Home Venture Capital UP.Partners’ Ben Marcus on investing in transportation tech—and why Boeing is disruptable

UP.Partners’ Ben Marcus on investing in transportation tech—and why Boeing is disruptable

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In Ben Marcus’ two-seater GameBird airplane, we were offshore of Palos Verdes, negatively weighted, where the Earth’s gravity falls on your head rather than your spine. Marcus, UP.Partners cofounder and managing partner, had agreed to take me up in the aerobatic plane. (Yes, aerobatics means precisely what you think it means.)

We did a bunch of rolls and loops in the air, which Marcus told me amounted to 4.3 Gs. I feel like I now understand phrases like “centrifugal force” and “weightlessness” not just intellectually but physically—you know that feeling, where a jugular physical rush pops the world into technicolor like in The Wizard of Oz? It’s like that. 

“It’s like a roller coaster, where you’re building the track yourself,” Marcus tells me once we’re back on the ground. This all connects together—Marcus’ UP.Partners invests in transportation tech, with a portfolio that includes Axiom Space, Skydio, Loft Dynamics, and Beyond Math. And aviation is part, though not all, of UP’s thesis. 

“Investing in aviation is very hard,” said Marcus. “Why? It’s hard because it’s a highly regulated industry, so entrepreneurs can’t really control their destiny. It’s capital-intensive, it requires a lot of human labor, a lot of materials, and so on… So, our strategy isn’t to invest in aviation companies per se, but we invest in transportation technology companies, making transportation for people and goods cleaner, faster, safer, better, on land, air, sea, and space.”

There’s a workaround—UP also has UP.Labs. Each year, the incubator launches two companies per corporate partner, and with three corporate partners right now (including Porsche and Alaska Airlines) it’s launching six companies a year. The idea is this: To bypass a lot of the regulatory and B2B challenges that come with founding a company in the transportation space. 

“I imagine a corporation with this big bucket of problems,” said UP.Labs president Katelyn Foley. “Some of them are going to get solved by R&D internal innovation activities—and some of them do get solved by a startup that’s out there.” 

And at UP.Labs, the idea is that the company starts close to its customer.  

“We cut the first five years of a startup’s life off,” said John Kuolt, UP.Labs founder and CEO. “[Outside of UP.Labs] you won’t find one startup that started a year ago, working with Porsche, with a multi-million dollar contract.” The goal, Kuolt says, is to make these “humongous billion-dollar companies operate more efficiently today.” 

The firm’s thesis applies to land, sea, and air, but after my experience in Marcus’ two-seater aerobatics plane left me floored, I was pretty stuck on aviation—especially given the turbulence currently rocking the sector as a result of Boeing’s scandals and harrowing safety concerns. Marcus thinks that, as impossible as it may seem, Boeing is disruptable. 

“It’s not just because of Boeing’s missteps,” he said. “I think there’s actually a lot of technology now that’s available that wasn’t there before, allowing smart, ambitious entrepreneurs to actually create a new aircraft. Airlines are demanding more fuel efficiency, less carbon emissions, and better passenger experiences. And the Boeing Airbus duopoly can only make small iterative changes, so I think there’s an opportunity for a startup to do that.”

Marcus says that the startup with the best shot at that is Long Beach, Calif.-based JetZero, which is revamping how plane bodies are built, focusing on a “blended wing.” The aircraft can “cut fuel burn and emissions by up to 50% compared to the tube and wing everybody flies today,” JetZero CEO Thomas O’Leary explained via email.

And a watershed moment is actually upon us—right now, we’re less than a year from electric planes, Marcus says.

“If you think back on the last 100 years, what’s marked the biggest shift for humanity––was it the semiconductor? Was it the Internet? Was it the airplane?” Marcus said. “It’s really hard to choose, but airplanes started connecting human beings with one another in important ways.”

It’s a good point—though I don’t know if I need to see the world upside down again from 3,500 feet to appreciate that perspective. But I kind of want to.

See you tomorrow,

Allie Garfinkle
Twitter:
@agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

Corelight, a San Francisco-based network detection and response platform for cybersecurity teams, raised $150 million in Series E funding. Accel led the round and was joined by Cisco Investments and CrowdStrike Falcon Fund.

EnviroSpark, an Atlanta, Ga.-based electric vehicle charging company, raised $50 million in funding from Basalt Infrastructure Partners

beehiiv, a New York City-based email newsletter platform, raised $33 million in Series B funding. NEA led the round and was joined by Sapphire Sport and others.

