Renault-Nissan Sets Up $200 Million Fund To Tap Startups

The Renault-Nissan-Mitsubishi alliance is pooling $200 million in a new mobility tech fund, three sources said, in the latest move by major carmakers to adapt to rapid industry change by investing in startups through their own venture capital arms. The fund, due to be unveiled by Chief Executive Carlos Ghosn at the CES tech industry show in Las Vegas next Tuesday, will be 40 percent financed by Renault, 40 percent by Nissan and 20 percent by Mitsubishi.

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"It will allow us to move faster on acquisitions ahead of our competition," one of the alliance sources told Reuters.

Frederique Le Greves, a spokeswoman for the Renault-Nissan-Mitsubishi alliance, declined to comment.

The traditional auto industry model based on individual ownership is threatened by pay-per-use services such as Uber, as well as ride- and car-sharing platforms, a challenge heightened by parallel shifts towards electrified and self-driving cars.

Wary carmakers are struggling to embrace changes and technologies that some of their executives are only beginning to grasp. To accelerate the process, many are investing directly in the new services - and gaining access to intellectual property - via their own corporate venture capital (CVC) funds.

BMW has purchased stakes in a plethora of ride-sharing, smart-charging and autonomous vehicle software firms through its 500 million euro ($600 million) iVentures fund, the biggest such in-house facility belonging to a carmaker.

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Among others that have been increasingly active are General Motors' GM Ventures, with $240 million, and Peugeot-maker PSA Group's 100 million-euro investment arm.

CVC funds, a familiar feature of innovative sectors such as tech and pharmaceuticals, have become more commonplace among carmakers since the 2008-9 financial crisis. They let companies skip some of the formalities otherwise required for new investments, and pounce more swiftly on promising startups.

The Renault-Nissan-Mitsubishi venture will also obviate the current need to thrash out the ownership split for each new alliance acquisition.

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