GM Investing In Steel Startup Firm

General Motors Co.'s $100 million venture capital arm said on August 5 it is investing in a Rhode Island startup steel company working to create lightweight materials for vehicles and other uses.

GM Ventures LLC said it is making an undisclosed investment in NanoSteel Co, a Providence, RI-based firm, joining shareholders EnerTech Capital and Fairhaven Capital Partners and five existing investors to complete the Series C financing round. Terms of the GM Ventures investment were not disclosed.

NanoSteel has thirty-four employees and is still in steel production trials, said Greg Nixon, Spokesman. It has a research and development center in Idaho Falls, ID.

"We are investing in NanoSteel because of the opportunity associated with their new steel alloy technology," said Jon Lauckner, GM's Chief Technology Officer, Vice President of Global Research and Development, and President of GM Ventures LLC. "Over the next several years, light-weighting of vehicles will be a major focus area to improve fuel economy. NanoSteel's nano-structured alloys offer unique material characteristics that are not available today, making them a potential game-changer."

Through the development of patented alloys, NanoSteel has created a new class of steel that could allow automakers to reduce weight through the use of thinner, higher strength gauges while maintaining structural integrity needed for safety. NanoSteel's new steel design is an alternative to other light-weighting materials that may cost more, require new investment in parts production, and have performance limitations, GM said.

Reducing vehicle weight is one way automakers will achieve higher fuel efficiencies and meet new U.S. Corporate Average Fuel Economy standards. Requirements will nearly double to a fleetwide 54.5 mpg by 2025.

GM said it is "currently exploring equity investments in a number of auto-related technologies and business models."

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