There’s a BMW for That

The “ultimate driving machine” wants to redefine premium performance—and not just for torque, but for processor speed.

When BMW recently announced the launch of its new electric sub-brand, the i-series, it also introduced another creation: a $100 million venture capital fund, iVentures, designed to invest in new mobile services for both on and off the road.

Its first—and so far only—move has been to take a stake in My City Way, an app launched
at the end of 2009 that provides users with information on parking availability, local dining and entertainment and public transit information in over 50 cities in the U.S., Canada, Europe and Asia.

Sonpreet Bhatia, one of the three founders of My City Way, says BMW is one of four backers—which include the New York City Economic Development Corp.—that have raised $5 million for the company’s app. (She declined to reveal how much BMW invested.) She said the automaker has not influenced the development of My City Way to date, but that going forward it “will give us as much support in expertise as we ask.”

For a company previously reluctant to distract drivers with even the addition of cup holders, BMW’s new pursuit of mobile partnerships underscores a fast-growing trend of cars as mobile communications platforms. Last week at the Geneva Auto Show, for instance, Rinspeed unveiled a concept car that reads e-mails, Facebook and Twitter updates to drivers who attach their smartphones or iPads to a charger in the electric-powered vehicle before they set off.

Munich-based BMW’s commitment to new mobile applications is significant. German automakers have long maintained a focus on the driving experience itself, no doubt reflecting the serious mind-set of those hurtling along the no speed-limit Autobahnen. The automaker’s change of heart recognizes the increasing ubiquity of mobile communication in the lives of consumers, particularly younger ones, and the new market opportunities inherent in that change.


In a blog post BMW described its new investing emphasis as a way to deliver “innovative mobile solutions that improve urban mobility, inside and outside of the car,” and described it as “a quest to help shape the cities of the future.” In launch comments about the New York-based i-Ventures fund, BMW said: “This will allow the creation of a new, profitable area of business over the long term and attract new customers to the company’s brands.”

Jeremy Anwyl, CEO of Edmunds.com, said that going back to the early ’80s, when GM bought IT company EDS—now HP Enterprise Services—automakers have wanted to introduce new technology into cars. Their ideas, however, often outstripped the technical ability to deliver them. In addition, car manufacturers’ product development cycles were out of sync with the pace of technological change, and there were (still ongoing) safety concerns about technology introducing new driver distractions.

But over 10 years ago, Ford initiated a partnership with Microsoft that has since created features generating consumer buzz and attracting younger drivers to Ford’s brands. Ford’s SYNC communications and infotainment system, built on a Microsoft Windows-embedded automotive platform, helps drivers connect and voice-control their mobile devices while driving, for instance.

Other manufacturers like Honda and Toyota have since stepped up their investments in emerging technologies. Even GM, after it emerged from bankruptcy, created General Motors Ventures LLC, a separate fund to support startup companies and their products.

And as automakers help bring to life new technologies, they’re betting that they will change the perception of their brands for consumers who increasingly view technology as a standard part of their surroundings.

“At some point you’ll pull into your garage and the car becomes part of your home network,” said Edmunds.com’s Anwyl. “It’s still kludgy, a lot of the interface is not very elegant yet, and in the short term you still have the conflicts between safety considerations and technology, but I’m quite optimistic they’ll be worked out.”