BMW i Ventures has a new $300M fund and AI is riding shotgun

BMW i Ventures has launched a new $300 million fund with a timely thesis: AI will reshape how the automotive industry operates. And the independent venture arm of BMW AG wants to be in the driver’s seat.

The fund, announced on Wednesday, will invest in early-stage through Series B startups in North America and Europe that are working on agentic AI and physical AI (a term that includes AI applied to robotics and autonomous vehicles) as well as industrial software, advanced materials, and manufacturing and supply chain technologies. This third fund brings the firm’s total capital under management to $1.1 billion.

The catch, of course, is to find AI startups that aren’t simply riding one of the buzziest tech trends in decades.

“We always try to adjust and shift our focus towards what are the new trends, not just for the trend’s sake, but for what will actually determine the future,” Marcus Behrendt, managing partner at BMW i Ventures, said in a recent interview with TechCrunch.

The firm’s previous funds reflect Behrendt’s thinking. When BMW i Ventures launched its first fund in 2016, autonomous vehicles and digital tech sat at the center of its investment strategy. Its second fund in 2021 focused on startups working on sustainability and the supply chain.

To Behrendt and managing partner Kaspar Sage, AI is not only the next big trend, it will be the foundation that other technologies are built on. And ultimately, these will change robotics, how software is developed, and how cars are produced, they said.

Sage, who is based out of the firm’s Silicon Valley office, said some of the biggest opportunities are those that may appear mundane, but have a lot more impact. One example is Synera, a German company backed by BMW i Ventures that uses AI agents in the design and engineering process, Sage said.

Synera started as an integration software company that helped engineers automate and streamline complex design workflows for industrial engineering. The company then built AI agents on top of its platform, which already contains data on materials, sizing, and other engineering parameters, Sage explained.

“And what you get out of this is crazy, because you can basically cut down a process of, let’s say, three weeks of time that humans would interact with one another to make a certain change, and you can cut down that to minutes,” Sage said. “And that’s so powerful, if you think about it.”

The VC firm is still committed to other categories that it has previously invested in, including advanced materials and circular supply chains. Behrendt said the new fund’s focus on AI expands the toolkit for sustainability rather than replacing it.”

The firm hasn’t made any investments out of this third fund yet. But its second fund, which is in the midst of wrapping up, does include investments in a number of AI-focused startups, including five recent ones that the firm isn’t quite ready to talk about. In all, the firm has used the second fund to invest in more than 35 investments.