Porsche is on the hunt for start-ups in the USA

Under the terms of the agreement, Porsche will initially acquire a minority stake in the new company. A full takeover is also possible after three years. The first two start-ups are to be founded this year.

“We want to strengthen our existing, broad-based start-up ecosystem with an external growth engine,” said Lutz Meschke, CFO at Porsche, about the cooperation with UP.Labs. In this way, Porsche secures “access to international talent and their know-how”.

The battery cell is the combustion chamber of the future. Porsche boss Oliver Blume

With their knowledge, the start-ups should help Porsche to better manage the upcoming transformation of the automotive industry with electromobility and digitization. With the young companies, the car manufacturer wants to “open up new sources of innovation”, as it was said. Porsche has been involved in the start-up scene since 2016 and has stakes in around 40 companies with new business models and new technologies.

UP.Labs will work directly with the sports car manufacturer to develop startups that can be tailored to the Porsche business model. This gives the people in Stuttgart the opportunity to integrate the company into their own organisation.

UP.Labs has developed a new type of participation platform

“The concept combines the advantages of free start-up development on the market – for example through the participation of all employees in the company’s success – with the direct involvement of our employees and a close connection to Porsche,” Meschke explained the special features of the UP.Labs cooperation.

The Los Angeles company has developed a new type of investment platform. The US team consists of experienced entrepreneurs as well as product and technology experts who have already successfully developed start-ups in partnership with other companies. Porsche is now UP.Labs’ first major partner to come on board from the outside, supporting the creation of start-ups from an automaker’s perspective.

UP.Labs is part of a consortium of companies all focused on driving the future of mobility and the transformation it brings. The so-called “UP.Partners ecosystem” includes a $250 million venture capital fund that will invest in the founded companies. In second place, Porsche then provides supplementary financing.

The sports car manufacturer sees no alternative to restructuring the automotive industry with electromobility and digitization. Porsche has continued to increase its own electrification rate over the past two years. Today, the Volkswagen subsidiary calculates that the share of purely electric vehicles in sales in 2030 will be a good 80 percent.

Pure electric models are central to the strategy. Although plug-in hybrids with combustion engines and electric motors are still relatively important in the current transition phase, they will become less and less important as the decade progresses.

Porsche relies on innovative advances in the battery cell

That’s why Porsche is looking for young companies with whom it can take a leading position in batteries. “The battery cell is the combustion chamber of the future,” emphasized Porsche CEO Oliver Blume several times. First of all, the venture capital spin-off Porsche Ventures last year took a stake in the battery specialist Customcells, with which the Stuttgart-based company wants to manufacture battery cells in a joint venture.

At the beginning of May, the second step in the matter of batteries followed with a stake in the young US company Group14 Technologies. Porsche is investing 100 million dollars there to secure access to better and more efficient cell technology. Group14 Technologies is working on using more silicon in the battery cells. Porsche and Customcells then want to produce the technically improved cells together.

The opportunity for a major leap in innovation lies in the new silicon-containing anode material in a battery cell, which makes the batteries more powerful. As a result, they can store up to 50 percent more energy with the same size. For the electric Porsche models, this means in concrete terms: more range.

>> Read herehow Porsche is strengthening its independence in other ways.

The automotive supplier Rimac has developed into Porsche’s most successful start-up investment in recent years. From the first small beginnings, an established company with more than 1000 employees has now developed. Company founder Mate Rimac has been repeatedly referred to as the “Croatian Elon Musk”.

A week ago, Porsche once again invested in Rimac in another round of financing with a double-digit million amount. Together with other investors, a total of 500 million euros was raised. Porsche first invested in the company in 2018 and gradually increased its stake. “With new investors on board, Rimac is further expanding its position in electromobility and is thus becoming an even stronger partner for Porsche,” explained CFO Meschke.

The electric car start-up merged its vehicle business with the VW Group brand Bugatti last year. Porsche holds 45 percent of the joint venture, the rest is held by Rimac Holding. Rimac has bundled the supply business in a second division. This division, which supplies parts such as batteries, electric axles and consumer electronics for other car manufacturers, is to be strengthened with the fresh money.

More: Sports car manufacturer Rimac receives fresh money of 500 million euros.