Japanese car parts maker Denso shuts corporate venturing arm

Denso, the Japanese automotive components manufacturer, has shut down its corporate investment arm after tough financial conditions lowered sales performance across the business.

Tony Cannestra, who led the venturing unit during its 11 years, has left the company as part of the cutbacks. The investment unit, based in the Bay Area in California, had seven startups remaining in its investment portfolio, which will now be managed by different business units of Denso.

Denso’s ventures team recently had two successful exits for portfolio companies, including edge AI company Blaize, which listed on the Nasdaq exchange in January through a special purpose acquisition company (SPAC) and Canatu, a Finnish maker of advanced carbon nanotubes, which listed on Nasdaq Finland last year, also via a SPAC.

However, revenues at the broader Denso Corporation saw decreases in the past year, due in part to lower vehicle production volumes in Asia and suspensions of operations by Japanese customers. The components company, which supplies carmakers such as Toyota, slashed its full-year profits forecast by 21% in October and has made a series of cutbacks at the company, as well as starting a share buy-back programme.

The corporate investment arm had already been less active in recent years, GCV understands, with Denso less willing to give the green light for proposed investments.

The team, which tended to back companies at the early stage, from seed to series B, invested from the corporate balance sheet and was unusual among CVC units to have a mandate focused only on bringing strategic benefits to the parent corporation, with very few financial targets.