Toyota Ventures Climate Fund: Bridging the Gap Between Headwinds and Innovation
By Lisa Coca, Partner, Climate Fund
When I was first approached regarding the partner position for Toyota Ventures’ newly-minted Climate Fund, I was completely over-the-moon with the idea of returning to the world of climate tech, having spent time on the scene of cleantech 1.0 during my days at General Electric. My excitement was also fueled by the tailwinds of today that were not present during cleantech 1.0, and my belief that “this time, it will be different”. Finally, I was enchanted with the idea of being able to support entrepreneurs and transformative technologies that can truly change the world.
At the same time, I have spent most of my professional career — which spans financial services, innovation and venture — at large organizations, and I was skeptical about joining a corporate venture group given some of the challenges and missteps I’d seen in the past. It’s no secret that corporate investors often fall into the trap of investing too close to the core, moving too slowly, and focusing on the parent company as the customer — instead of the entrepreneur.
That’s why I was thrilled when I met Jim and the rest of the Toyota Ventures team and discovered that we shared similar founder-first principles. Jim has been both a business executive and serial entrepreneur, and is intimately aware of the potential benefits and pitfalls of corporate-startup partnerships. Toyota Ventures has been architected to take advantage of the good and avoid the bad, and the team is unabashed in the pronouncement of the firm’s mission…We invest to help discover “what’s next” for Toyota. When I started on the team, I was fascinated to learn that Toyota was originally founded in 1926 to manufacture and sell automated looms! “What’s next” is the lifeblood of the company and both Toyota Ventures and the Climate Fund continue in that tradition.
So, while many large corporations focus on investing at the intersection of (or close to) a particular sector and its core business opportunities, the Toyota Ventures Climate Fund will invest within — but also outside of — the crosshairs of climate change and mobility. It is the fund’s mandate to invest more broadly in support of Toyota’s commitment to carbon neutrality and cutting-edge technology to get us to net-zero.
What is the Toyota Ventures Climate Fund looking to invest in?
While our playing field is broad, we believe that our end goal can be achieved by identifying key industry friction points and pairing them with disruptive solutions. For example, there is considerable friction between electrification and decarbonization. Electrification is key to decarbonization, however, electrification will decarbonize only if there is ample, affordable, and available clean energy. According to McKinsey & Company, in a deep decarbonization scenario, widespread electrification could cause power consumption to triple by 2050. To limit those incremental carbon emissions, power generation must significantly accelerate its transition to clean power. We need to add more tools to the toolbox — greater diversity in clean power sources, longer duration storage, local production, to name a few — and of course, all must be affordable.
As Jim mentioned in his blog post about the Climate Fund, our team is well underway in sourcing and evaluating startups, and you can expect to hear about some of the companies we’ve funded in the coming days and weeks. In the interim, below is a closer look at the areas the Climate Fund is vetting. As always, we are searching for the best entrepreneurs and most innovative technologies to support Toyota’s commitment to carbon neutrality and fighting climate change head on. They include:
- Hydrogen production and utilization
- Alternative clean energy sources & fuels
- Batteries (manufacturing advanced chemistries)
- Circular economy (carbon, vehicles, batteries & plastics)
- Blue & green carbon
- Food and agriculture
- Credit markets i.e. tools to track, measure and report
To carbon neutrality and beyond: follow Toyota Ventures’ Climate Fund journey
While it might seem like a monumental task, we look forward to the journey, and to working with entrepreneurs who are accelerating the feasibility, scalability, and economic viability of technology to combat climate change. If you are a founder with an idea that mirrors this vision, I encourage you to apply now on our website. Our Platform team is also hiring a portfolio engagement lead to support Climate Fund startups; learn more on our jobs board.
