When that first driverless car hits the dealer showroom, the event will represent the culmination of a slow evolution, not an overnight revolution in auto transportation technologies. “Fully autonomous vehicles aren’t going to be ready for at least the next 10 years,” said Quin Garcia, managing director at Palo Alto, California based venture firm AutoTech Ventures. “It’s going to take a series of steps to get there.” But once those cars do arrive, they’ll grow into a huge market, as much as $42 billion by 2025, according to the Boston Consulting Group.
To tap that potential, Garcia expects to soon announce the close of his first fund. AutoTech Ventures is raising an initial fund of an undisclosed amount to invest in early-stage transportation-related startups. AutoTech calls itself an associate fund of Harris & Harris Group in New York, which is providing operational support to Garcia and the team, but AutoTech is raising the fund from outside LPs.
The firm will invest in up to 15 companies, with an expected average investment of $2 million. “We’re looking for technologies that can be enablers of the full autonomous vehicle in the long term but in the short term have commercialization potential,” he said. That mandate includes online platform and mobile service, such as the ride sharing apps like Uber or Lyft, as well as auto insurance startups and parking technologies. “We will invest not just the stuff that goes into the cars but anything related,” he said. He said he’s already vetted about 300 companies and has zeroed in on some targets. “In the next few years, we expect to see captured-fleet autonomous vehicles operating in constrained environments in pilot programs,” he said. “Then, between now and 2025, automation is going to become part of the driving process so the tasks that humans are bad at are slowly and surely going to become automated.”
He may be off by five years. Ford and Nissan recently predicted that they’ll start selling self-driving cars to the public in 2020 predicted that they’ll start selling self-driving cars to the public in 2020. And in early June, Google began testing two-person, third-generation all-electric cars on urban streets in Palo Alto and Mountain View, Calif., near its corporate headquarters. “The hardest challenge is inner-city driving at mid-speeds,” Garcia said. “We’ve pretty much worked out the challenges at high speed and low speeds, but succeeding at mid-range speeds is really tricky. It’s the last bastion where humans will be tasked with driving.” Garcia brings his expertise to a number of startups. He’s a director at Connected Signals, which is working on an in-car app that informs drivers when streetlights are about to change or recommend routes to catch a wave of green lights.
He’s also an advisor to Peloton Technology, a Mountain View, Calif.-based startup working on anti-collision technologies to enable long-haul trucks to form caravans to save on fuel. The company has raised more than $18 million in funding from Band of Angels, Birchmere Ventures, Intel Capital and Sand Hill Angels. And Garcia is in an observer on the board of IQ Taxi, which provides fleet management software to cab drivers. Garcia noted that the reluctance of millennials to own and drive personal autos should help accelerate development of the autonomous vehicle. The fact that millennials are driving less enables new business models, akin to Uber and Lyft. “The more millennials don’t want to drive, the more they are using such services, which pushes the trend towards self-driving cars,” he said. “This is especially true in metro areas; personal vehicle ownership is becoming more of a burden, and less important.” Tom York is a San Diego-based contributor. He can be reached at firstname.lastname@example.org.
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