The auto sector is a tough market for corporate venture capital.
It has long product cycles that can make it difficult for investors and new entrants: if you’re a startup pitching a new product to an automaker today, you could be looking at 2031 before the automaker can include it in a vehicle. In the meantime, that means finding other ways to put dinner on the table, especially with automakers now pushing back some of their EV plans.
On the sidelines of the Collision tech conference in Toronto this week, Nicole LeBlanc told me that Toyota is looking for ways to better support innovators.
LeBlanc is a partner at Woven Capital, a corporate VC arm of the Japanese automaker. “All big companies think in years, because it takes years,” she said. “I joke [that] as venture capitalists, our goal is to be the time-space continuum and pull them all together.”
Woven, which shares a name with the futuristic smart city Toyota is building in Japan, was founded in 2021 to invest in growing later-stage companies, separate from the earlier-stage bets of Toyota Ventures. LeBlanc joined the Tokyo operation in 2022, but cut her teeth in Canada at BDC Capital and New Brunswick Innovation Foundation, and worked at Sidewalk Labs, Alphabet’s smart city division.
Automakers are juggling duelling mandates of short-term cost-cutting and investment in long-term transformations like EVs, self-driving cars and solid-state batteries. LeBlanc is looking to bring the startup community into the fold, trying to support companies ready to cross the capital-intensive chasm between pilot projects and full production.
Toyota has taken a measured approach to the EV transition.”We don’t make an investment unless there’s a business unit that wants to collaborate with that company,” said LeBlanc.
Startups working with Toyota are then assigned a project manager who ensures they’re clear on goals to stay on track, and to help navigate the massive automaker’s different units, helping connect them with different teams across the world.
“We don’t just leave a startup to their own devices,” she said.
Woven reflects the tension Toyota is navigating, trying to hit the sweet spot between short-term bets on companies that are nearing commercialization and hitting long-term goals like developing a hydrogen ecosystem. The company has put more emphasis on battery-electric alternatives like hydrogen and hybrids, and recently backed Corvus Energy, which was founded in Vancouver and combines fuel cells and battery technology for maritime vessels.
“We’ve been making fuel cells since the 90s….it’s the ecosystem around it that is needed,” said LeBlanc. “We’re not building ships or big transport trucks. It’s a partnership model that we’ve pursued.”
Some of the Canadian startups that have pitched LeBlanc for investment this week might convince her, she said. Canadian firms tend to have strong engineering talent, unique IP and are playing to locally strong industries like hydrogen or critical minerals, LeBlanc said.
“Canadian companies really punch above their weight … if they can get the right venture investors, the right group of pilot customers,that hopefully helps them scale faster.”
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