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Big auto firms' investments in start-ups jump manifold to $243 mn in 2018

Big deals included a $65-mn investment by electric scooter maker Kwang Yang Motor in Twenty Two Motors

T E Narasimhan  |  Chennai 

autonomous cars, new age cars, technology cars

Investments by big automobile firms and original equipment manufacturers (OEMs) in start-ups have increased substantially to $243 million in 2018, from $14 million a year ago. OEMs feel such investments will reduce the time it takes to launch new vehicles and help to bring new solutions for future mobility faster.

Venture Intelligence data shows that the number of deals -- OEMs' investments in start-ups -- concluded in 2018 was 11, as against three in 2017. They were mostly in the shared mobility, electric vehicle technology and space.

Big deals included a $65-million investment by electric scooter maker in Twenty Two Motors, followed by a $44-million investment by in the on-demand AC bus service provider and a $40-million fund infusion by and in self-drive car rental firm

On the sidelines of the FISITA World Automotive Congress, concluded in Chennai recently, Pawan Goenka, managing director of Mahindra and Mahindra, said, "Soon, the automotive sector will witness a technology disruption lead by start-ups. We, as firms, know which technology succeeds and which one fails; so, we won't try. But, start-ups don't have this differentiation and they will keep on trying each and every thing. At one point in time, the technology which would have been proved a failure would succeed and revolutionise the industry. This is the disruption I am talking about." He added that start-ups would create new business models, customer solutions and technology paradigms.

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invested around $14 million in self-drive car sharing company in August 2018. Puneet Anand, senior general manager and group head (marketing) at India Ltd, said that the strategic investment and partnership would enable both partners to build competency and the technology necessary for leading the market.

It would help Hyundai start operations in new environments with new customers, said Anand. Further, the customers would be able to experience Hyundai brands in a unique format, which would result in brand enhancement and enhance the usage of Hyundai cars among potential customers, he added.

With such strategic partnership investments, OEMs are looking to tap innovative future services to gain the first foothold in the market.

For start-ups, besides the money, the expertise and market penetration that OEMs bring are additional advantages. Anupam Agarwal, co-founder at Revv, in August said that with Hyundai's deep understanding of Indian consumers and their progressive stance on tech-driven mobility solutions, their partnership would bring the company closer to achieving its vision in the mobility market.

First Published: Sun, December 09 2018. 16:42 IST
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