Melbourne startup Navi secures $400,000 grant to develop tech to help critically ill newborns


Navi co-founder and chief Alex Newton. Source: Nic Song, Melbourne Business School.

Melbourne medtech startup Navi Medical Technology has secured just shy of $400,000 in government grant funding to launch the next phase of development of its tech that helps critically ill newborns.

The $396,452 grant funding brings the startup’s total funding secured to $1.7 million, following about $1.15 million in angel and venture capital investment, including from Artesian, and about $150,000 from pitching competitions.

Founded in 2016, Navi is creating a device using electrical signals to help doctors position central lines that deliver medicines to critically ill newborns.

There are plenty of similar products on the market for adults, co-founder and chief Alex Newton tells StartupSmart.

“But no one has done this for children before.”

According to Newton, only about 5% of medical innovations that come to market make their way down to neonatal patients, creating a challenge for those who work with newborns.

Navi set out to start rebalancing that.

“There’s a lot of room to improve there,” Newton says.

“You might argue they’re the most vulnerable patients out there, and they’re not really getting the products you need.”

Newton himself doesn’t come from a medical background. In fact, in a previous life he was an aerospace engineer.

Having worked overseas, he returned to Australia to find his industry shrinking. Knowing he wanted to take his career in a slightly different direction, he joined Melbourne Business School and found himself on a ‘biodesign innovation’ course, where he met the people who would become his five co-founders.

The program is designed to bring together engineers and business people, within a clinical setting, with a view to identifying some of the major problems in the space and finding ways to address them.

Spending time in the neonatal intensive care unit (NICU), seeing doctors, nurses, parents and patients interacting, left a strong impression on Newton.

“I remember thinking: ‘I’m not a doctor and I’m not a nurse. But I’m an engineer and I’ve got a business degree. Surely I can help out somehow?’,” he recalls.

“That emotional side is very strong.”

It’s a technical field that appeals to Newton’s engineering brain, but also provides interesting commercialisation opportunities. And the founder values making a positive impact on people.

“The startup journey is incredibly difficult … if you’ve got that purpose that really drives people and motivates people, that’s what really helps us get through those difficult times,” he explains.

“You can have terrible conversations about why the product is delayed, or the engineering isn’t going right, or it’s difficult raising money, or the regulatory environment is uncertain.

“But then, when you go back and set foot inside the NICU, it brings it all back into very sharp focus,” he adds.

“Off to a great start”

This $400,000 in grant funding will help Navi complete its next phase of testing, a clinical study at the Royal Women’s Hospital in Melbourne.

But, it brings the total funding raised for the startup to close to $2 million, which Newton says is something of a feat for a medtech business, especially in the pediatric space.

“It’s a much smaller market … which means it can be difficult to raise funding,” he says.

When you’re pitching to investors, they’re typically looking for market size, as well as the team, traction and other metrics.

“If your market size isn’t in the tens of billion of dollars, they just pass, because there are so many opportunities out there that are addressing gigantic markets,” says Newton.

Navi took a strategic approach, he explains. Through taking part in the Medtech Actuator accelerator program, the team formed a relationship with Aussie venture capital firm Artesian, which ultimately became a backer, along with several angel investors.

The business has also secured cash through winning pitch competitions, and through additional grants.

The rate of failure in this kind of startup is high, Newton says, partly because of how tricky it can be to attract funding.

“We’ve been able to get over that first hurdle to the point that now, after this funding, we should be able to have evidence of how our product works in a clinical environment,” he says.

“We’re off to a great start.”

The startup is working towards its Series A round, later on this year, and by then, Newton says Navi will be looking for funds to help finalise its design, secure registration and complete clinical studies, as well as potentially funding a market rollout.

Going global

Having a laser focus on pediatrics also means Navi has had to think globally from day one.

“You can’t just have a domestic view, because the market is so small,” Newton says.

Because of its size and maturity, the US is the “obvious market” to target, he says.

There are about 25 neonatal intensive care units in Australia, he says. In the US, there are more than 1,100.

And when you’re working with children’s medical innovation, Newton says the US Food and Drug Administration (FDA) is “incredibly supportive”.

In its early days, Navi entered and won an FDA pitch competition, bagging $50,000 in prize money. The authority also waives registration fees for devices in the pediatric care space.

“It’s things like that that make it very attractive for us to focus on getting US approval,” Newton says.

The startup has also landed partnerships with three leading children’s hospitals.

“I think that’s quite unique for an Australian startup,” he says.

However, the team will continue developing the product here in Australia.

Navi has a strong working relationships with the Royal Women’s Hospital in Melbourne, and other hospitals running “top-quality clinical trials”, Newton says.

The R&D tax incentive scheme is also a big draw, as well as government grant opportunities.

“For the next phase of product work I wouldn’t choose anywhere else in the world — Australia is really good,” the founder says.

“We’re actually really well positioned being an Australian company with one foot in the US already.”

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