Fund Profile: NAV.VC Looks to the Future

Blog
August 10, 2015

NAV.VC (formerly New Atlantic Ventures) is a seed and early-stage venture capital firm based in Reston, Va. and Cambridge, Mass. The firm invests nationally in technology businesses with a “big idea” in high-growth, emerging mass markets. With current capital of $275 million under management, NAV has collectively helped entrepreneurs start more than 100 companies. The firm’s current portfolio includes investments in over 40 different companies, including Invincea, Bambeco, QuadLearning, Moda Operandi, Atlas Obscura, YieldBot, Truveris, and Qliance.

The industries that New Atlantic Ventures is most interested in investing in include:

  1. The Business Side of Healthcare|Healthcare is a $2.6 trillion industry, representing one-sixth of the US economy. Payers, whether they are individuals, businesses, or the government, continuously want increased value coupled with lower costs. The only way to provide this is through unique innovations that change the way we interact with our personal physicians. NAV is interested in how doctors can use technology to be more efficient and coordinate care more effectively.
  2. Higher Education| With the increasing cost of tuition, there is currently more student loan debt outstanding than there is credit card debt in the United States. Second tier private colleges/universities are faced with a life threatening value crisis.  Online courses will ultimately lower educational costs, while helping to augment classroom learning. NAV is interested in companies that address the place where the college campus meets online courses. The opportunities to leverage technology in the $1 trillion education industry are limitless.
  3. Cybersecurity | Cyber theft, which did not even exist a few decades ago, now exceeds the value of the global drug trade. Governments are using cyber technologies as offensive weapons. According to John Backus, co-founder and managing partner of NAV, conventional warfare is turning from “bullets and bombs to bits and bytes.” NAV is interested in businesses that have the potential to help individuals, businesses, and governments play offense and defense in this digital war.
  4. E-Commerce| While the volume of e-commerce has been steadily growing, online shopping sales are still less than 10% of total retail sales in the U.S. This shows that there is plenty of room for growth. NAV is interested in the evolution of e-commerce as it begins to serve regulated products (medications, alcohol, etc.), complex products (services), custom products (Etsy, 3-D printers, etc.), and high-end products (e.g., dresses straight off the runway) – all online.
  5. AutonomousTechnologies |This deals with self-moving technology such as cars, drones, and aircraft. Companies such as Google and Uber are currently working on and testing such technologies. NAV looks ahead to the future and sees the potential for autonomous objects/vehicles to be the next mass market in as little as 10-15 years.

Potential investees for NAV must have an original idea, a team that can pull it off, some domain experience, and must be on a venture scale ($100 million in revenue in five to seven years).NAV makes about five investments annually, with five full-time partners each typically investing in one company a year. The firm has made around 10-11 investments in the last two years. Roughly half of these were seed rounds with convertible debt and the other half were Series A rounds with priced equity.  NAV’s share of a seed investment is typically in the $250K range and its share of a Series A round is typically in the $1M range.

NAV continues to support its portfolio companies with additional funds alongside other co-investors as companies make progress. NAV has an average holding period of eight to nine years from the first dollar of investment to the moment the company goes public or is acquired. The firm likes to co-invest with other VCs to help to reduce risk and increase efficiency.  Investing partners fully devote their time and energy into any company they buy into. NAV finds its friends, partners, and industry colleagues to be their most valuable resources. The firm’s development of a “value-added” network is a powerful resource that they use in their efforts to help their portfolio companies succeed.