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Nokia Growth Partners

After Exiting Phones, Nokia Launches $100M Fund To Drive Connected Cars

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Nokia has launched a new $100 million investment fund focused on connected cars, as the 150-year-old company seeks to pull off its latest reinvention trick. The fund will be managed by Nokia’s venture arm, Nokia Growth Partners (NGP) — and is the fourth such fund that NGP has managed on behalf of Nokia, bringing the total commitments managed by NGP to $700M.

NGP’s other funds have been centred on mobile-related investments — a business Nokia has just extricated itself from, divesting itself of its devices & services business division by selling it to Microsoft. That sale brought Nokia $7.2 billion+, a portion of which is now being retargeted by the company with the aim of building an ecosystem around its remaining business divisions.

Nokia is a far smaller company without phones — the remaining rump of the business is focused on networking, mapping/location services and leveraging its patent portfolio.

Connected cars intersects directly with that digital mapping business, Here — with Nokia licensing navigation and mapping services to (predominantly) car makers.

Nokia noted today that the new fund will aim to “identify and invest in companies whose innovations will be important for a world of connected and intelligent vehicles”, and “make investments that also support the growth of the ecosystem around HERE’s mapping and location products and services”.

So this is a clear play to expand the business opportunity for Here. In its Q1 results reported last month, the division increased its revenue 13% year-on-year, bringing in 185 million in the quarter — and pulling in non-IFRS operating profit of €10 million.

That’s still relatively small fry for the business (its Networks division brought in 216 million in profit in the same quarter) — but is evidently an area Nokia believes has opportunity for growth. (It’s not alone either.)

The more consumer pressure there is for connected cars — which Nokia is betting will be fueled by innovative new services developed by startups this new fund will aim to back — the more connected cars will hit the road, and the bigger the potential market for Here.

“Our new USD 100 million venture fund launched today further underlines our belief that the connected car is a significant growth opportunity where NGP is poised to make great investments,” said Rajeev Suri, Nokia President and CEO in a statement. “NGP has been consistently performing well bringing in both new innovation and financial return to Nokia.”

“Vehicles are becoming a new platform for technology adoption very similar to phones or tablets,” added Paul Asel, Partner at Nokia Growth Partners, in a statement. “We are excited to deepen our collaboration with HERE through the Connected Car fund to invest in companies that are driving the future of the auto ecosystem, local services and personal mobility.”

A spokeswoman for NGP told TechCrunch the fund will focus on the U.S., Europe and Asia (mainly China and India). “NGP is a global investment firm with feet on the ground in these regions and automotive tech development is happening from different angles in all these regions,” she said via email.

The fund typically invests between $5 million and $15 million depending on whether it leads the round or not.

“We looks for companies who have a shipping product who are looking to expand outside home markets,” she added.