Article by: John Lippert, Gabrielle Coppola and Dana Hull
Toyota Motor Corp. wants to smooth the oft-bumpy ride for startup companies and maybe find a few gems to acquire by forming a new venture capital business.
Armed with an initial $100 million to invest, Toyota AI Ventures will seek companies that are taking on challenging research also being pursued by Toyota Research Institute, the carmaker's artificial intelligence and robotics R&D unit. The first three companies to receive financing are a maker of cameras that monitor drivers and roads, a creator of autonomous car-mapping algorithms and a developer of robotic companions for the elderly.
In starting the venture fund, Toyota is following through on President Akio Toyoda's call "to be attacking and defending at the same time" in an age where automakers known for metal-bending now contend with the likes of Google and Tesla Inc. in programming cars capable of driving themselves. Toyoda told shareholders last month that the almost 80-year-old company would consider options including partnerships, mergers and acquisitions to improve its competitiveness.
"Can TRI and Toyota do this alone? The answer is no," Gill Pratt, the chief executive officer of the automaker's research institute, said Tuesday at an automated vehicles conference in San Francisco. "The number of startups in this field is incredible. No matter how hard I try to hire people, we are still missing out on a lot of the innovation."
TRI is interested in startups working on power efficiency, sensor technology, machine learning field and simulation, Pratt said.
The first three investments placed by Toyota AI Ventures include Intuition Robotics, an Israeli developer of AI in machines that serve as the eyes and ears of aging people otherwise isolated in their homes. With help from Toyota, Intuition Robotics plans to commercialize its home-assistant robot ElliQ, Chief Executive Officer Dor Skuler said in a phone interview.
Robots, Dashcams
ElliQ tries to anticipate the needs of elderly people by simulating how their brains work, Skuler said. One early advantage of the relationship with Toyota has been working with the company on manufacturing, he said.
"We had issues with our motors to get them to be quiet and elegant in their movements," Skuler said. "Toyota helped us a lot."
Bloomberg Beta, the venture capital arm of Bloomberg LP, also invested in the Series A financing round Intuition Robotics completed in May.
Toyota provided seed financing in March to London-based SlamCore, which enables cars to build maps with the vehicle positioned in them in real time. Before that, the automaker contributed funding to Palo Alto, California-based Nauto, which makes an advanced dashcam for vehicle fleet managers to help prevent crashes.
Jim Adler, vice president of data and business development at TRI and managing director of the new venture arm, said he's looking to invest in companies that Toyota could buy later. The typical "exit" for a startup is to be acquired by a larger company or go public.
"We're looking for winners," Adler told reporters Tuesday. "John Chambers at Cisco had a good philosophy of R&D: we invest in a bunch of companies and buy the winners."
In addition to investments, Toyota AI Ventures will offer selected startups mentoring and on-site support at the Silicon Valley headquarters of Toyota Research Institute. Toyota formed the research institute with an initial $1 billion investment in 2015 and hired Pratt, the former top robotics engineer for the U.S. military's Defense Advanced Research Projects Agency, to run it.