NAVIcon returns to Used Car Week on Nov. 9. Who should attend?
“Anyone who has an interest in innovation around automotive technology,” said Steve Greenfield, CEO of Automotive Ventures, an early-stage venture capital firm focused on the automotive and mobility space.
NAVIcon — short for National Auto Venture & Investors Conference — is a partnership between Greenfield and Cherokee Media Group’s Used Car Week.
During the event, five early-stage automotive tech startups will pitch to attendees. Three judges then vote on the winner. The audience also votes. The combined score determines the winner.
Startup founders pitching this year include Jimmy Douglas, founder of online used EV wholesale marketplace Plug; Eric Lyman, co-founder of Remarkit, which helps lessors and automakers determine optimal residual value for better product development and risk management; and Chris Tosswill, co-founder and CEO of automated real estate marketing startup Addressablemail.com.
Early stage refers to companies that have only reached Series A in fundraising.
Last year’s winner was Jim Roche, co-founder and CEO of Warrcloud, which automates warranty claims. Automotive Ventures is now an investor in Warrcloud.
The conference also includes Q&A sessions with Cargurus CEO Jason Trevisan and the CarDealershipGuy, a car dealer and mystery commentator on the automotive market.
FOMO for dealers
Rising interest rates and recession fears have put a damper on the venture capital market in the last year, said Greenfield. So, while there are plenty of companies that need investment, and no lack of interest in starting a company in the auto retail technology space, “it is a harder environment to raise money for companies,” he said.
Valuations are down and investors are more cautious with their money, said Greenfield. The initial public offering market is “basically shut,” and it is harder for late-stage investors to get liquidity. That has had a domino effect on early-stage investment, he said.
However, “we never hit a recession and now we have a line of sight (that looks like) the Fed probably isn’t going to raise rates anymore,” said Greenfield. That may quicken the investment pace, he said.
One group of investors is clearly interested in finding innovative companies with relevant technology — dealerships. They have the funds.
“Dealers are coming off the most profitable three years in their history,” said Greenfield. “There is a keen interest in putting the money to work.”
That was made abundantly clear in the recent Series A $4 million financing round announced by Orbee, Inc., a software platform that helps dealers measure omnichannel marketing effectiveness as well as manage omnichannel marketing.
Among the new strategic investors were Mills Automotive Group and Qvale Auto Group. Existing investors included Holman Enterprises, Flow Automotive Companies and Pohanka Automotive Group.
To be sure, the number of dealership groups actually investing in early-stage startups is still small, said Greenfield. He predicts that will grow as they read of deals such as the Orbee investment.
“Other dealers will say, ‘I didn’t even know (such an investment) was an option,” he said. As they hear other dealers talk about investments in startups, “there is a fear of missing out.”
There definitely will be dealers among the attendees at this year’s NAVIcon, said Greenfield. For the start-ups, that creates a funding opportunity.
“The pressure is on for these companies to pitch in such a way that their pitch resonates with these dealers,” he said.