Tom Whitehouse and Kaloyan Andonov
Has venturing in auto-tech peaked? CVCs plug into EV. Adventures in travel-tech
This is an excerpt from ‘Corporate Venturing and the Future of Mobility, Automotive and Travel’, a new report from Global Corporate Venturing and LEIF, which is sponsored by BP Ventures, Denso International America, and JetBlue Technology Ventures.
1. CVC investment in ‘pureplay’ autotech by total dollar amount rose from 2016 to 2017, but the rate of increase slowed.
See graph 1 below
- 2017 saw a 46% increase in the total amount of corporate venture capital allocated to autotech compared to 2016. However, this is less than the year-on-year increase registered between 2015 and 2016, which was 134.45%.
- This begs the question of whether we are approaching the peak of autotech venturing.
2. CVC investment in autotech by deal count is also rising.
See below graph 2
2017 saw a 63% increase in the number of autotech deals being done by CVCs, compared with a 13% increase between 2015 and 2016
EV, AV and connectivity are the fastest growing autotech sub-categories by deal count, while Lidar was flat and car insurance declined. See below graphs 3 and 4 ‘Autotech subcategories by deal count 2016’ and ‘Autotech subcategories by deal count 2017’.
CVC-backed EV deals increased by320% from 2016 to 2017 (from 5 to21)
CVC-backed AV deals increased by 60% from 2016 to 2017 (from 10 to 16)
There were 7 CVC-backed lidar deals in both 2016 and 2017
There was 1 CVC deal in automotive insurance-tech in 2017 compared to 4 in 2016
3. Oil & gas goes electric and mobile?
Oil & gas is just one of several industries staking a claim to the future of electric and autonomous travel. The European energy majors are all making investments while the US players appear to be sitting on the fence; a reflection perhaps of US abundance in oil and gas and the different regulatory and policy environments on each side of the Atlantic.
See graph 5 below
4. The taxonomy of travel venturing is set to continue growing
A wider look at the mobility arena beyond ‘pure-play’ autotech (including ride hailing and public mobility) tells a similar story, i.e. rising volumes of capital and increasing numbers of deals. Please see below graph 6 ‘Rise of corporate backed rounds in emerging transport enterprises 2011-17’.
The taxonomy of travel venturing is set to widen as the likes of JetBlue and other airlines are joined by hotels and hospitality providers to make further investments in travel-tech. An analysis by Lufthansa Innovation Hub found that travel-tech funding in the first two months of 2018 reached more than $6.5 billion across 76 deals – a pace that could bring a new record by the end of the year.