Renault-Nissan-Mitsubishi Alliance Launches VC Fund to Invest USD 1 Billion Over Five Years

The Renault-Nissan-Mitsubishi alliance has launched a USD 1 billion venture capital fund named Alliance Ventures, which will invest up to USD 1 billion in order to support open innovation during the next five years.

Right from itsfirst year, the fund will invest upto USD200 million in start-up companies and innovation partnerships with technology entrepreneurs which will be related to new trends in mobility like autonomous systems, vehicle electrification, connectivity and artificial intelligence.

With investments being topped up every year, Alliance Ventures is likely to become the largest such corporate venture capital fund in the automotive industry and will be a key component of Alliance 2022, the strategic midterm plan which was launched last year by Renault-Nissan-Mitsubishi.

Commenting on the fund, Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi, said that the alliance’s open innovation approach will allow the it to invest and collaborate with start-up companies and technology entrepreneurs. It is a win-win deal as the partners will benefit from the global scale of the Alliance, which in 2017 sold over 10 million vehicles in 2017 through 10 separate brands and has a presence in all major automotive markets.

Alliance Ventures will focus not just on getting reasonable financial returns but will also invest in start-ups to bring new technologies and businesses to the Alliance. The fund will make strategic investments at all start-up stages and will incubate both new automotive entrepreneurs and forge new partnerships.

The first such deal by Alliance Ventures will be an investment in Ionic Materials, a company based in the US which is working on the development of solid-state cobalt-free battery materials. Ionic, has developed a pioneering solid polymer electrolyte that can boost the performance and cost effectiveness of high-energy density batteries for automotive and multiple other applications.

In this manner, Alliance Ventures will help to identify and support the development of new technologies which might potentially be used by the members of the Alliance. Such projects are meant to align closely with the goals of Alliance 2022, which seeks to strengthen cooperation and to double the annualized synergies of Mitsubishi Motors, Renault and Nissan to more over 10 billion euros by the end of 2022.

The members of the alliance have already allocated a total of over 8.5 billion euros this year for the purpose of research and development and the initial USD 200 million this year for the venture capital fund is on top of this amount.

Alliance Ventures will be helmed by François Dossa, who has over 20 years of experience in investment banking, in addition to six years of experience within the Alliance. His most recent stint was as the CEO of Nissan Brazil. The Alliance Ventures team will take advantage of the expertise and business opportunities identified by a Cross-Functional Team of experts from Renault, Nissan, and Mitsubishi.

The creation of the venture capital fund will complement the Alliance 2022 strategy to cut costs, generate incremental revenues, and make cost savings in areas that include vehicle connectivity, electrification and autonomous drive systems. By the time this plan ends, the goal is to launch 12 pure electric models, utilizing common EV platforms and components. The alliance will also bring to market 40 vehicles with autonomous drive technology and will develop robo-vehicle ride-hailing services.

Alliance Ventures will recruit experts in venture capital to identify potential partners and carry out deals and work closely with the existing research and advanced engineering teams. It will work out of bases Silicon Valley, Paris, Yokohama and Beijing, cities with close ties to the technology and research centers of the Alliance member companies, as well as to areas with strong innovation ecosystems.

All three partners will chip in with funds for the venture capital fund with Renault and Nissan contributing 40 per cent while Mitsubishi Motors contributes 20 percent. There will be a dedicated investment committee to make investment decisions and monitor their performance.

“This investment initiative is designed to attract the world’s most promising automotive-technology start-ups to the Alliance,” said Carlos Ghosn.