Hold the wheel and drive

VCJ_Rss_Logo 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…

Lyft Raises $530 Million in Fight With Uber

Ridesharing startup Lyft has new capital and a new ally in its war against Uber. Japanese e-commerce giant Rakuten led a $530 million round of funding for Lyft in a deal that closed this week.

The financing, which also included new investor Fortress Investment Group, values three-year-old Lyft at more than $2.5 billion. The capital gives Lyft more ammunition in its uphill battle against larger foe Uber, which has raised over $5 billion in funding and is available in more than four times as many cities. The two companies have undercut one another on prices, poached drivers and sworn investors to secrecy in their efforts to expand services they believe will play a big role in the future of urban transportation.

The future of mobility

As Detroit rebounds from bankruptcy, the local community is once again looking to transportation technology for economic development. With the number of automotive corporations in the region, Detroit and its surrounding communities are well-suited to supporting transportation startups.

Autotech Ventures is excited to start working with Michigan corporations, startups, and universities to create a support ecosystem for transportation startups in the Detroit region. Bill Ford, the executive chairman and former CEO of Ford, took the stage at the TED Conference in 2011, and gave a speech that did not make waves at the time, but was surprisingly prescient in retrospect. As if he was channeling Uber’s Travis Kalanick, the great-grandson of Henry Ford discussed how the future of transportation is really about the beginning of the end of traditional car ownership.

“When you factor in population growth, it’s clear that the mobility model that we have today simply will not work tomorrow,” Ford said. “Frankly, four billion clean cars on the road are still four billion cars, and a traffic jam with no emissions is still a traffic jam.”