Peloton Technology, Inc. – a case study in multi-industry automotive co-investment

This is an excerpt from ‘Venturing and the Future of Mobility and Automotive Technology’, a new report from Global Corporate Venturing and LEIF, which is sponsored by Denso International America, Castrol innoVentures and Magna, all of which are shareholders in Peloton. The report will be released in November ahead of a conference of the same title in London on December 1st, where Magna and Castrol innoVentures will among the speakers. For more information on the report and/or the conference(s), please contact tom.whitehouse@london-eif.com. We’re particularly keen to hear from new mobility and auto-tech businesses that would like to present at the conference and appear in the report.

Peloton Technology is a California-based semi-autonomous vehicle technology business. It enables heavy vehicles to link together in a tightly-knit peloton (hence the name) to reduce fuel costs and increase safety. It does through radar-based braking systems and vehicle-to-vehicle communications.

Peloton’s roster of shareholders is a who’s who of corporate VC leaders in the automotive sector. All are active. Denso International America and Intel Capital lead the $17m April 2015 a round and were joined by Nokia Growth Partners, Lockheed Martin, Magna International, Castrol innoVentures, Volvo Group Venture Capital and UPS Strategic Enterprise Fund. Angel and financial VCs also invested.

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Intel’s and Nokia’s investments are symptomatic of the software industry’s growing interest in automotive. Castrol’s and Volvo’s investment could be seen as industry incumbents venturing to stay ahead of the game and maintain leadership positions. Denso and Magna are both tier 1 suppliers to whom the current OEMs and newcomers will look to assemble and deliver the pieces of the autonomous vehicle jigsaw. Peloton looks like a very interesting piece of the jigsaw. UPS has a big stake in the future of industrial transportation and logistics.

Amidst all the hoo-ha in the passenger vehicle market, with the big brands (and newbies) outbidding each other with promises to introduce the first fully autonomous passenger vehicle, Peloton may provide two useful lessons: there are investment opportunities in technologies for the semi-autonomous vehicle, and it’s industrial transportation, rather than passenger transportation, which will lead the way towards more autonomy and eventually full autonomy.

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