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GM Launches Venture Capital Arm, Starting With $100M

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Rev your engines, auto startups — there’s a new VC in town that wants to back your tech innovation and it has some serious connections in the auto industry. General Motors (s GM) announced this morning that it has created a new subsidiary to identify, develop and invest in innovative technologies in the transportation sector. Dubbed General Motors Ventures, LLC, this VC arm of the Detroit automaker is starting out with an investment of $100 million, and GM says it is now in the process of “exploring equity investments in a number of auto-related technologies and business models.”

Leading GM Ventures will be Jon Lauckner, a top executive in the development of the plug-in Chevy Volt, starting July 1. Lauckner (one of our Top 15 Connected Car Influencers) will report to GM vice chairman and VP of Corporate Strategy and New Business Development Stephen Girsky, a former auto industry analyst at Morgan Stanley and longtime thorn in the side of car companies.

Girsky joined GM’s board last summer, and CEO Ed Whitacre tapped him as a special adviser in December. “We are constantly looking for ways to deliver the best technology for our customers,” Girsky said in a statement today. “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.”

General Motors has invested in greentech startups in the past. Back in early 2008, the automaker joined Khosla Ventures, Advanced Technology Ventures and Great Point Ventures in backing biofuel developer Coskata. GM and Coskata said at the time that they would partner on ethanol research and development, and work to build the infrastructure needed to commercialize the biofuel. GM said it would utilize the fuel from the demonstration facility, and would also provide some of its carbon-based waste (think old tires) as a feedstock for Coskata. Also in 2008 GM partnered with ethanol startup Mascoma and took an equity stake in the company.

That kind of relationship with a major automaker could be a huge boon for some of the green auto innovators that have sprouted up in recent years. Many of them have described goals of licensing or selling their tech and products to major automakers, and some have scored investment or limited supply deals. For example, Daimler (s DAI) invested $50 million in Tesla Motors last year, and signed up to deploy Tesla’s battery packs at demonstration scale in its electric Smart Fortwo. Ener1 (s HEV) subsidiary EnerDel has a limited supply agreement with Volvo for the initial run of its electric C30. Chrysler and Fiat have agreed to use batteries from A123 Systems (s AONE) in the electric version of the Fiat 500 minicar that’s set for a U.S. launch in 2012.

Additionally, GM has partnered (without making an investment) with lithium-ion battery developer Sakti3 of Ann Arbor, Mich., with the automaker offering “vehicle capability and pack capability,” and Sakti3 “bringing cell expertise.” In a separate deal, Sakti3 CEO Ann Marie Sastry is also helping to retrain 50 GM engineers at the University of Michigan.

Despite a few startups making headway with legacy auto manufacturers, most automakers have been slow moving when it comes to betting on young ventures for energy storage and MPG-boosting tech. With GM’s move to dedicate a new subsidiary entirely to seeking out, developing and commercializing innovative business models and technologies (at a time when it’s looking to boost its green image and is working on an $8 million expansion of its battery systems lab), at least one automaker is gearing up for a pretty sizable bet.

Who might be in the running to benefit from GM’s $100 million fund, and potentially gain access to its testing facilities? Check out our lists of 7 Startups Building Green Car Tech for a Pre-Electric World, and 20 Battery Startups Hitting the Road With Lithium-ion.

Images courtesy of General Motors

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9 Responses to “GM Launches Venture Capital Arm, Starting With $100M”

  1. Kudos to GM for understanding innovation within the automotive space is likely to happen outside the realm of the automaker, or even the industry. I guess in some ways you could say this is the government indirectly diverting bailout funds to entrepreneurs (something that has been on many VC agendas).

    Jim Kovarik
    President, C2G, LLC