Automotive startup accelerators

The full list is available here on Google Docs.

There are thousands of startup accelerators and incubators around the globe now. A startup founder can try his/her luck applying to a wide variety of accelerators, although it is quite challenging to decide which ones to apply.

Most startup accelerators would like to accept those making any kind of software (which, as we know, is eating the world). Meanwhile, hardware startups, especially deep tech ones, often face difficulties applying as they should spend quite some time finding the right place. The strategy of spraying efforts is not the best one for a person making a product for a particular industry — say, automotive.

The automotive industry is one of the biggest in the world with about 1,5T dollars annual turnover not counting spare parts and services. It is a big player’s market: Volkswagen’s or Toyota’s revenue (> $250 billion) is close to Apple’s or Samsung’s. There are few such leviathans along with dozens of smaller ones like Tesla, which, despite being a notable newsmaker, made 50 times fewer cars than Toyota in 2018.

Most car makers are profitable, thus they can afford to spend billions on R&D annually for many years and plan to spend even more. Although the most hyped goal is a self-driving car, it is only a tip of the iceberg, which consists of services, materials, batteries, powertrains and many, many more. If your product or technology may be applied to an automotive market, you definitely should try.

The issue is if you are inventing, let’s say, a new rust stop cover technology, that leads to millions of dollars of economic effect in the future, you will not be understood in a common startup accelerator focused on software. Nothing to worry about, remember to knock on the right door — the door of an automotive startup accelerator.

What makes automotive startup programs special

Certainly, there is no exact definition of what to consider an automotive (transportation, mobility, etc) accelerator or incubator. Having the biggest self-driving car startup Cruise in its portfolio does not make YC an automotive accelerator, even though it could be the most successful among them. I suppose that big players from the industry as partners make the difference. And direct access to a big automotive player (which is an industrial or corporate partner) is the value that automotive accelerator could give as mentioned by Ted Serbinski from Techstars Mobility program.

The concept of a partnership expects that you focus not on a common pitch, but on a detailed proposition to a key partner. So you should at least briefly understand what their business is about, even better, if you understand where do they move. I do not think that accelerator may open all the doors you need, but at least it gives you a floor plan which helps to cut some corners.

Good news is that unlike VCs, industrial partners are not always (not to say they are definitely not) focused on unicorns and 100x return in case they often do not invest at all. One may say everyone will be happy to get a hundred dollars for a one, but actually, it is not. Lowering the risk of startup’s failure is among the goals of an accelerator, so they are more likely to accept a small working and understandable niche startup, but leaving the risks of investing in the next Facebook behind.

Automotive startup programs at a glance

Currently, there are 22 programs supported by 27 companies, but this is likely to change over time due to several reasons. Startup acceleration is not an established industry, so some companies close their existing programs after a couple of batches, some increase the number of partners and so on.

Here is the list of programs and their key partners in alphabetical order:

AI Ventures (Toyota)
Alliance ventures (Renault, Nissan, Mitsubishi)
BMW Startup Garage (BMW)
Co-pace (Continental)
Drive (Honda, Volvo, Aptiv)
Fluxunit (Osram)
Future Mobility accelerator (Volkswagen)
GM Ventures (GM)
grow — Bosch’s Start-up Platform (Bosch)
Hella ventures (Hella)
Honda Xcelerator (Honda)
Impact Connected Car (PSA)
Infiniti Lab (Infiniti)
Inmotions Ventures (Jaguar Land Rover)
JLR Innovation lab (Jaguar Land Rover)
mobilityXLab (Volvo Cars, CEVT (Geely), Veoneer)
Startup Autobahn (Daimler, ZF, Porsche, Webasto, Hella)
Techfounders (ADAC, Knorr-Bremse)
Techstars Mobility (Ford, Honda, Volvo)
Toyota Innovation lab (Toyota)
URBAN X (Mini, BMW)
ZF Innovation hub (ZF)

I have put more details in a spreadsheet available here.

As of now, most programs are a part of a company, and there are only a few being held by independent organizations like TechStars, Startup Autobahn or Munich Technical University. Also, only 2 of every 3 programs are accepting applications right now, others are waiting for a relaunch or even put on hold (while the program seems to be active in general).

Geographically most of the programs are split between the USA and Europe, to be more precise, between Germany, as a home for many automotive manufacturers and suppliers, Silicon Valley, as world’s innovation hub and Detroit MI, thanks to a couple of very strong programs by Techstars and GM. Who else’s on the map? Israel, Sweden, China, and the UK. Not to be said that all of the accelerators accept applications abroad, but require to spend acceleration time on site.

What automotive startup accelerators expecting from applicants

There seem to be a few approaches that automotive accelerators share.

Focus area.

No matter if an accelerator has its own focus areas mentioned on the website or do not disclose what it is interested in, there are major topics which are considered automotive. They are:

• Anything connected with self-driving cars and active safety: AI, CV, lidars, radars and other sensors, sensor fusion
• Multimedia, HMI (human-machine interface), cybersecurity
• Electric vehicles
• Energy and batteries, advanced materials, powertrains
• Indoor and outdoor navigation, HD maps
• Mobility as a Service (MaaS) including car and ridesharing, logistics and fleet control
• Financial services and insurance

There is also a good explanation by McKinsey about where does the money go.

Stage.

Accelerators are focused on companies with at least an initial product to try. Some accelerators claim they are stage agnostic but do not forget that pilot project readiness is one of the advantages those programs give to a startup. No wonder you should be ready too.

I did not figure out any more common limitations that automotive accelerators imply. They accept companies abroad. Most of them seem to focus on relatively long-term relationships (6 months and more), but it reflects a style of the automotive business.

What one should check before applying to an automotive startup accelerator

Although you could catch the idea of what to consider an automotive accelerator, it is better to check individual focus areas (there is a comprehensive list of links provided here). They may vary from strict limitations (like Toyota’s call for innovations) to just an informal introduction email. Requirements may also be a bit controversial: when BMW expects to be one’s first automotive partner with its BMW Startup Garage, some other programs require traction.

It is always a good idea to check portfolio companies where applicable to understand what accelerator and industrial partners really want to see and what they note. Or you find your competitors what supposed to be a good sign. By applying, you may get relevant feedback from those, who have already accepted companies like yours.

Please, do not hesitate to write me back with any feedback. It would be especially appreciated if you can share any experience with the programs mentioned.

Ivan Koshurinov, koshurinov@gmail.com