Porsche Ventures is the sports car manufacturer’s venture capital (VC) division. Its priorities are to help facilitate Porsche’s strategic objectives and to generate a financial return. Over the last few years, it’s invested in the likes of Rimac Automobili and Ridepanda in the U.S. Porsche Digital is the German car maker’s technology and digital unit.
Auto Futures has been talking to Stephan Baral, Managing Director at Porsche Digital Inc. and Head of Porsche Ventures USA.
Baral was born and raised in southern Germany close to Stuttgart, a city that remains the heart of the German automotive industry and is the home of Porsche. In his current role, he now operates from Palo Alto in California.
“I was always eager to do my part to shape the future of such an exciting space that faces more disruption than ever today. In order to push this industry forward, innovation, investment and partnerships are crucial to the story, and that is my focus at Porsche Digital. I am driven by the constant challenge and change that the broader mobility and automotive industry presents,” says Baral.
In 2016, Porsche decided, that outside of its core business, VC would be a great tool to support the changing automotive landscape.
“When thinking about the many directions the space is expanding into – electrification, autonomy, new mobility, and the rise of new ecosystems – this means that customer needs, expectations and requirements will be shifting as well, and we need to be ready to move accordingly. Today, our CVC operates across six locations worldwide with around 20 people working on scouting, investing and portfolio development and we have a venture portfolio of more than 20 active investments,” he explains.
It invests in companies developing technologies or creating business models that are adjacent to Porsche’s core business. It concentrates on four key areas: car and mobility, intelligent enterprise, sustainability, and a category that it calls ‘Beyond’, e.g. smart city and living.
“Porsche has built a legacy as a lifestyle brand and with our investments in the ‘Beyond’ category, we are identifying opportunities that align with our brand values to create future customer environments, build new digital experiences, and address the emerging interests of our community. Personally, I’m most excited about ‘micro-communities’ – platforms that create a trusted network of people with a common passion or interest,” explains Baral.
“Our VC arm invests in early-stage companies in their first phase of growth. We have a global approach and are not limited by geography, but rather we focus on teams that are passionate about their mission and want to build their dreams alongside us.”
Investing Success Stories
One of Porsche Ventures’ most successful investments was in 2018, when it invested into the Croatian start-up, Rimac Automobili.
“Our investment led to a close strategic partnership between Porsche and Rimac, which has culminated in the recently announced Joint Venture Bugatti-Rimac,” says Baral.
A more recent example is Cresta – an artificial intelligence (AI) company which specialises in messaging and voice communication to enhance customer support. Alongside the investment, Cresta’s software will be rolled out across Porsche Cars North America, Inc. (PCNA) and Porsche Financial Services (PFS), Inc.
“We invested in the Silicon Valley based team a couple month ago and Porsche Cars North America will soon implement the Cresta technology across several customer touchpoints. The omnichannel approach is key to a unified and seamless Porsche customer experience. Porsche is Cresta’s first automotive partner and as investors in the business, we aim to support the team as they look to grow in the automotive industry,” says Baral.
“We can add value by providing direct feedback on their product roadmap, helping the team develop a solution that not only addresses Porsche’s needs but that is built to be relevant for the automotive industry in general.”
In June, 2021, Porsche Ventures invested in the California-based, electric micro-mobility start-up, Ridepanda. The funding will enable the company to hire talent across the U.S. and help encourage the adoption of light electric vehicles in the U.S.
“Ridepanda is a one-stop-shop for e-rides offering a handpicked selection of e-bikes, e-mopeds and e-scooters, along with essential add-ons including financing, warranties and personalized customer services. The electric micro-mobility market is extremely fragmented with several grey market products of substandard quality. With Ridepanda end-users benefit from quality control and a one-stop-shop that addresses any need that may arise during the personal ownership journey, while manufacturers benefit by extending their reach,” says Baral.
Ridepanda‘s Co-Founders, Chinmay Malaviya and Charlie Depman, previously worked at leading micro-mobility sharing companies, Lime, Bird and Scoot.
“We believe in their ability to execute on their mission and vision. Additionally, the personal mobility market is transforming, and consumer preferences are evolving rapidly. Our investment into Ridepanda creates an exciting opportunity for mutual insights about what customers are coming to expect from mobility products and service providers and how to best meet this demand,” he adds.
“We get excited about technologies that help us create the best product…”
As well as financially supporting start-ups, Porsche Ventures can help them grow in many other ways.
“We have built a team with expertise in both the mobility and automotive industry, but that also has years of traditional venture capital experience under their belt. This unique combination is a great value add to the founders that we have the privilege to work with,” explains Baral.
He adds: “We know that there is sufficient capital circulating in the VC ecosystem, so we feel our unique ability to bridge between the start-up community and our broad reach across the Porsche brand, and more broadly, the VW group, is very beneficial to those companies operating in our space. We are all super passionate about what we are doing and are committed to being active partners in helping our companies penetrate the automotive industry in a meaningful way.”
Porsche Ventures is technology-agnostic, says Baral.
“We get excited about technologies that help us create the best product, deliver the best customer experience, and connect more deeply with our community. With this in mind, we don’t limit ourselves to any specific technology, but rather look at applications of a broad set of technical advancements such as artificial intelligence, predictive and contextual modelling, blockchain, and virtual and augmented reality.”
One area of mobility that Baral is particularly excited about is vertical mobility.
“Various studies show that vertical mobility could become a reality from 2025. We would like to be part of that. Porsche recognized urban air mobility as an attractive future scenario with great potential very early on. Even beyond urban air mobility I believe that vertical modes of transportation can lead to disruption across the supply chain, logistics and even the racing space,” he notes.