A letter to the Next Ventūres community

We hope you and your loved ones are healthy and safe at a time when, more than ever, nothing matters more. There are likely many e-mails in your inbox about COVID-19. Our goal is to provide you with a concise update about what we’ve learned in the last few weeks, how we’re responding, and the confidence we have in the road ahead. We would love to hear from you, whether it be to provide feedback, ask questions, or play a more active role in what’s to come.

Now is an interesting time to be managing a VC fund in the health, sports and wellness space. Our mission from the beginning has been to invest early in companies that not only deliver significant growth, but provide access to the technologies and services that anyone around the world can use to lead a healthier life. At a time of a global healthcare crisis, this mission takes on a different and more important meaning, and our portfolio is uniquely positioned to contribute.

Where we are today:

- Our first priority is supporting our existing portfolio. And that begins with the people. Our CEOs and their teams are well-prepared to lead their companies during uncertain times, and we’re working closely with them through the efforts outlined in more detail below.

- We’re still investing responsibly, and expect to close on two more opportunities by the end of Q2.

- We continue to see high quality deal flow (over 550 companies since June 2019) and are ensuring we don’t miss any opportunities.

How we’re planning for tomorrow, working with our portfolio companies to take the following actions:

- Preparing for the expected downturn in consumer and business spending, especially on non-essential products.

- Building plans for reduced MRR of 30% or more while keeping operating expenses level, and confirming capital to keep operating for 12–18 months.

- Being thoughtful about marketing and tone of voice, as audiences will not be receptive to promotional messages.

- Staying present with consumers through transparency, community engagement and acknowledging the uncertainty of the times.

- Reporting monthly to investors, and holding regular virtual board meetings.

We expect to see long-term shifts in consumption habits from physical to virtual services, and the continued growth of e-commerce. And early signals show an increase in at-home fitness and health product spending. Google Trends reported this week that searches for in-home fitness content have spiked +110% as people look for alternatives to their local gym. Consumers are looking for trusted brands that can provide utility in their disrupted lives, specifically in health, wellness and fitness. Our portfolio is ready to serve this new and accelerated need.

Portfolio highlights:

Steady MD: Consumers are quickly becoming more comfortable with virtual healthcare services. Earlier this week, the US government announced that Medicare will temporarily pay clinicians to provide telehealth services to its patients, including mental health counseling and preventative consultations. Since then telemedicine daily patients have spiked 50%.

Oura: Announced their Series B this week, and responded quickly to community members who are using their rings to track body temperature, sleep quality and overall health — and in the case of this one user, discover he has the virus. We expect to see wearable devices playing an even more important role in slowing the spread of COVID-19.

PowerDot: Launched their medical device and platform earlier this year, giving healthcare providers the tools to treat patients virtually. Clinicians can send therapies through the mobile app, and track at-home compliance without needing to see patients in person.

Amp Human: Recently won two non-dilutive innovation contracts from the US Air Force totaling $1.55M, and quickly expanding e-commerce business to account for reduced traffic to physical retail and many canceled sporting events.

We will share additional updates regularly. Until then, stay safe and feel free to reach out to us any time.

Best,

Lance, Lionel and Mel

Next Ventūres Managing Partners