REVVED UP: Venture Capital Investment in Auto Tech Speeds Up in Q3

November 2, 2017

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By Ray Telang

We can hardly go a week without hearing about new innovations in the automotive industry. A perfect illustration of this is the sharp rise in “Auto Tech” venture capital (VC) funding that we saw in Q3 2017.

What is Auto Tech, Really? At the core, Auto Tech is defined as new technologies that are changing traditional vehicle ownership and operation models, as well as enabling entirely new mobility concepts. Companies are seeking technologically intelligent, efficient and safe solutions that are going to help transport consumers from A to B. (Think more connected, shared and green.) They’re looking to deploy assisted driving/autonomous software; driver safety tools; driving data/connected car; fleet telematics; vehicle-to-vehicle communication; and auto cybersecurity; among other technologies.

Who is Investing in Auto Tech? These companies are backed not only by VC firms, but also traditional auto players, tech giants and scrappy startups. They’re using venture capital to ensure they’re on the right side of the creative disruption taking place within the automotive industry, because – ultimately – the costs of missing out on a revolution in transportation will be high.

Q3 Auto Tech VC, But the Numbers. For the third quarter, VC-backed Auto Tech companies raised $329M across 17 deals based on the latest PwC/CB Insights MoneyTree Report. This represents a 51% increase in funding over the previous quarter, when $218M was raised in the space. Much of this growth can be attributed to a sharp rise in mega-rounds nationally ($100M-plus), including the second largest Auto Tech deal ever at $159M.

Looking at all of 2017 (through Q3), Auto Tech VC deals have raised $908M. This is already greater than the previous full-year record (2016: $882M) and Auto Tech VC funding is on track to eclipse $1B for the first time ever later this year.


Q3 Auto Tech VC, the Geographical Breakdown. Taking a closer look at where these deals are occurring, it should come as no surprise that 11 of the 17 deals for the quarter occurred in Silicon Valley and San Francisco representing $303M. Michigan, however, came in second with four deals at $22M, with Massachusetts in a distant third with only two deals at $5M. It can be expected that we will continue to see Michigan receive a solid share of funding, given the importance of the automotive industry to the market.

While it remains unclear exactly when we will see the proliferation of these technologies, it is clear that there is a great appetite for these companies among the VC community. Check back in January to see the full-year totals for Auto Tech.

Find more information on the PwC/CB MoneyTree Report.



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