Airbus Group lands at Silicon Valley to set up innovation center and VC fund

In a move to increase its international presence and capitalize on emerging technologies, the Airbus Group is set to establish an innovation center in Silicon Valley courtesy of its new venture capital fund, dubbed Airbus Group Ventures

Airbus Group Ventures is initially equipped with a $150 million fund that will be used to invest in "promising, disruptive and innovative" business opportunities.

The aerospace giant has roped in the best of expertise to run the new venture.

Tim Dombrowski, 54, former partner at venture capital firm Andreessen Horowitz, will be heading the new venture to oversee the initial investments of $150 million. Paul Eremenko, 35, a Google executive and a former U.S. aeronautics researcher will run the Airbus Group Silicon Valley technology and business innovation center. At Google, Eremenko oversaw the development of the company's project Ara modular smart phone.

In Reuters, Airbus Group Chief Executive Tom Enders was reported as saying that the center's creation would provide promising avenues for technology it might otherwise miss.

Experts are looking at this move as evidence that plane makers are wooing the technology players as their potential partners.

Recently, Enders took the company's top management team to California to see what lesson could be learned from the digital revolution. He was quoted as saying after his previous visit to Silicon Valley last year that the aerospace industry must work closely with high-tech companies- some of which, like Google, are encroaching on its turf through drone projects.

Even Boeing's Chief Executive Jim McNerney was reported as saying last year that it wanted it to be more like Apple in the way it innovates, rather than doing a "moonshot" development every 25 years.

Both plane makers have talked of the need to introduce improvements more quickly, without waiting for all-new plane developments that take years and cost around $15 billion.

Not just these two plane makers, but also other aero space investors were found showing interest and making efforts to set up their operation system in the Silicon Valley.

According to Fortune, Bessemer Venture Partners recently launched an aerospace investment practice in March to scout for innovative startups.

Similarly, California-based startups like Planet Labs and SpaceX have shown that NASA isn't the only entity pouring millions of dollars into aerospace research and development.

Fortune also reported that the new aerospace companies join a host of Bay Area startups like Matternet and Skycatch, which have been making names for themselves in the world of drones and unmanned aircraft.

"There's a lot of aerospace engineering talent now located in California that Airbus could perhaps tap into, as well as a number of interesting startups that the new fund might want to target," the report said.