Toyota is pledging $1.5 billion in new capital, demonstrating a growing interest in the startup ecosystem. The money will be used to invest in the full life cycle of a startup, from the first seeds of an invention to its growth and eventual maturity. The Japanese automaker made two related announcements on Tuesday: it has created a strategic investment subsidiary called Toyota Invention Partners Co. with about $670 million in capital, and its growth-stage venture arm, Woven Capital, has launched a second $800 million fund. This investment strategy also hints at how these startups and their inventions may play a part in Woven City, a prototype city at the foot of Mount Fuji in Japan that is designed to incubate startups and opened this year.
A Full-Spectrum Approach to Investment
Toyota Invention Partners Co. will focus on Japan-based startups and will not adhere to the traditional fixed investment periods of other funds. Woven Capital general partner George Kellerman described the new subsidiary as a bookend to the company’s existing investment organizations. He explained that Toyota Invention Partners Co. is focused on the “zero to one” stage, while Toyota Ventures covers early-stage investments, and Woven Capital handles the growth stage. However, Toyota Invention Partners may also stick with a startup through all of these stages, and if a company truly scales, it could be moved to Toyota’s balance sheet.
Kellerman said that the two announcements reflect Toyota’s strong interest in the tech and innovation coming from startups. “The thing that really excites me is that Toyota is clearly leaning in; they’re committing over $3 billion across Toyota Invention Partners, Woven Capital’s fund one and two, and all of Toyota Ventures funds,” he said. This strategy is illustrated by another announcement on Tuesday, where Machina Labs, a Los Angeles-based advanced manufacturing startup, announced a strategic investment from Woven Capital and a pilot project with Toyota Motor North America to produce automotive body panels.
The Woven City Vision
Woven Capital, which launched in 2021 with an $800 million fund, is still focused on investing in global startups that are entering a growth stage. The firm has invested in 18 companies from the first fund, including autonomous vehicle technology startup Nuro. The new $800 million fund will target 20 to 25 new investments in Series B to late-stage companies working on advancing AI, automation, climate technology, energy, and sustainability. As part of the new fund announcement, Woven Capital has also been made a wholly owned subsidiary of Toyota.
What The Author Thinks
Toyota’s massive investment strategy is a clear signal that the company is taking a proactive approach to a rapidly changing world. By betting on startups across the entire life cycle, from early-stage invention to mature growth, Toyota is trying to ensure its future relevance in an era where technology is moving faster than ever. This strategy is not just about making money; it is about building a pipeline of new ideas and technologies that can be integrated into the company’s core business and, eventually, into its ambitious Woven City project. This is a bold move that shows Toyota is no longer just a car company, but a technology and mobility company that is serious about securing its place in the future.
Featured image credit: Erik Mclean via Pexels
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