Episode 61 Transcript: Woven Capital: Investing in the Future of Toyota

Molly Wood Voice-Over:

Welcome to Everybody in the Pool, the podcast where we dive deep into the innovative solutions and the brilliant minds who are tackling the climate crisis head-on. I'm Molly Wood.

This week we’re talking to an 800-million dollar gorilla in the startup funding game and a pretty big name in transportation, too. Woven Capital is an 800-million-dollar fund that was created to transform Toyota and hopefully by extension the rest of the transportation industry. Think, hydrogen, batteries, recycled manufacturing material, energy breakthroughs, bidirectional charging my favorite, I love this stuff. When it comes to sources of funding for startups, corporate money, known as corporate venture capital has become a really interesting pot of gold, as companies look for innovations to move them into a more sustainable future. Plus today’s guest just has a great origin story.

Nicole LeBlanc:

Long time listener, first time caller. So my name is Nicole LeBlanc. I'm originally from Canada and I am a partner with Woven Capital and we are the $800 million growth venture capital fund for Toyota. So we are investing in a number of sectors that basically support the growth and the future of Toyota.

Molly Wood:

Sweet! Amazing!

Molly Wood:

I'm going to start actually by asking you about the name woven capital. Now I know that there already is a corporate venture arm of Toyota called Toyota ventures. So that was clearly taken, but where did woven come from?

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Yes. Yes. So the original founder of Toyota, he actually grew up in a very inventor type household and his father was an inventor and he invented the first automated weaving machine in Japan. And so he then ceded his son the money to start his car company and he said, here you go son, follow your dreams. And so he started the company, you know, kind of from this inventor household, you know, and kind of the money that came from this invention. And then, as we think about the future of automotive, we're really in this transitionary period. And so how do we think about getting back to our roots and weaving the past with the future? And so that's where the name came from.

Molly Wood:

First of all, that's such a good name. And second, are you ever just so happy that you asked the question? Like, I'm delighted that this is where we started. That's amazing. We get a great name, great Toyota lore. Perfect. How did you end up there? What has been your path to doing this job? Because you're administering the first fund, right?

Nicole LeBlanc:

Yes, yes, yes, I love telling that story.

Nicole LeBlanc:

Yes, yes, yes. So the long story is my husband and I are both in the same town of 1 ,000 people on the East Coast of Canada. And now I live in a city that has a population larger than Canada. And so definitely, I am in Tokyo. Yes, yes, yes. Okay, great, great. And so like, there couldn't be, you know, a larger difference between sort of where I started and where I am now.

Molly Wood:

Right. We should clarify here. You're in Tokyo. We're like, yes, this is an amazing, this might be the furthest distance of any interview I've done.

Nicole LeBlanc:

I have a financial background, so I started out as a CPA. I worked at a chocolate factory, which was really fun. Really enjoyed that phase of my life. And then we moved because my husband was going back to school and I ended up in venture just sort of by accident, as most people sort of did, you know, kind of 20 years ago. And really kind of fell in love with entrepreneurship and inventors and, you know, a lot of like founders just really want to change the world.

And it's just really fun just being part of their journey and really hearing the stories. And I started at an early stage, so mainly seed investing. I worked for Alphabet, so really doing the smart and connected city project in Toronto called Sidewalk Labs. And that's really where I got into cities and sustainability and really just wanted to be able to see how I could affect people's lives on a more daily basis.

I moved to Copenhagen a few years ago, and so I was a partner with 2150, which is a climate fund there. And Woven's actually an investor in that fund. And so got to spend a lot of time with Woven during that. And George Kellerman, the managing partner here at Woven convinced me that I needed to move to Tokyo and be able to support Toyota and Woven in the goals that we have here. And it wasn't hard to convince me to move to Tokyo for this chapter of my life. It's very exciting. So I've been here a year and a half.

Molly Wood:

That's incredible. I feel like honestly, either of those offers are just an immediate yes. Like move to Copenhagen, move to Tokyo, either of them, no problem.

Nicole LeBlanc:

Yes. Yes. Yes. They were both in both cities are very different, but I really love living in them for very different reasons.

Molly Wood:

What, so these, these two funds exist. I just alluded to Toyota ventures, which people may be familiar with and woven is kind of the growth fund for people who are not necessarily familiar. Talk about the two entities and what the differences are.

