Turnbull's AI robotics bet taps investors for blockbuster raising

Advanced Navigation
APRIL 19 2022
Published in the Australian Financial Review

AI robotics innovator Advanced Navigation has had no trouble finding its path to market.

The company, which counts former Prime Minister Malcolm Turnbull as a director, is tapping investors this month to raise between $80 million and $135 million and is expected to have no trouble getting the raise away.

The company sounded out a small group of investors late last year to gauge their appetite, but has only just kicked off the formal process.

Unlike the recent trend of start-ups raising bigger and bigger rounds every six to 12 months, Advanced Navigation has not fronted investors since late 2019.

At the time, it brought on board CSIRO’s venture capital fund Main Sequence Ventures, and US funds Brick & Mortar and In-Q-Tel (connected to the CIA) as new investors in its $20 million Series A round. Existing investor OIF Ventures (formerly known as Our Innovation Fund) also doubled down.

Advanced Navigation was co-founded in Sydney in 2012 by engineers Xavier Orr and Chris Shaw to commercialise thesis research on AI-based inertial navigation (navigation techniques using a computer, motion sensors, and rotation sensors to determine something’s positioning).

It has customers in more than 70 countries, and has more than 35,000 robotics solutions deployed. Its clients include NASA, Airbus, Boeing, Tesla, Google, Apple, and General Motors.

As well as having land and sky-based robotic solutions, it has also created a fully autonomous submersible drone called Hydrus, which can survey and record data underwater without access to internet or GPS by using sound.

Andrew Forrest’s Minderoo Foundation made a strategic investment on the back of the Hydrus project, no doubt inspired by its ability to gather data on how climate change is affecting the oceans, including CO2 absorption, reef bleaching, new diseases, loss of sea life and biodiversity, coastal erosion and fishery decline.

If Advanced Navigation achieves the upper end of its range, it will be one of a dozen or so private Aussie tech companies to raise more than $100 million so far this year.

At this stage discussions are still taking place with a broad array of investors. A raise of this size will undoubtedly put the company on the radar of more offshore VC funds.

It also wouldn’t be surprising to see a few strategic investors in the mix, with some of Advanced Navigation’s customers, including Boeing and Google, having their own corporate venture funds.

In the last year, Tiger Global, Global Founders Capital, Sequoia, Insight Partners and Horizons Ventures were some of the most active global VCs locally in the last 12 months.

Advanced Navigation’s raise will be a telling test of sentiment, though. Speculation has been rife about if, and when, the decline in listed tech stock valuations will hit private markets.

For now, local VCs spoken to by Street Talk say there is sufficient dry powder in the space to hold off any material adjustment to private tech valuations for some time.

The funds themselves are also not in the habit of adjusting valuations up, or down, outside new rounds. Then there’s the fact that many of the most highly valued start-ups are now sufficiently cashed up thanks to 2021’s capital raising boom that they have no need to raise again. If they can’t get the value they want, they’ll simply wait.

But, local VC investors unanimously agreed the froth has come off the sector multiples and the days of outrageous 100 times revenue valuations are gone - at least for now.