NFX Capital and Moov Technologies
In July 2019, James Currier, a general partner at San Francisco-based NFX Ventures, was considering a seed stage investment of $1.5 million in Moov Technologies, a B2B marketplace for used industrial equipment. NFX was a venture capital firm focused on seed-stage investments in technology businesses that utilized one or more of 15 network effects that NFX identified, viewing such businesses as having asymmetric upside potential. Currier saw growing potential in B2B marketplaces, which had taken a backseat to B2C marketplaces in the early 2000s. But market dynamics were changing as Milennials took the reins in legacy industries and looked for ways to bring the ease and speed of B2C marketplaces they were accustomed to in their personal lives to the workplace. NFX had already invested in one B2B marketplace and was now considering Moov, which operated in the pre-owned semiconductor manufacturing equipment market - estimated to have a market size of $8 to $10 billion. The business model was predicated on the fact that large manufacturers like Intel typically bought manufacturing equipment that had a 15-30 year useful life, but only used it for 3-5 years before swapping it out for newer models. The used equipment then either sat idle while it depreciated or was sold to other manufacturers through brokers. Steven Zhou, Moov's founder and CEO, had worked as a broker in the semiconductor equipment industry for 6 years; he used that experience to launch Moov in 2017 to digitize the equipment resale process through an online marketplace. As a seed stage investor, Currier knew he had to rely heavily on his assessment of the team, the product, and the sector. Currier acknowledged that Zhou was relatively inexperienced and would need mentorship. Yet Currier was impressed by Zhou's work ethic and "hustle." He was also encouraged by the fintech growth potential for Moov, including adding services such as insurance, shipping, and vendor financing.
- 2022 HBS
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