Nicole LeBlanc:

Yes, Yes, so Toyota Ventures was started in 2016 and they are a seed in Series A, so early stage fund. They're writing smaller checks, bigger portfolios, and really trying to think about directionally what is interesting for Toyota, what should Toyota be thinking about over the next 10 years. And so they're investing in a wide variety of really interesting technologies at the early stage and really exploring. So if you go to their website, you see it says, we are explorers. And so they're really looking to think about, you know, what does the automotive industry, what does the mobility industry really need to think about, you know, as we kind of get into the next decade. And then we're the growth fund. So we kind of pick up where, you know, they leave off and we're really much more practical around like, what does Toyota need to do over the next five years? And how can we really help business units now? think about innovation and collaborate with our portfolio of companies. And so what we do is we work directly with these business units. We understand the problems and the opportunities that they're looking to solve for. And then we go hunting for those technologies to be able to bring startups into their work now. And we're a big company and it takes years to really get into the workflow of some automotive processes. But we're able to really get those conversations going and get startups collaborating now to really be able to help move the needle in the right direction.

Molly Wood:

And then we should also say that another feature of a growth fund is its bigger checks. It's more mature companies that are further along in the, yeah.

Nicole LeBlanc:

Yes, yes, yes, yes. We rate anywhere from a 10 to $50 million check or sweet spots more in the 20 to $30 million range. And both of our funds are global. So we invest globally. We're looking for companies, doesn't matter where they are, to be able to provide the best opportunity for Toyota.

Molly Wood:

And then how much is sustainability part of the thesis? That's obviously sort of the core of the transition in the automotive industry, but is it exclusive?

Nicole LeBlanc:

Yes. Yes, yes, it's very, very, it's very, very important. And so I'm personally interested in it. And that's one of the reasons I came here is how am I going to be able to help Toyota achieve their goals? We have a chief sustainability officer at Toyota. She's based here in Tokyo and we meet with her fairly regularly and we're really able to understand, you know, what the goals are, you know, how Toyota is, you know, kind of like working to achieve those. And we've made a number of investments to support that, as has Toyota Ventures. They actually have two funds, so they have kind of a frontier fund that's focused on climate and really trying to think about specific climate goals. And so both of us really feel there's an opportunity to work with external startups to really help Toyota be able to achieve those goals. There's the 2050 goals, but then there's a lot of interim goals as well. If you go to the website, Toyota's website, it talks about, you know, looking at having all of the manufacturing facilities net zero by 2035, and there's actually goals between now and 2030 so that we can progressively hit those.

Molly Wood:

Yeah, I would love to dig into some examples. Toyota is, you know, I think somewhat well known in the sustainability space for doubling down on hybrid technology and maybe not moving as quickly toward EVs, which I would love to ask to talk a little bit about that choice and how that inflects those investments. How do you see that evolution and is it at odds with the broader goals?

Nicole LeBlanc:

No, and so what's really important is like, you know, a lot of big corporates are very big ships and you can't move these ships very, very quickly. And so it's really about, you know, as an accountant having that financial background, I'm very practical and really trying to understand like, how do you retool or rebuild or build entirely new factories to really put together an EV line? It's a very different process. It has very different supply chains. It's a big undertaking to do that. And that's going to take time.

And in addition to that, there's a lot of things outside the control of the automaker with regards to charging infrastructure, regulatory, the utilities are also another big ship that needs to be able to move and none of these things move quickly. And so how do you actually think about what are the interim steps? So it's very, it's like, here's the ultimate goal. And I think a lot of automakers have that same goal, but how do you practically get there in a way that, you know, consumers feel confident, there's a lot of range anxiety. What if you live in a rural area and you're the only one with an EV or there's very few EVs? I was reading a stat the other day that in some US states, there's less than 1000 EVs in the entire state. And so your ability to be able to, even if you wanted to purchase an EV, there's a real inhibitor there. And so hybrids are a really great interim step to be able to do that. And it depends on your driving.

Molly Wood:

wow.

Nicole LeBlanc:

location and your driving habits, but the majority of the time people are using the battery, not the gas. And so your gas bills for anybody out there that drives a hybrid, you know your gas bill has gone down significantly once you've adopted or switched to a hybrid. And so it's a really great way to stair step is a term I use quite a bit into the ultimate goal in the end.

