Jan 17, 2018 Renault, Nissan, Mitsubishi, Alliance, Alliance Ventures, Venture capital, Automotive, Innovation, electric vehicles, batteries
The Renault-Nissan-Mitsubishi alliance have announced the launch of Alliance Ventures, a new corporate venture capital fund that plans to invest up to US$1 billion to support open innovation over the next five years.
In its first year, the fund expects to invest up to $200 million in start-ups and open innovation partnerships with technology entrepreneurs focused on new mobility, including vehicle electrification, autonomous systems, connectivity and artificial intelligence. With further annual investments, Alliance Ventures is expected to become the largest corporate venture capital fund in the automotive industry over the period of Alliance 2022, the strategic midterm plan launched last year by Renault-Nissan-Mitsubishi.
Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi, commented: “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. This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance.”
The fund is described as unique, thanks to the fact that it offers potential partners access to the global scale and scope of Renault-Nissan-Mitsubishi. The latter sold more than 10 million vehicles in 2017 through 10 separate brands, and with a presence in all major automotive markets.
Alliance Ventures is expected to invest in start-ups to bring new technologies and businesses to the Alliance while ensuring a fair financial return. The fund will make strategic investments at all start-up stages and will incubate both new automotive entrepreneurs and forge new partnerships. The first deal by Alliance Ventures will be a strategic investment in Ionic Materials, a promising US-based company developing solid-state cobalt-free battery materials.
The equity acquisition coincides with the execution of a joint-development agreement with the alliance for R&D cooperation. Ionic, based in Massachusetts in the U.S., is the developer of a pioneering solid polymer electrolyte that enables improved performance and cost effectiveness of high-energy density batteries for automotive and multiple other applications.
The alliance says that through such investments, it will help identify and support the development of new technologies for potential use by Alliance members. Such initiatives are aligned with the objectives of Alliance 2022, which aims to strengthen cooperation and to double the annualized synergies generated by Renault, Nissan and Mitsubishi Motors to more than €10 billion by the end of 2022.
The $200 million initial venture capital investment comes in addition to more than €8.5 billion in total annual research and development investments by the alliance members.
The alliance will launch 12 pure electric models by the end of the plan, utilising common EV platforms and components, while also bringing to market 40 vehicles with autonomous drive technology and developing robo-vehicle ride-hailing services. Renault (40%), Nissan (40%) and Mitsubishi Motors (20%) will jointly fund the entity, which will have 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.
As part of the Alliance 2022 strategic plan, Renault-Nissan-Mitsubishi is forecasting that the combined revenues of its member companies will reach $240 billion and that annual unit sales will exceed 14 million by the end of 2022.
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