Carmaker worry that the hassles of driving, such as battling traffic and finding a parking spot, are hurting demand for their products. Brian Summers/First Light
BMW has been making cars for about 87 years. Now, it’s getting into the business of parking.
On Wednesday, the German carmaker’s investment arm, BMW iVentures, said it had backed Zirx, an 18-month-old mobile parking service. Zirx’s mobile phone app allows drivers to hail a valet who will pick up their cars curbside, saving them from circling the block in vain for a spot that probably doesn’t exist.
“The way people are using cars is changing,” said Ulrich Quay, managing director of BMW iVentures. “We’d be dumb if we didn’t react to that.”
BMW and other global automakers are investing in car-related services, including navigation apps and alternative fuels, they hope will make owning a car more attractive. The wave of investments comes amid concern that ride-hailing apps like Uber will end car ownership as we know it.
Beyond BMW, General Motors, Ford Motor Company and Honda are among those with dedicated venture capital arms. Their spending is growing.
Already this year, the venture arms of global automakers have invested $767 million in startups, according to venture research firm PitchBook. That’s almost six times the amount they spent last year.
Carmakers are reportedly out-bidding Silicon Valley buyers for technology that could change driving. In July, BMW, Volkswagen and Daimler teamed up to pay $2.7 billion for Here, a digital mapping service for self-driving cars formerly owned by Nokia.
“When cars are economically unviable, no one will have cars,” said Kurt Buecheler, an executive at parking startup Streetline and the chair of the National Parking Association’s technology board.
Authomakers are taking a page from one of their biggest threats — ride-sharing companies like Uber and Lyft that give city dwellers a reason not to own cars. Uber CEO Travis Kalanick has even said that’s his goal.
In 2011, GM began backing RelayRides, a service that allows people to rent other people’s cars. The peer-to-peer rental service has raised $48 million from investors.
In June, Ford Motor’s investment arm partnered with two car-sharing startups, Getaround in the US and easyCarClub in the UK. Daimler and Volkswagen have also backed car-sharing startups.
Car companies are also hoping their investments will help keep a lid on the costs of filling a tank, the single biggest reason that 18- to 29-year-olds in America don’t own cars, according to consultancy Deloitte.
So they’re funding alternative energy startups. Honda has invested in biofuel maker Virent. Toyota and BMW have both funded ChargePoint, which operates nearly 24,000 electric vehicle fueling stations. This summer, GM backed an electric battery company, Proterra.
Zirx, the parking startup recently backed by BMW, sends valets at the touch of a button to pick up cars curbside. The company’s network has more than 500 valets spread across Los Angeles, New York and four other major American metro areas. The valets will park a car and return it washed and filled with gas at the driver’s request.
BMW has also backed another parking company, JustPark, which lets drivers reserve spaces in garages.
“We don’t talk about ourselves as just a car company anymore,” said BMW’s Quay. “We talk about ourselves as a leader in mobility services.”
F-U-N-D-E-D is a regular column looking — and sometimes laughing — at what Silicon Valley has backed in the last week.