Molly Wood:

Yep, totally. And then I think it is easy to focus probably only on the vehicles. And obviously Toyota does so much more of that. And there's a huge manufacturing component to this. So how specific can you get in terms of investments and the areas that you think are interesting and that actually really do move the needle for a company of this size that maybe aren't so much about the car? You know?

Nicole LeBlanc:

Thank you.

Nicole LeBlanc:

Mm -hmm. Mm -hmm.

Nicole LeBlanc:

So yes, yes. So we have three kind of core pillars that we look at. The first is electrification, which I think is pretty straightforward, really thinking about batteries. We're thinking about circularity, because it's not just about creating and enabling EVs. It's also about what do you do with the batteries and how do you have circularity in manufacturing. So that's a core component.

The other one is intelligence. So really thinking about software. So software can really enable efficiencies, updates, but it can also enable climate related goals. And then the last one is diversification. So how do we really think about new streams of revenue? How do we think about transitioning to a future of mobility where there might be alternative methods of transportation and what role can we play in that? So those are the three areas that we really think about.

There's two companies that I wanted to highlight, two investments that I made in the last year and a half. The first one is around hydrogen. So I don't know if you want to talk about hydrogen. And so one of the things, okay, great. And one of the things I love about being part of a corporate venture fund is, you know, I know a little bit about a lot of things. So I'm somewhat dangerous, but I have these teams of engineers that I can access. So before I joined Toyota, I really didn't know a lot.

Molly Wood:

I want to talk nonstop about hydrogen. Everybody in the pool.

Molly Wood:

Mm -hmm.

Nicole LeBlanc:

about hydrogen. Now I can speak at it at length and you know it's a great party trick but I've spent so much time with all the different hydrogen teams and understanding how they're approaching it and you know a lot of these teams have been together since the early 90s where we've been building these fuel cells and so we have a really great hydrogen fuel cell solution.

Molly Wood:

Right. Yeah. For people who don't haven't seen one on the road. I mean, like the Marai Toyota makes a real production hydrogen-powered vehicle that people drive. I see him in California all the time. Yeah.

Nicole LeBlanc:

Yes. Yeah, they're very cool. I've gone for drives in a few. And so we have a hydrogen fuel cell and we have the Mirai. We have a partnership for a long haul trucking version, a hydrogen powered kind of tractor trailer. But we also want to think about what other adjacent industries can we sell our fuel cell into? And so there's a number of different partnerships that are being explored. And an important one that was going on in Europe was in marine.

And so there's a company called Corvus Energy. They're based in Norway and that's where their main headquarters is, but they also have facilities in both Canada and the US on the West Coast. And what they do is they do batteries and hydrogen to produce zero emission marine vehicles. And so they work with a lot of shipbuilders who really want to have these net zero ships and they are able to provide batteries that can be battery backup for maybe the traditional industry. So kind of like these hybrids where it's about transitioning and then they have full battery solutions but then they also have a battery hydrogen solution. And so the Toyota team in Europe had been working with them for three years really helping customize our fuel cell so that it met the standards for safety in marine.

And so we were able to invest to really help that company grow and scale. And so that's an exciting company that we're working with. And a really interesting part of that is the fact that ports are going to play an important role in the future of scaling hydrogen. So a lot of countries are going to have to import their hydrogen. And so how can you actually deploy as much as possible of that in the port to accelerate the transition to the hydrogen economy? So you can use it in the, the port equipment, you can have a lot of trucks or ships where they're actually kind of coming and going through that point regularly so that they can refuel there every time. And so it's really an interesting investment for us to collaborate with the market leader in these zero emission shipping technologies to really think about how can we unlock this hydrogen economy.

Molly Wood:

Yeah, that's fascinating. I think, and this is a good place to point out that there that in the spirit of the show, every solution is necessary, that there are some things we will electrify and there are some things that hydrogen will be the right answer for. And frankly, one of those things might be cars like we don't we shouldn't assume we have crowned a winner yet with electric cars. Yeah.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Yes. Yes. And it's kind of like, you know, the industry generally and us included understand that trucking in particular, like some of these heavy industrial users are really where hydrogen is going to play the most impactful role. And that's where we're really trying to focus a lot of our time. But there's also alternatives like, you know, passenger vehicles that just enable the infrastructure, enable the conversation and whether or not they're at scale long term, they're an important part of the mix, even if it ends up being rather small.

