BMW’s Bernhard Blattel on New York City as a Hub of Mobility Services

5/3/11Follow @arleneweintraub

In February, Munich-based car giant BMW set up a corporate fund, BMW i Ventures, in New York City, with the goal of fostering startups that are developing location-based technologies. The fund’s first investment was MyCityWay, a company founded by three former Wall Street execs who created a series of apps designed to help people find products and services in 50 cities around the world—starting with their hometown of NYC. BMW is currently searching for office space to house the fund and an accompanying technology incubator.

BMW’s head of Project Mobility Services, Bernhard Blattel, is based in Munich and working with a team of four New York-based colleagues to get i Ventures off the ground. Xconomy spoke with Blattel by phone about why the automaker is fostering the development of technologies that are not necessarily car-based, and why it chose New York as the fund’s home.

Xconomy: What was the genesis of BMW i Ventures?

Bernhard Blattel: We were seeing trends that we thought provided growth opportunities for a company like BMW. One trend is growing urbanization—the tendency for people to move into urban areas. These people will still have the need for mobility, and the desire to be comfortable when they’re being mobile.

One enabler of transportation in urban areas is electric cars, which speaks to new products, like our new i3 and the i8 vehicles. But on the other hand, we think that connectivity, location-based services, and the rising penetration of smartphones will make the future a great enabler for a new set of services that will help customers to be more mobile.

We believed that we could combine our engineering know-how, products, great brand, and marketing with the agility and the drive and innovative ideas within startup companies. That’s why we created i Ventures and decided to invest in these companies.

X: You created the fund and chose its first investment in parallel. Why that strategy?

BB: When we started the plan for BMW i Ventures, we thought it was important to show our board and other people internally what we meant when we said we were going to invest in these new companies. So we had to very quickly focus on making the first investment.

We chose MyCityWay because it is a one-stop city portal. It goes way beyond classical concentric services, and provides a complete menu of city information. We were able to demonstrate immediately what the mission of BMW i Ventures is.

X: But the MyCityWay app was not designed to be used in a car. So why is it of interest to BMW?

BB: It’s an example of the scope we have for Project Mobility Services. Of course, mobility services will sometimes have to do with cars—that’s our home turf. But we’re convinced that the key to success of this new field is to take a strong view of the customer that does not have a car, but that lives in a big city and has a desire for mobility.

We think that also presents a much broader possible customer base. If you look at BMW, at the moment, our whole group sells 1.4 million cars a year. This number will of course grow, but that’s our current customer base. However if you look at all possible customers that deal with mobility questions in big cities, that number could be 10 or 20 times higher than we have now as actual BMW car customers. That’s one reason why we want to look definitively at services outside the car.

The other reason is that we are convinced that for the success of mobility services in the future, we have to provide platforms that are independent from the means of transportation.

X: You put out a call for business plans on BWM i Venture’s website. What are you looking for, and how has the response been?

BB: We have defined a framework. It consists of several fields that are of interest to us. One is city information in general. Another one is intermodal traffic solutions, which means giving people services to get them to point A or B however they’d like—driving, or car-sharing, or maybe walking. The third field is parking. The fourth field is smart navigation. And we’re also interested in car sharing. We’ve had a lot of responses. We’ve received more than 50 business plans so far.

X: What’s the vision for BMW’s New York incubator?

BB: The idea is not only to provide office space for startups, but also to help them with networking. And we can fertilize different combinations—products and services that might work together. MyCityWay, for example, could be a great basis to integrate with other services. We can also help companies with business plans, marketing, and communication. These are all things we can bring to the table as an investment partner.

X: Why New York?

BB: We’re convinced it’s the best place because of the support of the city. It’s a place where you can try out a mobility service. But we will be looking at companies all over the world, as well. We have a network of offices in Palo Alto, Tokyo, and China. We will use this network to support our investments.

X: How does this differ from corporate venture funds set up by other car companies?

BB: What we know from most other approaches is that they’re taking more of a workbench approach, investing in new technologies that can be engineered to go into cars. What we think is different in our case is we’re really focusing on mobility services—not on technology for cars. We’re looking at services in a more general way.

We will use every reasonable opportunity to link these services also to our cars. But our mindset and screening process starts with services that are not immediately related to cars.

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