Why InMotion Ventures is going earlier and broader

Today we’ve got another one of our popular investor interviews for you.

The purpose of these is to introduce you to some of the people looking to put money into the kinds of companies we profile at PreSeed Now.

This time, we take a look at an example of early-stage corporate VC, with a look at InMotion Ventures.

But first:

• Radia Accelerator, a programme created by AlbionVC and Speedinvest, has opened applications for its 2024 cohort

• The programme is aimed at early stage SaaS companies led by women with operational tech experience who are moving their companies on from the inception stage

• Applications are open until 14 July

– Martin

Why InMotion Ventures is going earlier and broader with its corporate VC deals

Who is Sam Nasrolahi?

Born in Iran, Sam Nasrolahi moved to the UK as a refugee when she was a young child.

Her path to VC isn’t the typical 'banking or founder’ route. It took her through a Psychology degree in London, an internship for a management consultancy in China, and a Masters degree combining business and psychology, before eventually ending up at BP.

Sam’s work at BP included figuring out a future for engine lubricant brand Castrol in a world that would be dominated by EVs without engines, as well as more broadly how BP could align itself with a future that included autonomous vehicles, ridesharing, and the like.

From here there was a logical path into corporate VC, working for BP Ventures. Following this, she spent a couple of years working with ridesharing startup Via. Challenges here included helping to pivot the business through the Covid lockdowns and restrictions.

But she was drawn back to the VC world, which is how she found herself in her current role as a principal at InMotion Ventures, the venture arm of Jaguar Land Rover.

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MB = Martin SFP Bryant, SN = Sam Nasrolahi

MB: Tell us about InMotion Ventures, and how it’s changed in the time you’ve been there.

SN: InMotion Ventures is the CVC [corporate venture capital firm] of Jaguar Land Rover [JLR]. It was first set up in 2016. And initially set out to be very mobility focused, as you would expect from an automotive CVC.

And we did quite a few notable investments within that space, including [US-based Uber rival] Lyft, so it was very much looking at the movement of people and how that could potentially change.

When I joined and our new managing director joined, we started thinking about whether we wanted to keep doing that or if there were other elements of value we could bring to the JLR landscape?

We decided to broaden out our thesis, and it's changed quite a bit since then. So now we do three investment verticals: climate tech, industrial tech, and enterprise software.

And we look at those three quite broadly. Within the climate side, we look at true climate tech solutions such as carbon capture. We still look a lot at electrification, anything to do with batteries, EV charging hardware and software, as well as advanced materials. That's the vertical which my colleague Louis Fearn leads on.

I lead on the industrial tech and enterprise software spaces, which are quite different, but for us but have really good underpinnings within our strategic roadmap.

In industrial tech, we look at anything from design, to manufacture, procurement, supply chain, basically anything which would touch a manufacturing-style organisation, and then in enterprise will look quite broadly as well, from the application, to the infrastructure, to the developer tool side of things as well.

We also have the capability to look at more deep tech investments. We can do software or hardware, but tend to have a preference for software, as is classic VC.

We don't tend to lead rounds. We see ourselves more more as a specialist co-investor, which has enterprise links within Jaguar Land Rover and the broader Tata ecosystem which is obviously huge [JLR is owned by Indian mega-corporation Tata], but also with other CVCs and enterprises which we’re linked with.

We're technically global. We've made one investment within Brazil, but besides that our focus has been pretty strictly on UK, Europe, the US, and Israel, purely because the team is so close. The core investment team sits in London, and we have a scout in the US and a scout in Israel to help our efforts there.

MB: You’ve shifted from deals between Seed and Series B, to focusing on pre-seed to Series A. What’s the thinking behind that shift, and how have you found it?

SN: We saw that a lot of the value we were able to provide was really at those earliest stages, where it was really helpful to have a partner with deep enterprise and industrial links, and have a bit more subject matter expertise within those areas.

The shift was originally a little bit opportunistic. So we had two opportunities, which we were really, really excited about. They were Uncaged and ChipFlow, two pre-seed investments we made last year [PreSeed Now profiled ChipFlow back in November 2022].

We saw that the value we were able to provide to those startups was was quite substantial in terms of enterprise messaging, marketing and the go-to-market side of things, which is kind of expertise that we had in house.

We were able to link them up with Jaguar Land Rover as well to get their perspectives. JLR, as an automotive entity, is pretty helpful for those types of businesses.

Neither ChipFlow or Uncaged do purely automotive; they’re much broader than that. But knowing what JLR, as an indicative automotive customer, is concerned about, what regulations it needs to think about, and how it links up with its suppliers, there's a lot of thinking which can be helpful for the startups there.

In general, given all the kind of new tech developments in terms of AI and how there's a new wave of startups coming from this downturn, I think we're just seeing so much opportunity within that space that it felt like a natural way to go for us.

MB: What’s interesting you in your area of focus–industrial and enterprise–at the moment?

SN: Starting off in the industrial space, we saw a huge amount of activity around the end-to-end workflow from designing something, to simulating something from an engineering perspective, to the manufacturing side of things which is a very long kind of complicated chain.

I spent a lot of time mapping that out, and what the new technologies, such as A, will bring to the table within that space.

I was quite excited about technologies which brought a lot of benefit in terms of time or cost saving, because I think, particularly in the design space, we spent a lot of time kind of mapping out that a lot of the innovations would mean huge workflow changes and sometimes the people who would be there buying the product would then have to fundamentally change their team structure in order to use the product,.