Molly Wood:

Right. And then tell me about the second investment.

Nicole LeBlanc:

So the second one is more about the future of mobility. And so it really thinks about, you know, I'm 80 years old, I no longer drive. How can Toyota still meet a lot of my mobility needs? And so it's basically, it's called intuition robotics, and it's an AI companion for the elderly. And it can really help give people more mobility in their older lives. And it also helps reduce loneliness. So loneliness is, the Surgeon General came up with a report last year that it's like the new smoking, right? And it really can have like severe detrimental physical health effects to people.

And so they have a robot, she's stationary and her name is Ellie Q and you can speak to her. I have a bigger brand name one at home that I, from one of the big tech companies and her and I fight all the time. But this one, you can actually have a real conversation. She's very intuitive. She has a lot of empathy. She tells you jokes. She can ask you questions so you can actually record your history and so you can then share it with your family, stories about your prom, if it's your graduation time and things like that. But it can also remind me about my doctor's appointment, order me my ride share. The Toyota Mobility Foundation actually has a partnership with Meals on Wheels to basically provide that to the LAQ users in some states where they might not be able to, you know,

Molly Wood:

that's cool.

Nicole LeBlanc:

cook and take care of themselves. So it's just another service to basically help people stay connected to the community. And so it's a really exciting element and like a really good application of AI for good to really help people stay connected.

Molly Wood Voice-Over:

Time for a quick break. When we come back, we’ll talk about what how corporate venture can be a tricky balancing actm you want to fund startups that can move quickly, but you also have to get a big slow-moving company to adopt solutions before the startups die.

Molly Wood Voice-Over:

Welcome back to Everybody in the Pool. We’re talking with Nicole LeBlanc, a partner at Woven Capital, Toyota’s 800 million dollar growth investment fund about the dual challenge of finding innovations in mobility and transportation and keeping them alive long enough to actually implement their solutions.

Molly Wood:

Let's talk a little bit about corporate venture because I'm sort of, you know, I think this is a little bit lesser understood player in the capital stack, but it's becoming a bigger part of certainly sustainability investing. And it has this kind of I think sometimes there's, my question is, is there a dual mandate, right? How much does the company have to end up benefiting Toyota or developing new revenue streams for the existing company versus, and does, can that hinder growth in other areas where the company might've organically gone if Toyota wasn't there, you know, or if Woven wasn't their biggest investor?

Nicole LeBlanc:

Of course.

Nicole LeBlanc:

So I like to think we have the best of both worlds. So we're working with these highly scalable, exciting startups that are all looking to provide financial returns to their investors. And it's not just about making money, but a startup needs to make money in order to have longevity, in order to have impact. They really do need to figure out what that business growth model is. And then I have this amazing kind of corporate that I can collaborate with that can really have impact. So the startup brings speed and then we bring scale. And so I really like to be able to see those two things kind of melded together.

And so, like I said earlier, I know a little bit about a lot of things and so spending time with all of these business units enables me to really understand what they're working on. And because we also talk to startups, you know, we talked to over a thousand startups a year on our team, we're able to say, you know, hydrogen or the future of mobility or batteries. Well, I talked to 10 companies last month and here's what's going on in the market. And so these engineers and these people that are in charge of these products are able to then kind of marry the two and say, okay, well, this is what we want to do. And this is interesting that this is what's going on in the market. Let's figure out how to bring these two things together.

Molly Wood:

Right. And it's risk reduction on some level, right? You're less likely to be disrupted by something you didn't see coming if you have a team whose entire job is to see everything that's coming and pick the best of it and invest.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Mm -hmm.

Mm -hmm. Mm -hmm. Mm -hmm. Mm -hmm. Mm -hmm. Yes. And like, we're a big company, and most big companies have a lot of restrictions. You have, you know, legal, and you have HR, and you have safety and certifications. And so that's why it does take a long time. And so that's why corporates are somewhat, you know, often kind of accused of taking too long.

But, you know, we have customers, and we have quality and safety and reliability concerns that we need to make sure that we're adhering to. Like, we have a reputation, and we need to make sure that whatever technologies are implemented, that they're properly tested and that they're able to meet that standard. And so, I would say that's the biggest challenge is, I kind of think like we're a little bit of like, this time traveler where startups think in weeks and corporates think in years. And so how do we basically bring those two worlds together through this world of corporate VC?

