Toyota Motor Corp. is boosting investment in startup companies to get a better handle on emerging technologies that could potentially disrupt its existing business, according to the head of Toyota's corporate venture arm.
Toyota AI Ventures said on Monday it is co-leading an $11.5-million seed investment in May Mobility, an Ann Arbor-based startup that is developing self-driving shuttles for college campuses, central business districts and similar low-speed applications. BMW i Ventures is a co-investor.
Based in Los Altos in the heart of California's Silicon Valley, Toyota AI Ventures, the automaker's corporate venture arm, is less than a year old.
With a budget of $100 million, the company now has disclosed investments in seven early-stage startups, from Boston to London to Tel Aviv. The common thread is advanced technology — notably artificial intelligence, robotics and big data — that is expected to power self-driving cars and on-demand ride sharing fleets.
"Part of our mission is to understand where innovation is happening, tap into disruption in the market and acquire firsthand knowledge of those disruptive signals," said Jim Adler, managing director of Toyota AI Ventures.
Toyota AI Ventures has invested in two robotics startups, as well as a company that specializes in mapping for self-driving cars and drones, another that uses artificial intelligence to analyze big data, and one that is developing electric air taxis. BMW, General Motors Co and Softbank are co-investors.
With rapid advances in technology and new mobility applications, "the auto industry is under siege," Adler said in an interview.
The largest automakers, including Toyota, which is developing its own self-driving technology, "could be more fragile and more at risk if we don't adapt to this changing environment," Adler said.
Compared with some of its portfolio companies, the investment in May Mobility seems more down to earth.
"We recognize that full autonomy is going to take many years," Adler said. "The road will be trailblazed by these kinds of services," he added, noting May Mobility's narrower focus on deploying self-driving electric micro-shuttles in premapped areas with fewer variables such as construction and traffic.
Edwin Olson, CEO and co-founder of May, said the company plans to launch a commercial ride-sharing service later this year.
Alphabet Inc.'s Waymo self-driving unit has said it will begin a similar service in late 2018, followed by General Motors in 2019.