In the engineering simulation space, we thought was quite exciting because it's essentially removing the need to have something very complicated like parameterised mesh sent to a supercomputer to crunch for like 100 hours. Is there like a better way of doing that to save time and be able to iterate faster?

The manufacturing space is also super interesting, but one that we haven't been so active in quite yet.

I think manufacturing feels like a very hard industry because you have to ‘fix and change the aeroplane whilst it's flying’. And a lot of people on the factory floor have very complicated setups, they're very unique setups, and they're like ‘Okay, well you're saying that you're going to solve X problem, but I get around it by doing ABC. And actually, this isn't 10 or 100 times better, so I'm not interested.’

So I think manufacturing is a really exciting space and there's a lot happening in it but we're very careful. We make sure that we really validate things, because I've had so many instances where something conceptually just makes so much sense. Like ‘we are this new software layer which is going to integrate all of your robotics brands’ and and then I'm ‘oh that like that sounds amazing’.

Then you go to someone on the factory floor or or someone even like more senior within the organisation and they say ‘we don't need another software layer, we don't have that many brands and we don't use them within production, we only use them within testing so this is useless’.

Investments that we’ve done within the more industrial side; there's obviously ChipFlow, there's one that we've done in the engineering software space that hasn't been announced yet, which we’re quite excited by.

On the supply chain and procurement side, there's a lot happening there, but I think they're both areas that have been like quite well funded so far and from my perspective, feel a little bit more mature.

So I feel like at the moment I'm seeing a lot of the same for those two areas, whether it's automating the long-tail spend within procurement, or supply chain transparency, which everyone’s been looking at, but I’m very open to seeing if there's anything really new and exciting there.

MB: How about AI for the enterprise market?

SN: This was like an area that I was personally really excited by and I think everyone was caught up in the ‘picks and shovels to dig gold’ kind of vibe. But I was quite cautious around this space because it kind of felt that we were getting very, very excited and but we didn't know what the big, enduring problems were yet.

It felt like a lot of the startups that were popping up were solving niche bu painful instances suffered by first movers in the testing phase, and it was like ‘okay, well is that problem actually going to endure or is OpenAI or Meta or anyone going to release something which will then solve that problem and bring it back into the platform layer?’

And I think we did see a lot of that. OpenAI would say ‘we've done this new release’ and then everyone would would be trying to pivot.

So again, we were looking for the very long-term, big problems, which from my perspective, was really customers deploying things at scale. I think we haven't really seen it shake out yet to see what those big, enduring problems are going to be.

But one investment that we did make within that space is a company called Verax, which we invested at the pre-seed earlier this year. Essentially, they're looking at creating the trust platforms for enterprises to deploy their own Gen-AI solutions.

So they’re developing a software stack on top of any kind of model. And we thought that was a really big, enduring problem because enterprises are always going to have concerns about safeguarding, trustability and the whole hallucinations thing. And it's not something that can be led by any platform because enterprises will want to build platform-agnostic, or switch around their platforms.

We've also done one which was announced recently called Firefly, which was a Series A, and that was looking at the multi-cloud management space. It was our first investment within Israel, and that was one that I led, which was quite interesting.

It was around the fragmentation and compliance issues around using lots of different clouds, as you use lots of different cloud providers for lots of different things. And we think that's only going to be exasperated by AI going forward because cost becomes a much bigger concern and, as everything fragments, all the workloads, code, SaaS applications you have just exponentially increase.

MB: In terms of potential startups to invest in, what are you looking for at the moment?

SN: I mean, I think we're probably looking for what every VC is looking for. I'm looking for kind of amazing, dedicated founders who really understand the market which they're in and the product which they're looking to develop, and have validated that that there's a big need there.

I think that's honestly the kind of main thing which which we're always looking for. So I’m looking pre-seed to Series A within my verticals.

We still get a lot of dealflow around things that are out of scope for us now. I get so many kind of scooter companies or haptic design for automotive vehicles, which completely makes sense looking at our history, but we’re very much looking to focus on the industrial and enterprise side of things.

MB: What should startups be aware of before they get into a corporate VC deal? Are there any potential pitfalls?

SN: Firstly, there are so many different flavours of CVC. I think it's really difficult to bucket it into one.

We think of it as a bit of a spectrum from very financially focused on one side, to very strategic on the other. And a lot of these different companies will have different value-add promises they can make to startups. And a lot of them have different processes and requirements for investment, pre-investment and post-investment. So I think it's really important to understand that.

For us, there needs to be a degree of strategic relevance for being inside our investment themes, but there's no stipulation that there needs to be any proof-of-concept or commercial development agreement before, or even after, we invest. We need a degree of internal alignment, but there's no hard requirement. which allows us to move much more quickly.

But also, something that we make really clear in terms of managing expectations is that because InVentures has invested, it doesn't necessarily mean that you're going to get something signed with Jaguar Land Rover, once we do invest.

Of course, if it makes sense for both parties, and there's interest for both parties, we 100% connect them. That can mean different things, from advisory, to becoming a design partner to some kind of tangible collaboration, whether it's a proof-of-concept or commercial development agreement.

But we're very upfront that it's not something we promise. So the value-add that we bring is the industrial links and the connection whether it's JLR or Tata, or different enterprises, and the subject matter expertise within the automotive space, but also enterprise and industrial.

A lot of the value-add that we propose from us as investors is in terms of the operational expertise that we have and the support which we can give in terms of marketing, branding, and all of the rest of it. And then the possibility we can link you up, but don't take it as a promise.

So I think it's really important for startups just to have that clarity of in terms of what are are both sides actually expecting from a CVC investment.

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