Molly Wood:

I mean, that was 100 % my next question is like, how do you? Because is it, I mean, you haven't been there that long, but I would imagine there will come a time where you're like, this technology exists. It's a game changer, but we won't be able to integrate it for maybe such a long period of time that the company actually, the startup suffers monetarily.

Nicole LeBlanc:

Yes, yes.

Nicole LeBlanc:

Yes, it's the hardest thing about our job. I would say that, you know, starting with pilots, and then you need to make sure you don't end up in pilot purgatory so that you keep going and going and going. In Europe, we have a really great program called Toyota Open Labs. And what we've done is there's six different business units that have all mapped out those problem sets and what they're looking for.

Then we went out to the market and said, here's our problems, who can help solve them? And then we brought companies in, we ended up with six pilots that we went forward with. All of these business units had budgets and timelines and it was already an existing problem. They had leadership buy -in and so it was a really great way to bring these startups in with certainty and understanding of what they were getting into. And it still will take longer to truly get to scale, but being able to continually have clear milestones and achievements each quarter or each year to be able to manage that with the startups and then continually give them more revenue or help them generate more revenue through our partnership is really the most effective way to do it.

Molly Wood:

And then what are the benefits of being at a corporate and working at the scale you're working at? Because there are other funds that are $800 million. It's not necessarily that the fund, I mean, there aren't that many, but speak to the good side of what you can accomplish and why you would make this move.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Mm -hmm. Yes.

Nicole LeBlanc:

So it's really just having that logo behind you to be able to have that scale. And like I said earlier, spending time with these engineers and just the knowledge that they have, I'm able to really get into the details and get it firsthand. This is a problem or this is not a problem. Often I'll see a startup and this is amazing, I love it. And then I go and they're like, no, that's just never going to work for these five reasons. And then you can give that feedback to the startup and say, this is what my engineer said.

I don't know if other customers of yours will have the same issues, but these are the issues we have. Can you adjust or can you address these or is this something unique to us? And so just being able to have that real time data that's very detailed and very useful really is able to kind of have that relationship with the startup and give them that knowledge. It's really, to me, it's exciting.

Molly Wood:

Where does the money for this fund come from? Are there external LPs or is it all Toyota money? Wow. And then tell me more about the sustainability needs that you've started to identify. To the extent that you can say, what are some of the solutions that you have been able to fund or are looking for?

Nicole LeBlanc:

No, it's just Toyota. Yep. Yep.

Nicole LeBlanc:

So we have made, I would say about half of our portfolio would be deemed a climate type investment. Not all of them have closed yet or we haven't announced them yet. So Corvus is the first one. So that's in the hydrogen space. And we're actively working with our hydrogen teams to understand, you know, what are the other hydrogen investments that we can make up and down that value chain. So thinking about things around the manufacturing of the fuel cells. So we've been doing this, you know, for, you know, over 30 years.

Molly Wood:

Yep.

Nicole LeBlanc:

However, there's a lot of new methods out there and there's startups that are doing that. So there's a number of companies that are currently working with us that we've been able to introduce. Or if they were already working together, we're able to kind of come in and say, this is something of interest and maybe help accelerate that process because then the business unit knows that there's another Toyota group interested and it might be something that can move faster or have a broader collaboration.

So hydrogen is definitely an area we're looking at. The other one is batteries. So also thinking about how do we, similar to hydrogen, how do we improve our battery manufacturing process? So we've looked at a few of those companies. We haven't been able to invest in any, just wasn't the right timing or just the right solution, but we're continuing to look at that. Circularity is one. So definitely as we think about how do we make all of our manufacturing processes circular is an area that we're really thinking about.

So right now, looking at a couple of companies. We've got some that are in the process of closing that are around recycling for different components of the car. So stay tuned. Those will be announced in the coming months. But that's definitely an area, particularly in Europe, because Europe has much more stringent regulations. And we actually have 2040 goals for Europe versus 2050 goals for other geographies within the Toyota family. And that's really interesting.

