ZF Venture Capital Unit Takes First Stake

FRIEDRICHSHAFEN, Germany – ZF Friedrichshafen forms a venture-capital division to assist in the investment and purchase of small startup companies, the German parts making giant says, and its first investment stake targets an autonomous-driving-technology firm.

Called Zukunft Ventures, ZF says the unit will actively invest in independent startups involved in specific fields of technology in a bid to tap their expertise and nimble business practices. It is part of a broader strategy aimed at accelerating technological advances and boosting ZF’s competitive edge.

The German word “zukunft” translates to “future” in English.

Among Zukunft Ventures' initial purchases is a 40% stake in German companies Ibeo and doubleSlash. ZF says they will provide know-how to further its development into autonomous-and connected-driving projects.

Hamburg-based Ibeo is a specialist in LiDAR proximity sensors and associated software. It is being tapped to expand ZF’s own sensor capabilities, which primarily are radar- and camera-based. By combining Ibeo’s technical expertise with its own research activities, ZF says it plans to make LiDAR systems more compact and easier to integrate into future automotive electrical platforms.

Ibeo’s knowhow in combining LiDAR-, radar- and camera-based sensors are expected to help ZF develop systems that make cars more aware of their surroundings, a key component in advancing existing autonomous-driving functions. The company is expected to grow from 50 employees to more than 250.

DoubleSlash, headquartered in ZF’s German home here, is a data and network specialist. With 100 employees, it will assist ZF in developing software architecture for connectivity functions as the industry seeks new network and communication solutions for future models.

Torsten Gollewski, managing director-Zukunft Ventures, says the strategy is to harvest technologies from smaller enterprises in which it takes a stake. However, ZF also plans to play a hands-off role, allowing some companies it partners with to remain independent.

ZF says its investments will seek ownership stakes of between 30% and 60%.

“They should keep their own business culture and speed of development,” says Gollewski, a former Audi executive.

The startups involved with ZF also will be free to sell elements of their technology to other suppliers and automakers, depending on the terms of specific investments.

ZF’s move to establish a venture-capital division comes after its purchase of onetime key rival, TRW, in 2015.

Unlike TRW, which is being integrated into ZF’s business operations, the smaller start-ups will operate separately.

“If you want to be attractive to these people, you have to give them a certain environment to work in,” Gollewski says.