Anetac, a Los Altos, Calif.-based dynamic identity and security platform, raised $16 million in funding. Liberty Global led the round and was joined by Shield Capital, GP Ventures, and others. 

Backflip, Dallas, Texas-based platform designed to connect entrepreneurs with real estate investments, raised $15 million in Series A funding. FirstMark Capital led the round and was joined by existing investors Vertical Venture Partners, LiveOak Venture Partners, Revel Partners, ECMC, and others. 

Livara Health, a San Diego, Calif.-based musculoskeletal care platform, raised $15 million in Series B funding. A1 Health Ventures led the round and was joined by existing investors Polaris Partners, Providence Ventures, Martin Ventures, and others. 

Opmed.ai, a Boston, Mass.-based AI-powered operating room scheduling and management platform, raised $15 million in Series A funding. NFX and Grove Ventures led the round and were joined by Secret Chord Ventures and others. 

Remepy, a New York City-based developer of hybrid drugs that integrate digital molecules and are designed to improve drug effectiveness, raised $10 million in seed funding. NFX led the round and was joined by Vine Ventures, PsyMed Ventures, Supernode Ventures, Firstime Ventures, and others.

Monocle, a New York City-based AI-powered promotion deployment and personalization platform for consumer brands, raised $7.5M in a seed round. F2 Venture Capital led the round and was joined by Tiferes Ventures, irrvrntVC, and others.

Apex, a Tel Aviv, Israel-based AI security platform, raised $7 million in seed funding. Sequoia Capital and Index Ventures led the round and were joined by angel investors. 

Piction Health, a Boston, Mass.-based virtual dermatology clinic, raised $6 million from Flare Capital, Techstars, Argon Ventures, Good Growth Capital, Bayless Healthcare, and others. 

Ceartas DMCA, a Dublin, Ireland-based provider of AI-powered brand protection and anti-piracy services for content creators and brands, raised $4.5 million in funding. Earlybird Venture Capital led the round and was joined by Upside VC and angel investors. 

Insane Cyber, a San Antonio, Texas-based industrial cybersecurity platform, raised $4.2 million in funding. Paladin Capital Group led the round and was joined by Cyber Mentor Fund and others. 

PRIVATE EQUITY

EQT Partners agreed to acquire WSO2, a Santa Clara, Calif.-based provider of application development and identity and access management software. Financial terms were not disclosed. 

Hypax acquired Precision Colour Printing, a Telford, U.K.-based provider of commercial printing services to businesses, in a carve-out from Claverley Group. Financial terms were not disclosed. 

Lone Star Funds acquired ERIKS, a Utrecht, The Netherlands-based industrial components distributor and engineering service provider. Financial terms were not disclosed. 

Tailwind Capital acquired a majority stake in GrayMatter, a Warrendale, Pa.-based provider of industrial automation and intelligence solutions. Financial terms were not disclosed.

TruFood Manufacturing, a portfolio company of Mubadala Capital, merged with Bar Bakers, a Los Alamitos, Calif.-based manufacturer for nutritional snack brands. Financial terms were not disclosed.

EXITS

Kelly (Nasdaq: KELYA, KELYB) agreed to acquire Motion Recruitment Partners, a Boston, Mass.-based parent company to talent solution providers, from Littlejohn & Co. for $485 million in total consideration. 

OTHER

Savage acquired Texon, a Houston, Texas-based provider of butane blending and energy marketing services. Financial terms were not disclosed.

IPOS 

ZEEKR, a Ningbo, China-based electric vehicle company, plans to raise up to $367.5 million in an offering of 17.5 million shares priced between $18 and $21 on the New York Stock Exchange. The company posted $7.1 billion in sales for the year ending December 31, 2023. Geely Auto, Geely International, and GHGK Innovation limited back the company.

Games Global, a Douglas, Isle of Man-based developer and distributor of online betting and casino games, plans to raise up to $275.5 million in an offering of 14.5 million shares priced between $16 and $19 on the New York Stock Exchange. The company posted $383 million in revenue for the year ending December 31, 2023. Zinnia Limited backs the company.

Tamboran Resources, a Barangaroo, Australia-based natural gas exploration and production company developing the natural gas resources within the Northern Territory of Australia, filed to public on the New York Stock Exchange. Sheffield Holdings, Nuveen, Morgan Stanley Australia, The Baupost Group, and Helmerich & Payne International Holdings back the company.

FUNDS + FUNDS OF FUNDS

Hyde Park Venture Partners, a Chicago, Ill.-based venture capital fund, raised $98 million for its fourth fund focused on early stage startups in the Midwest and Toronto.

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