Transportation is a huge category. Just some of the players include automakers and motorcycle manufacturers and trucking firms and logistics companies and dealership groups and repair shop chains and truck rental companies and car leasing companies and telematics companies and energy companies with big networks of gasoline stations around the world.
Given the dramatic changes underway in the way that people travel, you can imagine these industries are acutely interested in knowing what technologies are on the horizon so they can adapt and adjust their strategies.
Enter Autotech Ventures, a three-year-old, Bay Area-based venture fund that’s focused on ground transportation startups and which is promising its limited partners — most of them transportation companies — introductions to the latest and greatest startups.
It’s also offering to make key connections for the startups that make room for it at the table.
The firm’s vertical approach is reminiscent of Fifth Wall Ventures, a real-estate focused fund that recently raised its debut fund from a long line of heavyweights in the real-estate world who also want access to the tech that might impact their industry.
Autotech’s strategy is seemingly working already. The firm, which is today announcing the close of its debut fund with $120 million in capital commitments, has already funded six companies, including the growing rideshare giant Lyft.
Lyft fit perfectly into the criteria of Autotech, which looks to back either very early-stage companies where its introductions can make a meaningful impact, or relatively mature deals, where it can “make money off little risk in a relatively short amount of time,” says co-founder Alexei Andreev, a physicist turned longtime investor. He founded Autotech with Quin Garcia, a self-described “car guy” whose past roles have included heading up automotive alliances on behalf of the now defunct electric vehicle network startup Better Place.
At the same time, Autotech made sense for Lyft, too, explains Andreev, who says Autotech joined the company’s December 2015 Series F round, buying primary shares.
“Companies know that we leverage our LPs to help us understand pain points, then we help startups to scale up by introducing them to our LPs,” he says.
Among the other startups in Autotech’s portfolio are DeepScale, a startup developing technology that processes the information a car receives about its surroundings from sensors; Outdoorsy, which is akin to an Airbnb for recreational vehicles; Work Truck Solutions, whose software helps owners of commercial truck fleets track their vehicles; Volta Charging, an EV charging startup that gives away electricity, making money by selling advertising space on the stations; and a logistics platform company called Realign Technology.
Garcia and Andreev say they’re on the cusp on signing two more deals, too.
Altogether, they plan to invest their fund in roughly 15 to 20 startups.
Garcia says that when the duo — who met several years ago through mutual friends — first began talking with investors, they went to some more traditional sources of venture capital funding first. The reactions they heard time and again were, “Transportation, really?” says Garcia.
What a difference a couple of years make. In addition to strategic LPs, the firm says it also raised money from family offices and other wealthy individuals who, in the end, provided the firm with more capital than it was looking to raise. “An onslaught of exits and giants entering the space — Google, Amazon, Apple — it changed everything,” says Garcia. “You definitely don’t have to explain ‘why transportation?’ anymore.”