Corporate venture capital at Jaguar Land Rover, with Mike Smeed

Fund Shack

Mike Smeed is managing director of InMotion Ventures, the corporate venturing arm of Jaguar Land Rover.

In this episode of the Fund Shack podcast, he speaks to Ross Butler about what the company looks for in start-up candidates and the rapidly evolving nature of corporate venture capital.

Mike the Managing Director of InMotion Ventures, the corporate venture capital (CVC) arm of Jaguar Land Rover (JLR). Mike discusses his career background, including roles at a Shanghai-based joint venture and Walgreen Boots, and delves into the unique aspects of CVC compared to traditional venture capital (VC).

Key Points:

1. Corporate Venture Capital (CVC) vs. Venture Capital (VC):

• Similarities: CVC and VC both perform due diligence, focus on valuation and metrics, and aim for strategic investments.
• Differences: Historically, CVCs were viewed skeptically due to fears of corporate overreach. Modern CVCs have adopted VC professionalism and often invest off their parent companies’ balance sheets, with some even taking external capital.

1. Role of InMotion Ventures:

• Strategic Focus: InMotion Ventures aims to accelerate innovation and support JLR’s strategic transformation, especially in areas like climate, industrial, and enterprise technologies.
• Investment Approach: Unlike many CVCs, InMotion invests in early-stage startups (seed to Series A) to add significant value to both JLR and the startups.

1. CVC Evolution:

• Professionalization: Many CVCs now operate with the same rigor as traditional VCs, including thorough background checks and strategic valuations.
• Integration with Parent Companies: CVC leaders often come from within the parent company, blending corporate insight with investment acumen.

1. Strategic Mandate:

• Innovation and Collaboration: InMotion Ventures aims to help JLR achieve carbon neutrality by 2039 and focuses on technologies critical to this transformation.
• Partnerships: The firm prefers co-investing and does not lead funding rounds, maintaining about a 5% equity stake to ensure active involvement without overwhelming influence.

1. Investment Justifications:

• Ecosystem Access: Being an active investor attracts other investors and startups, facilitating ecosystem engagement.
• Innovation and Speed: Investing in startups accelerates innovation and market readiness, providing JLR with early access to cutting-edge technologies.
• Capital Efficiency: Strategic investments leverage larger rounds by financial VCs, maximizing impact with relatively small contributions.

1. Success Stories and Examples:

• Investments: Mike discusses successful investments, such as in companies developing head-up displays and augmented reality technologies.
• Collaboration with Competitors: InMotion Ventures collaborates with other automotive giants like Volvo and BMW to co-invest in promising technologies.

1. Value to Startups:

• Strategic Support: Startups benefit from JLR’s extensive resources, including engineering expertise and testing facilities.
• Mutual Benefits: While InMotion seeks financial returns, the primary goal is strategic alignment with JLR’s broader goals.

Conclusion:

The interview highlights the evolving landscape of CVC, emphasizing strategic partnerships, professional investment practices, and the mutual benefits of fostering innovation within large corporate structures. Mike underscores the importance of balancing financial returns with strategic goals to drive both corporate growth and startup success.

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