Volvo Launches a Venture Capital Fund to Invest in Startups
Volvo joins the ranks of other automotive manufacturers with VC funds but with parent Geely's access to China, it gives them an edge.
I spend a lot of my free time at car dealerships because, well, I have a problem. A couple of weeks ago I went to a Volvo dealership to check out their flagship S90 sedan and it was epic; it was also nearly $80,000. But as I hear more about the brand's Vision 2020 plan to eliminate fatalities and serious injuries in their cars, the more I like what I’m hearing. Volvo has always been about safety but now they’re actually starting to sprinkle in some style.
In addition to style, the company is getting some investing savvy. According to Wired, It just announced a venture capital fund to invest in new startups. It’s certainly not the first time we’ve heard of an automotive company getting into the VC business. Porsche has its digital hubs around the world, Daimler has been buying up tech startups for years, but this is a major move for the Swedish company.
Starting with an undisclosed amount of money, the Volvo Cars Tech Fund will invest in startups to help keep Volvo at the cutting edge of technology in the automotive industry. It’s a strategy that we’ve seen not only from car companies but the biotech and drug industry as well. Rather than keep all the expensive research and development in-house, you allow the market to present you with promising opportunities. Once an attractive one pops up, you stroke the check and buy the business.
One strategic advantage Volvo has over other car companies is that it’s owned by China’s Geely. That means that startups which chose to partner up or sell out to Volvo will gain access to the world’s largest car market.
The CEO of the new fund, Zaki Fashihuddin, has piloted similar projects for American Express, PayPal, and McDonald’s. Speaking on the new fund, Fashihuddin said, “We seek to invest in companies that can provide us with strategic access to new technologies, capabilities, and talent. By supporting promising young firms at the forefront of technological development and providing them with both capital and strategic value, we aim to strengthen our leading role in the industry’s technological transformation.”
If this doesn’t get you excited about the future at Volvo, just wait until the Polestar 1 finally drops in 2019.
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