Toyota is seeking the next wave of innovation in mobility, climate technology, artificial intelligence, and industrial automation. To achieve this, the company is committing $1.5 billion in new capital. This investment will support startups throughout their entire life cycle, from the initial idea and early development to growth phases and eventually into mature companies.
The company made two significant announcements that highlight its deepening involvement in the startup ecosystem. These moves also suggest how these startups and their technologies could become integral to Woven City. Woven City is a prototype city located on a 175-acre site at the foot of Mount Fuji in Japan, designed to incubate startups, which opened earlier this year.
The Japanese automaker has established a strategic investment subsidiary named Toyota Invention Partners Co. This new entity is capitalized with approximately $670 million. Concurrently, the company’s growth-stage venture arm, Woven Capital, launched its second fund with $800 million.
Toyota Invention Partners will adopt a long-term investment strategy focused primarily on startups based in Japan. This approach moves away from the traditional fixed investment periods common in other venture funds. George Kellerman, a general partner at Woven Capital, described Toyota Invention Partners as a bookend to the company’s other investment arms.
He explained that Toyota Invention Partners operates at the “zero to one” stage, dealing with the very earliest phases of a company. Toyota Ventures handles early-stage investments, and Woven Capital manages the growth stage. However, Toyota Invention Partners may also choose to support a startup through all these developmental phases. If a startup scales significantly, it could eventually transition to the balance sheet of Toyota Motor Corporation.
Kellerman stated that these announcements reflect Toyota’s strong commitment to startups and the new technologies they are developing. He expressed excitement about Toyota’s significant financial commitment, which totals over $3 billion across its various investment entities including Toyota Invention Partners, both of Woven Capital’s funds, and all Toyota Ventures funds. This comprehensive strategy is designed to meet the evolving needs of founders as their companies progress through different stages.
This investment approach is demonstrated by another recent announcement. Machina Labs, a Los Angeles-based advanced manufacturing startup that uses AI and robotics to quickly produce metal structures, received a strategic investment from Woven Capital. The startup will also begin a pilot project with Toyota Motor North America. Toyota will test Machina Labs’ technology for producing automotive body panels and accessories. The specific investment amount and terms were not disclosed.
Woven Capital, which began in 2021 with its first $800 million fund, continues to invest in global startups that are entering their growth stage. From its initial fund, the firm has invested in 18 companies, including Foretellix and the autonomous vehicle technology startup Nuro. It will continue to use capital from the first fund for follow-on investments in its portfolio companies.
The newly announced second fund, also sized at $800 million, will target 20 to 25 new investments. These investments will focus on companies from Series B to late-stage that are working on advancements in AI, automation, climate technology, energy, sustainability, and related fields. As part of this new fund announcement, Woven Capital has been restructured as a wholly owned subsidiary of Toyota.