Hey startups, if you've been shilling your pitch deck to traditional VCs and not getting anywhere with warm introductions, you might want to consider corporate VCs (CVCs).
The rate of CVC investments on the rise
In the last 10 years, corporate investing has gone from about 15 per cent of overall VC funding to about 29 per cent. Today, around 25 per cent of all deals include a CVC, compared to just 10 per cent a decade ago, thanks to companies with CVC arms like Nvidia, Google, Facebook, Softbank, Samsung, Eli LIli, Microsoft and Apple.
I sat down with Mike Smeed, managing director at InMotion Ventures, the venture capital arm of Jaguar Land Rover (JLR). Founded in 2016, its investment focus spans the UK, Bay Areas, and Tel Aviv, typically investing in early-stage startups, typically at the Seed to Series A stages, with check sizes ranging from $250,000 to $2 million.
He asserts:
"CVC is a proper thing, not a hobby for companies, it's actually about creating financial and strategy value for companies, and a fantastic example of how corporates adapt to the changes in the external environment."
He also highlights a broader cultural gap — few senior executives in large blue-chip corporations have traditionally embraced or grown up with CVC.
"Despite this, we've established ourselves as one of the most active corporate investors in the UK, ranking seventh among top CVCs alongside names like Shell, BP, HSBC, and Barclays."
InMotion Ventures was initially established to explore the future of mobility, smart cities, and related technologies. However, the focus shifted to align more closely with Jaguar Land Rover's (JLR) strategic transformation and increase the pace of innovation.
This transformation extends beyond manufacturing. It influences dealerships, customer relationships, and even how customers buy cars. Advancements like software-defined vehicles and connected cars have redefined the industry's priorities.
InMotion invests in a variety of companies, including:
- Bumper (BNPL for repairs)
- ChipFlow (custom semi-conductors)
- Circulor (supply chain traceability)
- BeyondMath (advanced engineering simulation)
- Uncaged Innovations (bio-leather)
- Verax AI (Gen AI infrastructure)
Smeed asserts that automakers have realised that trying to handle everything internally, as they used to, is no longer viable. Attempting to do so would either require an unsustainable workforce or take far too long — by which time new entrants like Tesla, Rivian, and BYD, free from legacy constraints, would have already seized market share.
"EVs are coming out of areas like China and Vietnam, where their development cycles are in months, not years."
The advantage of a parent company
A startup in the JLR ecosystem has access to literally thousands engineers, product managers, and salespeople across companies as well as customers and suppliers.
InMotion Ventures operates as a wholly-owned subsidiary of JLR, structured as an off-balance sheet evergreen fund.
However, Smeed admits:
"We do at times invest off JLR's funds. Therefore, when we see something outside of our thesis in terms of stage, we have the ability, through a bit of Excel magic, to have our allocation grow because we take money from another business unit or function. That helps us to provide that flexibility in our investing, increasing our annual capital deployment."
What kind of support does InMotion provide its portfolio companies?
According to Smeed potential portfolio companies are evaluated against JLR's roadmap as well as the broader Tara group which includes hundreds of companies.
"Some areas are already covered by collaborations within the group or with major tier-one suppliers like NVIDIA, Bosch, and Continental. This allows us to focus on areas where startup engagement could provide meaningful value to both parties.
We then engage our partners, including due diligence and technical experts, to help assess the startups."
A key part of this process involves a joint call with the founding team and InMotion's technical experts to dig into the details of the technology.
Smeed details that a startup's trajectory needs to align with JLR's needs:
"We assess whether an investment would add value beyond a simple transactional relationship. If no additional value is identified, we wouldn't invest — although the relationship with the startup might still grow through other means.
However, when we do invest, we aim for scenarios where the relationship creates exponential value — the "one plus one equals three" effect."
In some cases, InMotion is a startup's first OEM or enterprise investor. This can lead to opportunities like proof-of-concept collaborations, design partnerships, or helping a startup transition from niche markets like F1 to mainstream automotive applications. These mutual benefits are key to determining whether an investment makes sense.
Over 90 per cent of InMotion's portfolio actively engages with JLR in some capacity. Five of the 18 companies currently engaged have commercial contracts as suppliers or customers of JLR. The others are either in the procurement process — working through RFPs and similar steps — or involved in design proofs of concept or partnerships.
Of course, when startups reach the procurement stage, they must stand on their own merits.
The luxury of long-term vision
InMotion's access to parent capital means its not fundraising every three or four years, and it can invest in early-stage companies for long-term innovation.
Smeed detailed that the premium and luxury EV market operates very differently from traditional automotive.
"While the dynamics of this segment differ, one of the key reasons we've shifted our focus to earlier-stage companies is, paradoxically, that JLR's R&D and engineering-led culture finds it easier to engage with startups at this stage.
Bringing in earlier-stage companies also allows JLR to foster innovation at a foundational level, which can be particularly beneficial in exploring emerging technologies and ideas."
What to look for in a CVC
So what are some things to consider if you're looking for funds from a CVC? Smeed suggests that goal alignment is the most critical factor.
"It's essential to understand what the CVC is seeking to achieve.
Traditional VCs are relatively straightforward — they aim to generate returns, support startups to achieve traction, and ultimately seek an exit. Their value is often clear: they bring expertise, board-level contributions, and networks.
CVCs, however, are more complex because their operations depend entirely on the parent company's strategy and goals."
Less experienced founders, particularly those spun out from universities, might assume that engaging with a CVC automatically leads to being acquired or gaining a customer. While that can happen, it's not always the case.
Founders should ask:
"What is this investor's purpose? What do they offer beyond capital?"
InMotion provides strategic expertise, and support in areas like communications, and access to a retained PR agency. Smeed, however, stresses that startups and automotives like JLR, "operate in vastly different worlds. What a startup considers 'lightning fast,' a large corporation might see as 'glacially slow.'
Large companies have systems — like procurement, legal, and governance — designed to mitigate risk, which can make navigating these environments challenging for startups.
This is why many CVC units, including InMotion, operate independently from the parent company. This independence allows them to move faster and make decisions more quickly in a competitive landscape.
Yet Smeed notes that the traditional VC cash cycle—living off exits and reinvesting proceeds—isn't as sustainable now.
"Many CFOs are starting to scrutinise their CVC units more closely. What was once seen as a cash-generating or self-sufficient arm is now viewed as a cost centre. Questions like, 'Why are you costing us money all of a sudden?' are becoming more common."
InMotion's ability to demonstrate tangible value is critical in this environment. The fact that over 90 per cent of our portfolio companies are actively working with JLR and have introduced JLR to startups that are saving the parent company money or reducing development timelines is a huge benefit.
Further, Smeed notes that "VCs are increasingly looking to us for credibility. For example, a prestigious VC recently approached us regarding a company they were interested in. They appreciated the technology and the team but wanted validation of its potential enterprise use case. After conducting diligence and investing, we assured them that this solution addressed a genuine problem."
This kind of partnership showcases how CVCs can add value beyond the capital, particularly in fields like AI, where nearly every innovation is seeking a foothold.
Smeed admits, however, that securing a spot in the funding rounds of exceptional startups can be difficult.
"The hottest rounds can open and close within a week. If a CVC has an eight-week decision-making process, it will struggle to compete. While we can't operate on a 24-hour timeline like some VCs, we strive to balance speed with diligence."
But for later-stage startups, particularly those at Series A, InMotion often stay in touch for 12 months or more after missing earlier rounds, allowing it to anticipate opportunities and position itself for quick action when the time is right.
Lead image: Mike Smeed, managing director at InMotion Ventures. Photo: uncredited.
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