond to hand gestures and help drivers stay in lane.
BMW faces a particularly tough challenge in branching out beyond engines because it’s built its identity around driving performance and its pockets aren’t as deep as those of bigger automakers with a wider product range. Volkswagen, with more than twice the revenue of BMW, earlier this year invested $300 million in taxi ordering app Gett Inc. New entrants are adding to the challenge, with General Motors Co. putting $500 million in Lyft Inc in a bid to compete against Uber Technologies Inc., and Apple Inc. pouring $1 billion into China’s largest ride-hailing service Didi.
BMW’s venture fund, which is moving its headquarters to Silicon Valley from New York, will now be operated as a separate unit run by Ulrich Quay and Uwe Higgen, the company said. In addition to money, it will offer technical expertise to the startups it supports.
The fund plans to have outposts in Israel and Munich, and is contemplating an Asian office, as it expands its staff from the current six people to 15. The Israeli office will seek to make investments in cybersecurity and sensor technology companies, Higgen said in an interview. The fund will invest as little as $500,000 in each company.
“These days, more and more innovations come from the startup scene,” said Peter Schwarzenbauer, the BMW executive who oversees car sharing. “Venturing allows us to tap into this potential at an early stage.”