US auto giant General Motors Corporation has forayed into venture capital play with the launch of a $100-million VC fund, General Motors Ventures, LLC, which will invest in innovative technologies in the automotive and transportation sector.
GM has also named Jon J Lauckner, who was the vice president of global products planning at GM, as the president of the fund. The company is currently exploring equity investments in a number of auto related technologies and business models, said a company statement.
Lauckner will take charge of the fund on July 1. He will report to Stephen J Girsky, vice chairman, Corporate Strategy and New Business Development, GM.
Though the company did not divulge the fund allocations in terms of geography, the development is likely to put the spotlight on the Indian automotive technology space, which did not see much deal activity in recent times.
GM already has a pan-India presence. It also formed an equal joint venture called General Motors SAIC Investment Ltd (GMSIL) with SAIC in December last year to tap the potential market in India’s utility vehicles space.
“We are constantly looking for ways to deliver the best technology for our customers. Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available,” Girsky said in the statement.
In 2009, there were only two private equity investments in technology and auto components manufacturing space in India, compared to 10 investments in the previous year, according to the VCCEdge deal data. Meanwhile, the deal activity seems to be picking up again as two such investments happened during the first five months this year, with the latest being IFC’s investment of an undisclosed sum in Coimbatore-based Craftsman Automation Pvt Ltd.
There has been a significant increase in corporates entering the PE/VC play globally to invest in companies related to their products and service offerings. Intel Corporation, the world’s largest semiconductor chip maker, is one of the early movers in the play with its venture capital fund Intel Capital, which makes equity investments in innovative technology start-ups and companies worldwide. In India, Reliance Venture Asset Management Ltd (RVAM), the corporate venture capital arm of the Reliance ADAG group, is one such fund making venture investments in start-ups and growth stage companies.
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