Autotech Ventures will use its newly closed fund of $230 million to expand beyond its base of early-stage trucking startups and invest in what the company believes are the next big opportunities in automotive and mobility.
Fintech, logistics, supply chain and circular economy top the list.
The $230 million fund, its third since its launch in 2017, will be used to invest in seed through C-Series mobility-related startups, according to the company. A mix of financial and corporate LPs participated in the fund, including Allison Transmission, American Axle, Iochpe-Maxion and Shell.
“We continue to be a company focused on ground transportation and we have a very similar strategy [with this fund],” Alexey Andreev, Automotive technology companies the CEO told TechCrunch. “At a high level, it’s the same as Fund 1 and Fund 2. However, one of the fastest growing areas is SaaS-enabled fintech. Auto trading is inefficient and there are big pockets of profit to be captured.”
The firm is particularly interested in transportation-related fintech companies that are poised to grow during a recession.
“We made a prediction that sooner or later there will be a recession and identified areas that will benefit when the economy weakens,” Andreev said, noting that the latter fund invested in Yendo, a Dallas-based start-up (formerly known as Otto) that allows customers to borrow against their vehicles at the same interest rate as standard credit cards.
Autotech Ventures’ previous fintech investments include buy now pay later UK-based startup Bumper and Carpay, a buy here pay here loan service SaaS platform for car dealers.
Andreev said the company is also investigating investment opportunities in the circular economy, a nascent industry focused on finding ways to reuse materials and products. Circular economy startups have attracted an increasing amount of attention and investment as automakers move away from gasoline-powered vehicles toward electric vehicles.
Autotech Ventures is also cautiously dabbling in generative AI, though Andreev was quick to point out that the company hasn’t made any investments in that area.
Autotech has more than $500 million under management and has invested in more than 40 companies.
Some of the company’s investments include computer vision startup DeepScale (which was acquired by tesla), Lyft, used car marketplace operator Frontier Car Group, Drover, Outdoorsy, Swvl, parking app SpotHero and Xnor.ai, that Apple acquired in January 2020. Five of those startups have gone public, including indie Semiconductor and Volta Charging.