As technology becomes more important in passenger vehicles, automakers have increasingly reached outside of their own ranks and those of their traditional suppliers to keep up with the rapid rate of innovation sweeping the industry. General Motors and Ford have engaged independent app developers, while Mercedes-Benz parent company Daimler has been on a startup buying binge in the mobility space.
BMW and Jaguar Land Rover both launched initiatives earlier this year to incubate fledgling tech companies. BMW introduced a virtual Startup Garage in April “to tap directly into the potential of particularly innovative startups,” it said in a statement. The program “is not restricted to companies in the automotive sector, but extends to technologies that can be transferred to automotive engineering applications,” the company added.
Jaguar Land Rover instead constructed a physical facility, not in its native England, but in Portland, Oregon to attract startups. The 25,000-square-foot JLR Tech Incubator will house up to a half dozen startups at a time in a six-month program that furnishes companies with up to $250,000 in direct investment, in-kind work and office space.
The exact amount of investment in each startup will vary, and JLR will take equity in incubator startups ranging from 5 to 20 percent depending on the startup and the investment size, according to Matt Jones, head of Future Infotainment for Jaguar Land Rover and director of the incubator.
During a recent tour of the new facility, Jones said that the idea behind the JLR Tech Incubator is to “advance early-stage technology start-ups that are positioned to disrupt the world of connected cars and infotainment technologies” and provide access to technology “to keep JLR customer offerings at the forefront of innovation.” He added that the incubator seeks to attract early-stage technology companies innovating in areas such as consumer electronics, augmented reality, cloud-based technologies and data analysis and HMI. Jones stressed that the facility is not just focused on automotive-related technologies, but will foster innovation across a wide spectrum of industries.
Each startup will receive its own 700-square-foot private suite with individual work stations, a large screen LCD display and high-speed Internet access, as well as access to common areas in the facility. The startups will have access to the equivalent of two full-time engineers to provide services such as graphics and software development support, and the program will also provide the tools and expertise needed to integrate technology into JLR vehicles.
JLR plans to eventually select around 120 start-ups that it will work with over the next 10 years. “We will have at any one time up to six companies under incubation,” said Jones. “They’ll have all their own dedicated facilities for a period of time so that they can really have a home for their business.”
Jones noted that the start-ups will not only get tailored mentoring from JLR, but also from “a network of other partners that we’re building up so that they’re not just a technology company with fantastic products, but a well-rounded business that can go out in the world and survive and thrive. They’ll have an understanding of finance and strategy and real estate and everything else they need to be really successful,” he added.
The company expects around six startups to be part of its first class, and an average of 12 companies per year to be part of the program. The application period is now open and the inaugural group will be chosen by the end of November. The first startups selected will be announced at CES 2016 in Las Vegas and take up residence at the incubator in January.
JLR is also taking advantage of the Portland area’s expertise in open-source technology and the automaker’s close relationship with the GENIVI open-source automotive initiative, Intel and the Linux Foundation. Earlier this year, Jaguar Land Rover also opened a 15,000-square-foot product research facility called the Open Source Technology Center in Portland’s trendy Pearl District, just a few blocks away from the incubator. One of the main focuses of the JLR Incubator and the Tech Center will be developing an open-source platform for not only JLR vehicles but creating an ecosystem for the automotive and related industries.
According to Jones, the Tech Incubator is a long-term commitment on the part of JLR. “It’s not about JLR or one company, it’s about the 120 companies over 10 years,” Jones said, referring to the ecosystem of startups the incubator intends to foster.
Jones added that the incubator isn’t “a one-way street. We end up in a symbiotic relationship where we bounce ideas off of each other. We want to work with startups and say, ‘Your technology is cool. I can see how it works on a tablet. But I can see how it also works in a vehicle.’ They have some great ideas and are enthusiastic,” he added, “but when it comes together we get a much better product in automotive.”
This article was written by Doug Newcomb from Forbes and was legally licensed through the NewsCred publisher network.