We do look to Europe as an early adopter for some of these technologies because they have the stick, not the carrot. And so the stick is forcing us to be able to make some of those changes faster. The carrot is great and it motivates people, but the stick doesn't go away very typically. So Europe is very good at that. So we do look to that European market to signal where we think the rest of the world will go and then we're looking at electrification. So really thinking about vehicle to grid. So right now it's just V1G and smart charging and it's exciting and it's, you know, the, you know, EV sales are, you know, continuing to grow, maybe not at the scale that we thought, but they will continue to grow. And most OEMs still have, you know, very clear targets, 30, 40, 50 % of sales in the coming years.

Nicole LeBlanc:

And as we think about transitioning to bi -directional charging, which I think most OEMs have committed to by 2026 -27, that will actually change the business model because you actually have the ability to integrate these two big industries, utilities and automotive together. So this is really like a once in a generational change for these two industries. And so we're really trying to think about, you know, what role should and can we play in that? And should we be collaborating with some of these other industries around that? So that's an area that we're spending a lot of time in as well.

Molly Wood:

I am just so thrilled that you said that because I am obsessed with bi -directional charging and the idea of this kind of decentralized power distribution and generation potentially. And I do really wonder like how long is it going to be before an OEM and a utility have a merger? Yeah.

Nicole LeBlanc:

This is... this is...

Nicole LeBlanc:

Yes, yes. It's really exciting to think about because we can't just keep upping rates and you know now that we have an investment. Yes.

Molly Wood:

Right. And what we mean, maybe I should do a quick definition before we get too excited about it. What I mean, and listeners to the show will have heard me nerd out about this many times before, but this is the idea that instead of just your house or your apartment building or your charging station, well, your house or your apartment building charging your car, you return some of that power to the house, right? Like that was a big selling point for the Ford Lightning. It can charge your house if the power goes. It can keep the lights on when the power goes out. It can act as a battery wall.

Nicole LeBlanc:

Yes.

Molly Wood:

And so that's what we mean. And then there's an idea that you might be able to sell some of the stored energy in your vehicle back to the grid or use it in emergencies and things like that. It just changes the mix. Yeah. OK, I'll stop because you answer now. I'm like, and?

Nicole LeBlanc:

Yes.

Nicole LeBlanc:

Yes, yes. Yes, so we're really excited to see. Yes, and there's still a lot of uncertainty about where that market's going to go, and it'll be different by geography. So the US has more than 3 ,000 utilities. Japan has less than 10. And so the way that OEMs and kind of car, like VVs are gonna interact with utilities will be very different in those two countries. And then Europe is different as well because of the high costs, because a lot of the geopolitical issues going on right now, costs are sometimes 4X for some consumers in Europe. And so in Europe, it's a lot about reducing the costs. In the US, it's more about grid resilience. And so as kind of an OEM who will have this kind of electrified computer driving around or sitting in your garage, you know, how do you actually really think about taking advantage of that? So that's an area that I'm really interested in exploring because I really do think it unlocks a whole other, a different type of relationship with your car than you had before.

Molly Wood:

Right, it's a completely different resource. And do you see that as primarily sort of like a software question? Is it almost like a power management question? Yeah.

Nicole LeBlanc:

Yes, yes. Yes, for the most part, I think, you know, like the charging solutions and things like that, like they're fairly established now and more mature. And there's startups that are doing interesting things, but the software is really where everything is going to be enabled.

Molly Wood:

And then which are the ones that really have to sort of result in innovation? You know, like, is it, if you hear a.. there's a lot of compliance software out there, but I would imagine that's not a big part of what you're looking for or looking to write checks for. Are there specific regulations like circularity? Are there any others like that that are just like, OK, we're going to need a new thing for that? Get the checkbook out.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Mm -hmm.

Nicole LeBlanc:

Yeah, definitely materials. So definitely helping the groups think about new materials. The other one is around energy usage, right? And so helping people understand, you know, energy and water usage for some of the manufacturing facilities. So there's some actual experiments with hydrogen around some of these like high energy bursts and need for, for some of those materials and then battery backup or hydrogen backup for, you know, because those things also have to be in place. We've been thinking a lot about that and then post -sale. So the other thing that happens is if you have to recycle and have circularity in your materials, where are all the Toyotas from 10 years ago? And how do you get them back? And how do you figure out how to disassemble them and then recycle those components? So those are all because there's a whole secondary car market.

