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Toyota’s VC Arm Pours $300 Million In Funds Targeting AI And Green Tech Startups

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Japanese automaker Toyota’s Silicon Valley venture capital arm, Toyota Ventures, unveiled Wednesday two $150 million funds for early-stage startups in fields such as AI, robotics and renewable energy.

Targeting deep tech and climate tech, the Toyota Ventures Frontier Fund II and Toyota Ventures Climate Fund II build on Toyota’s existing Frontier and Climate funds launched in 2021. The newly committed capital brings Los Altos, California-based Toyota Ventures’ assets under management to over $800 million.

“At a time when some investors have scaled back, we’re scaling up by doubling down on our initial Frontier and Climate Funds,” said Jim Adler, founder and general partner of Toyota Ventures, in a statement. “With seismic breakthroughs in generative AI, e-fuels, space commercialization, carbon capture, and synthetic biology, it’s a crucial time to be investing for Toyota.”

To date, Toyota Ventures claims its portfolio spans 75 companies globally. Under the maiden Frontier Fund are New Zealand-based biosensor maker Scentian Bio and NYSE-listed aerial vehicle maker Joby Aviation, which in 2022 collaborated with South Korean billionaire Chey Tae-won’s conglomerate SK.

About a quarter of Toyota Ventures’ portfolio companies fall under the maiden Climate Fund, which focuses on “smart, scalable solutions” combatting climate change. These companies include Australian foodtech startup Vow, featured in the Forbes Asia 100 to Watch list in 2022, which produces lab-grown meat from animal cells. In 2022, Vow raised $49.2 million in a Series A funding round led by Australian venture capital firm Blackbird and Prosperity7, a fund of oil giant Aramco’s venture arm.

Founded in 2017, Toyota Ventures began as Toyota AI Ventures, a subsidiary of the Toyota Research Institute. It rebranded to its current name in 2021, when Toyota committed an additional $300 million to the arm. In addition to Toyota Ventures, Toyota operates Woven Capital, a startup investment arm targeting “growth-stage” ventures in automation and clean energy. Woven’s six portfolio companies include AI and machine learning startup Nuro, which has raised over $2 billion from investors including SoftBank, Baillie Gifford, Fidelity, Greylock and Tiger Global.

Toyota saw a record year for sales as it doubled down on hybrid vehicles and expanded its model lineup. In 2023, Toyota, including its Lexus, Daihatsu and Hino brands, sold a total of 11.2 million vehicles worldwide. That year, over the period of April to December, operating income doubled year-over-year to 4.2 trillion yen ($27.7 billion).

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