February 23, 2018
Mary Ann Azevedo is an Austin-based business writer who has written for Venture Capital Journal, San Francisco Business Times, Crain's and Silicon Valley Business Journal.

Despite a fondness for Patagonia vests, VCs aren’t typically making deals in the wild. But entrepreneurs who look to make the outdoors more comfortable and accessible are raising quite a bit from investors.

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Consumers spend about $887 billion annually on outdoor recreation, and the industry is responsible for 7.6 million American jobs, according to an April 2017 report from The Outdoor Industry Association. That’s up from $646 billion and 6.1 million jobs in 2012.

Meanwhile, North American venture investing in the outdoor space climbed five-fold from $8.9 million in 2013 to $44.82 million in 2017, according to a Crunchbase analysis of reported deals.

Last week, a string of double-digit deals in the space were announced—an indication that 2018 will be even more lucrative one for startups raising money in the space.

This month, San Francisco-based peer-to-peer RV rental marketplace Outdoorsy brought in $25 million in a Series B round led by Aviva Ventures and Altos Ventures, with participation from Tandem Capital and Autotech Ventures. Competitor RVShare last week announced a $50 million private equity raise from Austin-based Tritium Partners, whose managing partners led the first investment in vacation rental giant HomeAway.

RVShare, which is based in Akron, Ohio, and has an office in Austin, was founded in 2013 after co-founder Mark Jenney bought an RV to use for an “RV honeymoon” after his wedding. Once the honeymoon was over, Jenney and his wife realized they would not have time to use the RV going forward.

“Being familiar with vacation rental websites, they figured the same must exist for RVs,” noted RVShare co-founder Joel Clark. “When they found out it didn’t, we decide to build it, and the world’s first peer-to-peer RV rental platform was born. It was really a solve-your-own-problem start for the company.”

The startup recently hired former HomeAway executive Jon Gray, who also worked briefly at Austin Ventures, as its CEO.

Meanwhile, Missoula, Montana-based mobile apps company onX announced it had raised $20.3 million—nearly half brought in by the field as a whole all of last year. Summit Partners led the investment, which also included participation from Bessemer Venture Partners, Millennium Technology Venture Partners, NEXT Frontier Capital, and J.P. Morgan Chase & Co. Director Stephen Burke.  Over the past nine years, the startup has focused on creating interactive map-based information for hunters and outdoor enthusiasts to help them plan and navigate their excursions.

It’s safe to say the outdoor space is increasingly attracting investment from venture firms who had not previously invested in the area and who are known more for investing in “traditional” technology firms.

Venture Firms Branch Out

At least two of onX’s investors are historically more known for investing in industries such as IT, fintech, and e-commerce.

But both Summit Partners and Bessemer Venture Partners saw enormous potential in the company’s future.

In a blog post that originally appeared on the firm’s LinkedIn page, Summit Partners’ Managing Director Greg Goldfarb and Principal Colin Mistele outlined why their firm was drawn to onX.

When first introduced to onX, the pair wrote that they “immediately recognized a special combination of culture, product-market fit, performance, and the rare blend of self-awareness and ambition that we find in many of the world’s great bootstrapped growth companies.”

Bessemer Venture Partners’ Investor Anna Khan said her firm was impressed with the market opportunity faced by onX, which initially primarily focused on the hunting industry.

“There’s this whole world of outdoor recreational activities that include what most people don’t realize are massive spend markets, such as fishing, camping and trail sports,” Khan told Crunchbase News. “OnX is slowly moving into all these verticals that need off-pavement data to exist.”

Anna Khan, Courtesy of Bessemer Venture Partners

Most mainstream GPS apps don’t provide off-pavement data, Khan noted.

“The map-enabled apps that most people are familiar with are urban-centric,” she said. “But onX is aggregating tons of data sources and bringing them all together into one consumer-focused sharing-enabled app.”

Another of onX’s strengths, she added, is that its technology lets users track the boundaries of public and private land while creating custom maps with other information grouped into “layers” for when they’re doing things like hunting, fishing, or hiking.

Both firms also liked the fact that onX founder and CEO Eric Siegfried didn’t just talk the talk. He is an avid hunter who knows exactly what other hunters would want in a map-enabled app.

“This is a field that the founder is passionate about,” Khan said. “I think they are in a unique competitive position as a result.”

Eric Siegfried

Looking ahead, Bessemer is a roadmap-driven firm and is open to more investments in the outdoor space, according to Khan.

“We spent a lot of time researching a space before deciding this was the team and app we wanted to support,” she said. “In general, there’s a lot of spend that goes into this industry and a real market need for superior data. If we can find more companies that bring robustness, strong product design, and deep expertise in the field, I’m sure we’ll make more off pavement or outdoor vertical-based investments.”

Growing Outdoors

OnX has been profitable since day one, its revenue has grown 100 percent year over year and it has just shy of 70 employees, according to COO and CFO Josh Spitzer. Hundreds of thousands of people use its app. So why has it decided to take its first outside investment after nine years?

“In the hunting and adjacent­ markets, there is still so much opportunity where we can drive expansion,” Spitzer told Crunchbase News. “This capital gives us the ability to not have to let off the gas, but instead take advantage of strong ROI opportunities in a whole host of areas.”

The company chose to work with a group of investors it felt would help it reach “the next level of scale” it aspired to with a combination of capital, experience, and expertise.

“We thought the outside perspectives of the firms would help us improve our game dramatically,” Spitzer said.

As more people continue to look outdoors for recreation, it’s inevitable that more startups will pop up to meet their needs and more venture firms will invest in the growing space. If the first two months of this year are any indication, then 2018 could be a bigger year for venture funding than the previous few combined.

iStockPhoto / Borodatch