Molly Wood:

And is that because of the circular requirements or is that because of things like extended producer responsibility or both? Yeah. Yep. So it becomes Toyota's job to go find all those vehicles and yeah.

Nicole LeBlanc:

Mm -hmm. A little bit of both. Both. Yeah. A little bit of both. Yeah. Yeah.

Yeah, you think about this, this discussion has been happening in packaging, right? Like with your shampoo bottles or things like that, having the original equipment manufacturer or the original producer be responsible for the recycling component. And it's really just kind of extending into, you know, a lot of industries.

Molly Wood:

Yep. Yeah, that sounds like a large logistical challenge that we could also spend quite a lot of time on. If you could, I know you're not early stage, so this is probably not how you think of this, but still, if you could spin up, like, do you have a dream startup in mind? Are you just like, look, I have my checkbook for this thing if I could just find the right one. I mean, it certainly, it sounds like you're doing a lot of hunting in the battery space.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Yes. Yes. Mm -hmm. Mm -hmm. Mm -hmm.

Nicole LeBlanc:

So me personally, having that finance background, I do love anything that helps organize things. And so that's what I really like about these software plays that really help communicate and provide, so between utilities and between car drivers or anything to do with where industries have to intersect because that's really complicated. Because even though there may be big traditional industries like OEMs and utilities they operate very differently.

They have very different processes, very different timelines and goals. And so any kind of software that helps bring, you know, kind of two industries together, it's also like where the built environment, you know, meets, you know, mobility or, you know, those types of things. So like those are really complicated to be able to sort out. And that's where I really think, you know, software and AI will be able to really make a difference.

Molly Wood:

I love it. And I'm thrilled that you said that because I'm so tired of the holy war between the hard tech investors and the software investors because we need everybody in the pool. Yep.

Nicole LeBlanc:

Mm -hmm. Mm -hmm. Mm -hmm. Well, I always say, like, I like investing in hardware startups because it's something I can explain to my grandmother, right? Like, it's a physical something, and it's just easier to explain to a person as opposed to, you know, some nebulous software. So that's what I like. The challenge is...

Molly Wood:

Right. It's a robot.

Nicole LeBlanc:

that software is super easy to scale. There's not a lot of friction in the model. So the returns are higher, which is why so many VCs invest and kind of gravitate towards it. But hardware can have a huge impact and still provide the amount of returns if you get the unit economics right and you get the scale right.

Molly Wood:

Right. And that leads me actually to my last question, which is a little bit of a follow up on, does corporate venture broadly and Woven specifically operate within the kind of same time frame? Are you still on like a 10 year return path? And it sounds like that's probably helped along by that very specific market knowledge.

Nicole LeBlanc:

Yes, so CBC has many, many different models. There's kind of no one specific model. Some groups invest off the balance sheet and then they're able to write everything from a seed to a gross stage check. We've chosen to have kind of the two funds, so Toyota Ventures and us to be separate teams because they're different environments, different business models, like different ways of kind of assessing the company.

So having two separate teams kind of each in our lane is much more effective. And we've chosen to have separate funds, not balance sheets, so that we have very clear mandates. And that often balance sheet investors, depending on the nature of the economy, that money might want to be pulled back in to the HQ for something different. And so by enabling a separate fund, you're really enabling that long -term approach to kind of ensure that that team has the time to be able to execute. Because venture capital does take time. Startups take, I think, on average 11 years to kind of grow and exit. And so being able to make sure that the VC strategy has the time to be able to execute as important.

Molly Wood:

Cool, that's a good clarification that I'm glad we got in. Nicole LeBlanc, thank you so much for the time. I appreciate it.

Nicole LeBlanc:

Thanks, it was great to be here.

Molly Wood Voice-Over:

That's it for this episode of Everybody in the Pool. Thank you so much for listening and for indulging me in yet another conversation about bidirectional charging, my favorite topic. I never claimed I was not a giant nerd. If you want to get alerted whenever there’s a new episode of the podcast plus get a little additional context resources and the occasional EV buying guide, I’m still not sold on hybrids no matter what Toyota thinks. Subscribe the newsletter at everybody in the pool dot com. While you’re there you can find transcripts of all our episodes and if you’d like to support the show directly and get an ad-free version. Hit the link in the description in your podcast app of choice.

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