Renamed i8, the BMW Vision concept will be one of the first two models for the maker's new BMW i sub-brand.
No risk, no reward, right? Corporate graveyards are littered with the decaying remains of corporate business ventures and significant investments into unknown businesses about which little was known, technology was paramount, executive management was inexperienced or the board of directors was brain dead. Not exactly a stunning review or forecast of the future, especially now.
That is why it was surprising when BMW, known for its calm, considered and cautious approach to business, announced BMW i Ventures, a venture capital company with an investment fund of up to $100 million to develop “individual mobility solutions” for the world’s biggest cities. This is in addition to the previously announced BMW i secondary brand of the Munich based company.
BMW i, according to a recent statement, is the new business for sustainable vehicles and mobility solutions including the BMW i3 and BMW i8 model cars, to be launched in 2013, that will be built in a new €400 million factory in Leipzig, Germany. “The BMW i brand is the response to changing customer needs, including increasing demand for alternative drive trains, such as electric drive systems and hybrids’,” noted Ian Robertson, member of the Board of Management of BMW AG responsible for sales and marketing.
Joerg Reimann, managing director of the new business told me in a recent telephone interview, “BMW i Ventures is the second pillar under the BMW i brand is focusing on services not necessarily connected to cars,” which, he admits, is, “An unconventional approach.” The new division is aiming at consumers in high density, megacities where not all will own or need to own an automobile – thus increasing the need for solutions involving public transportation and organizing one’s life.
The new BMW i logo.
One of the first investments of BMW i Ventures was in a start-up company that developed the “MyCity Way,” a free smart phone app which aggregates information of 40 cities in the US and Europe including public transportation, parking, entertainment and a long list of other functions. The MyCityWay app was one of the winners of New York City’s inaugural Big Apps project.
Other investments of BMW I — but not necessarily BMW i Ventures — is in “sustainable vehicles.” Reimann pointed to the new i3 and i8 vehicles which will be built in a new factory, primarily of carbon fiber developed by a joint venture BMW has with a company in Washington state.
The venture is also exploring car sharing through a project now underway in Munich — which will expanded to other locations in Europe. The suggested benefits of car sharing include decreased traffic, lower fuel consumption and the potential to make more parking available.
The BMW-funded MyCityWay iPhone app.
This new business would seem to be a clone of ZipCars, the car sharing service whose IPO is scheduled for this week. SEC documents indicate ZipCars, which Reismann noted is now buying Bimmers, expects to raise $133 million. The car sharing service is now in 14 metro areas, as well as on 230 college campuses, and has almost 500 thousand people who have signed to use it — but has yet to make a profit.
That sounds like a good business, doesn’t it? And perhaps that’s why it is being explored for the U.S. by BMW.
Edward Robinson, a three decade BMW veteran will be the president of BMW i Ventures in addition to his duties as president and CEO of BMW Financial Services, American Region. Robinson explained, “We have chosen to base our operations in New York City because of its position as a center of digital media and technology.”
Given the rather tenuous nature of the automobile business, new EPA and European regulations, higher gas pump prices and a surge in interest for alternate fuel vehicles it will be interesting to follow the progress and programs developed by the new venture.