UP.Partners Closes $230 Million Future Mobility Fund

Seeking to enable future methods of mobility both in the air and on the ground, UP.Partners has closed its venture capital fund after raising $230 million. Investors include Alaska Air Group, Toyota Motor subsidiary Woven Planet Group’s Woven Capital, Standard Industries, Hillwood, OSM Maritime, and others.

While UP.Partners is looking for additional investment opportunities, it has already helped to fund such businesses as eVTOL developer Beta Technologies, drone autonomy company Skydio, and UnitX, a manufacturing quality assurance provider.

Co-founded by Ben Marcus and Cyrus Sigari, UP.Partners is also led by Adam Grosser, co-managing partner, and Ally Warson, principal. Marcus and Sigari founded aircraft broker jetAviva in 2006 and drone and advanced air mobility (AAM) air traffic management platform AirMap in 2014. Grosser is a long-time engineer, start-up founder, and investor in companies such as ForeFlight, Tesla, Solar City, EnerNoc, Control4, and Silver Spring Networks. Warson formerly was an associate at Acme Capital. Other UP.Partners venture members include Brian McClendon, co-creator of Google Earth, former Activision CEO Eric Hirshberg, and Uma Subramanian, co-founder and CEO of charter broker Aero.

“We’ve been deploying capital for about the last 15 months,” Grosser told FutureFlight. So far, the fund has invested in 11 companies, “with several more in process. We are extra excited about all things that fly, but this is really about mobility.”

The portfolio companies funded by UP.Partners range from early-stage start-ups with no revenues to late-stage product-focused businesses that are growing revenues rapidly, according to Marcus. “That’s the nature of a venture fund,” he said, adding that the focus on the mobility sector offers an advantage: “Because it’s sector-focused, we can find synergies in the portfolio.” This will help advance the future of transportation, he explained.

Although $230 million doesn’t sound like a lot of money when compared with the assets of some venture capital funds, “it’s the right number,” said Grosser. “To do early-stage venture capital well, you need enough to build a dynamic portfolio, and not too much of that focused on the wrong part of the market. This is a great number. It’s enough money to be impactful for the 24- to 26-month capital deployment cycle and not to deploy it outside the area of focus. It harmonizes us with the companies we’re seeking.”

What this means in practical terms is that UP.Partners makes early-stage Series A and C investments of $2 million and more in promising companies. “We typically write $2 million to $7 million, with other investors participating,” Marcus said. “Then they go on to raise subsequent rounds. We’re building a portfolio of something like 30 companies.”

What Marcus and Grosser are looking for in potential investments "comes from us scouring the globe for great entrepreneurs and companies consonant with our thesis,” Marcus said. “We do a lot of primary research. In the last 15 months, we’ve reviewed 1,400 companies and made 11 investments. We’re right on track.”

Marcus is focusing on mobility prospects, among them those in the hydrogen space, he said. “And where and how that might fit in a variety of transportation subsectors and what segments are appropriate for investment. We’re looking at an interesting array of key enabling technologies for multidimensional mobility.” These include advancements in aviation, maritime shipping, ground transport, autonomy sensors, methods of electrification, and more efficient electric vehicle charging technology. They also include products such as drones used to help manage warehouse inventory and computer vision and artificial intelligence used to identify defects as parts come off assembly lines, a UnitX development.

Although UP.Partners is investing in a variety of technology start-ups, they all relate to mobility in some form, whether it’s more efficient parts manufacturing as with UnitX or even navigation. One company that Marcus is working with—Point One Navigation—has designed a software-defined solution that makes GPS far more accurate than even an inertial measurement system with a fiber-optic gyro, according to Grosser. “This will be used by the major automobile manufacturers,” he said. “It’s an example of helping find things that are better, cheaper, and faster.”

But AAM remains a focus for UP.Partners. “We have a definite perspective on the likely advancement of advanced air mobility,” Marcus said. “We believe strongly that people are going to benefit from flight in a much more robust way than today.” Only 20 percent of the planet’s population has traveled on an aircraft, and UP.Partners believes that can grow to 80 percent in the next 20 years. “It’s not all eVTOLS in New York City,” he explained. “That will happen, but there are myriad use cases for these sustainable, highly automated technologies.”

“We have large corporate partners,” Grosser concluded. “There is nobody else that has the pedigree in engineering and aviation that our team does. We are enjoying a crush of opportunities.”