Kyoto Startup Digest 2018 – GLMKyoto Startup Digest 2018 – GLM
Kyoto Startup Digest 2018 is documenting the Kyoto startup scene through a series of articles and videos by the following members of the KYOTO Design Lab and interns from the University of Texas.
The Future of Electric Vehicles
From university research to commercialization, GLM hit a milestone that many electric car companies failed to meet with their luxurious electric vehicles. GLM is an automotive company based in Kyoto, developing the next-generation of electric vehicles and pushing technological boundaries. Utilizing their own research, GLM is committed to creating every aspect of their vehicles from scratch. Although considered a niche electric car company, GLM has impressively become the first automotive company to emerge from Japan in the last half-century. Most of GLM’s revenue comes from providing services to third-party companies looking to venture into the EV industry.
The sports car maker stemmed out of the Kyoto Electric Car Project at Kyoto University, dating back to 2006. Representative director and president, Hiroyasu Koma was involved in the project while in graduate school where he decided to spin out and launched GLM in April 2010. During its early stages, GLM got financial support from former Sony CEO Nobuyuki Idei, earning them instant credibility in the industrial world. In 2017, GLM was acquired in a share swap by O WE Solutions in Hong Kong.
While GLM has the technological know-how to produce their own electric vehicles, they support others companies in the automotive industry by providing their expertise through their GLM platform which include the chassis, power systems, and vehicle control units (all of which are customizable).
Creating a simple concept vehicle is not entirely difficult since regulations do not have to be met. Yet GLM proceeded to receive certifications from the Ministry of Transportation in Japan in 2014, making them the first startup company to acquire domestic licensing for an electric sports car. This milestone proved GLM could design and produce more than simple concept cars but luxurious vehicles that complied with all road regulations. In August 2014, GLM released an electric version of the Tommykaira ZZ, a sports car developed in Kyoto that received much acclaim due to its high performance. The second generation vehicle, ZZ-EV, introduced the GLM chassis platform. GLM then showcased the EV supercar GLM G-4 at the Salon Mondial de I’Automobile in Paris in 2016, further increasing their visibility to the world.
The automotive industry is small, so having a network of strong alliances is crucial for survival. GLM was create their own network with over 100 technology partnerships across sectors. Despite the young age of the startup, GLM’s direct alliances demonstrated that they were indeed credible enough to work with. As they continue to develop breakthrough technologies, GLM hopes to establish partnerships that will prove “ludicrous ideas” are just as synonymous to “innovative ideas.” Working to facilitate more concepts to reality, GLM continues to push technological boundaries while operating under one principle: “where unfathomable is possible.”
We spoke with GLM’s Chief Financial Officer, Sota Nagano, who introduced us to the innovative company’s platform. We discussed their current success and future prospects for the company.
What was the initial idea behind the foundation of GLM?
Nagano: There are a lot of electronics companies based in Kyoto, so we wanted to consolidate what they had to offer. When it comes to an electric vehicle platform, the power plant package has to be standardized, you can’t mix and match. We had a need for these companies so why not work together? It makes it easier for development than working with companies from different regions.
What was the intended goal for GLM at the beginning? Was there a high barrier of entry?
Nagano: Yes, there was a high barrier entry. If you look around the world, there are many automotive companies with an ample number of suppliers. At least here in Japan, those companies are worth trillions of dollars. Our focus was not to go head to head with them but to create a product that optimizes what is technologically possible at this point and appeals to the first adopters. We introduced the our first vehicle in 2013 which was created from scratch, that put us on the map of Japanese automotive companies.
What was the intended market at this time?
Nagano: If it was just for the money, then we wouldn’t have started in the manufacturing business because it’s so resource exhaustive. There are less regulations and it’s easier to mobilize the resources. We love cars and we wanted to come up with something spectacular, that’s why we did cars. After we introduced these cars, it allowed us to get more funding, but at the same time, doing a limited series production car and making it more economically viable is a challenge. When we introduced the ZZ, we didn’t make a huge amount of money but that also allowed us to get more projects that ended up sustaining our business as a whole.
GLM received the certification from the Ministry of Transportation in Japan. Can you explain the details of this milestone?
Nagano: We received the certification in 2014. Making a concept car is really easy, you don’t have to comply with any regulations. Getting the certification is not about passing one standard, you need to comply with list of safety regulations like seat belt strength, driver visibility, absorption of impact, etc. So designing a vehicle that meets all these requirements and is an appealing looking car is difficult. This milestone has enabled us to obtain solid partnerships that allow us to outsource all the components that make our products exceptional.
Can you describe GLM’s funding leading up to the exit?
Nagano: The seed stage is where we got support from the former CEO of Sony. It wasn’t just the funding that helped but the credibility we gained in the industrial world. We then proceeded to do a series A that was completed in November of 2013. Our Series B round was completed July 2015 where we received funds from domestic and international corporations. We wanted to continue to push technological boundaries which also meant we had to remain private, pushing us to look into long term investments strategies. That was when I struck a deal with the Saudi Arabia fund called RVC. Since then we have also received funds from investors and Southeast Asia tycoons.
Can you describe the “GLM Ecosystem” and its general importance in moving forward?
Nagano: After the release of the Tommy Kaira ZZ, GLM was able to build The GLM Ecosystem, a network over 100 firms in across industries, and it definitely jump started our development. I guess it’s the same way everywhere, if you don’t have credibility then doors won’t even open, so having these partnership proves that even though we were a young startup, we are credible enough to work with. It opened up a lot of doors even outside of the Kyoto supplier network. Having this network doesn’t mean you can pay money and use their components, you have to be accredited and develop a system and software around it, because there is design and architecture that goes into a project, we had instant access from day one which was a major deal.
Check out GLM here