Toyota adds another $1.5B to its bet on startups at every stage

Summary

Toyota is looking for the next new thing in mobility, climate, AI, and industrial automation. Its answer is $1.5 billion in new capital that will focus on, and invest in, the life cycle of startups — from the first seeds of an invention through its growth stage and eventually to mature companies. Toyota made two related announcements Tuesday that provide a snapshot of the company’s growing interest in the startup ecosystem. It also hints at how those startups, and their inventions, may play a part in Woven City, a prototype city located on a 175-acre site at the foot of Mount Fuji in Japan designed to incubate startups and that opened this year. The Japanese automaker said Tuesday it has created a strategic investment subsidiary called Toyota Invention Partners Co. with about $670 million in capital, while its growth-stage venture arm Woven Capital launched a second $800 million fund. The Toyota Invention Partners subsidiary will take a long-term strategy focused on Japan-based startups, eschewing the traditional fixed investment periods found in other funds. Woven Capital general partner George Kellerman described Toyota Invention Partners Co. as a bookend of sorts to the company’s other investment organizations. “One way to think about them (Toyota Invention Partners) is they’re bookending what Toyota Ventures and Woven Capital are doing,” Kellerman said in a phone interview. “They’re doing the really early stage on one end, but then they’re maybe doing these longer-term project finance, asset management type of infrastructure investments, that might be a 30-, 40-, 50-year type of investment.” Toyota Invention Partners is at the “zero to one” stage, Toyota Ventures covers early-stage, and Woven Capital handles growth stage, he explained. But Toyota Invention Partners may also stick with a startup throughout all of these stages, and if it really scales, it’ll go to the balance sheet of Toyota, Kellerman added. Kellerman said the two announcements reflect Toyota’s i...