BMW has a two-pronged approach to investing in growth companies in the technology sector. The car and motorbike manufacturer is concentrating on start-ups on the West Coast of the USA, and in Western Europe, with a predominance in California to date. However, subsidiary BMW i Ventures, which was launched 13 years ago, intends to focus on the Old Continent in future when it comes to new financing.

„We are targeting the European start-up scene more than before – to a certain extent we want to establish a footprint on both continents and mine for innovative diamonds in the rough in both parts of the world,“ says Marcus Behrendt in an interview with Börsen-Zeitung. He is one of the two managing directors of the company, which has 16 employees.

While the 53-year-old industrial engineer looks after the European market from Munich, his colleague Kasper Sage, in the same management position, has his office in Silicon Valley. Both are focusing on a more diversified concept: „Due to our history, we have focussed more on American start-ups in the past. Their share of our portfolio is set to decrease in the medium term. Instead, we are becoming more involved in Europe,“ says Behrendt, explaining the geographical distribution of the company's venture capital portfolio.

The BMW i Ventures portfolio comprises over 60 start-ups. The financial commitment is limited. BMW i Ventures invests up to 10 million dollars per company, with a maximum stake of 20%. In addition to standalone financing, the BMW subsidiary also cooperates with other large corporations in the mobility sector. „We also finance start-ups together with other companies and other car manufacturers,“ says Behrendt. As an example, he cites the Californian company Cellink, in which the Munich-based company invested together with Bosch Ventures. BMW i Ventures is also involved with Bosch and Toyota in the Californian software service provider Recogni. Together with Porsche Ventures and Volvo Tech Fund, BMW has a stake in the Swiss natural fibre composite specialist Bcomp.

The activities are paying off for BMW. „We are financially successful,“ says the Managing Director. He does not provide any further details on the profitability of BMW i Ventures. The venture capital specialist has so far financed its investments from two funds. The company has been active via funds since 2016/17. The first fund has a volume of 500 million euros, which is almost fully invested, though BMW i Ventures is still making some follow-on investments via this fund. The second fund, launched in 2021, has a volume of 300 million dollars. BMW i Ventures will use this for new investments.

Behrendt is open to setting up another fund. „Our recipe for success is consistent. We want to maintain our investment rhythm and the current speed. Consequently, we then have to think about whether and when we need another fund.“ The decision lies with the parent company.

Venture capital activities are essential for BMW „to gain momentum“, as the DAX member puts it in its 2023 annual report. Behrendt formulates the motives as follows: „Innovations are a decisive competitive factor for the BMW Group. That's why we scan the scene for fast-growing technology start-ups. We make a financial commitment to companies whose innovations are beyond the first step.“ The collaboration and involvement in these young companies help BMW recognise trends early and stay ahead in the event of disruptions. „This approach, recognising – potentially disruptive– technologies at an early stage, is to a certain extent a de-risking strategy for the BMW Group.“

The workload at BMW i Ventures is very high. „We look at around 1,000 companies per year. Of these, we make eight to ten investments,“ reports Behrendt.