Driving Display Startup Navdy Raises $20M to Start Commercial Production

Navdy has created a heads up display for cars that projects information from user smartphones onto windshields.
Navdy Inc.

Seeking to end the dangerous juggle many smartphone-wielding drivers do when navigating, reading email, texting and calling contacts, Navdy Inc. created a gadget that projects information from smartphones onto car windshields.

The startup, which quickly gained traction last year from investors and early adopters preordering its $299 gadget, has now closed a $20 million funding round. The infusion will be used to hire more engineers and move beyond the first production run and begin commercial manufacturing of the 5 inch-by-4 inch projectors later this year.

“If you look down for four seconds while going 60 miles per hour, you’ve just driven a football field blind. I’ve had those same moments during stop-and-go traffic as well,” said Navdy Founder and CEO Doug Simpson of the impetus for founding the startup in 2012.

. Simpson said he wasn’t looking to raise a round just yet. He had closed a $6.5 million seed round in August last year along with $6 million in preorders for some 17,000 of the devices.

Strong inbound investor interest made him decide to raise $15 million–a sum that quickly increased to a $20 million Series A round.

Navdy is the latest in growing class of hardware startup to pique investor interest. The total amount of venture capital invested in electronics and computer hardware companies hit $2.56 billion in 2014, a record that eclipses the previous high of $2.24 billion in 2000, according to Dow Jones VentureSource. New and growing hardware accelerators including PCH International’s Highway 1, Bolt, Dragon Innovation, as well as Y Combinator’s move to support the sector, are signs that the next wave of hardware startups is still being built.

A graduate of the Highway 1 program, Mr. Simpson said the hardware portion of the product took multiple iterations to refine. Gradually his team shrank the size and improved the design. Navdy can plug in through any car’s 12V power outlet or, if the car was manufactured after 1996 and has an on board diagnostic port, Navdy can operate through that and display the car’s speed, RPM, mileage. fuel, check engine status and other data.

Users download the Navdy app on their smartphones that then uses Bluetooth to send phone calls, texts and selected apps from the phone to the Navdy device, which then projects the information onto a small portion of the windshield on the driver’s side.

Navdy’s service allows users to control apps with voice commands, similar to the way GoogleNow and Siri operate. Navdy also has a camera that recognizes gesture controls, so users can do things like swipe left to answer a call or swipe right to dismiss a notification.

Mr. Simpson said his team is still testing the system with the goal of improving its usability. He said Navdy is in partnership talks with a number of insurance agencies, with deals likely later his year. He declined to provide details.

He dismissed questions about the possibility of new safety problems created with the system, noting that Navdy follows guidelines set by the National Highway Transportation Safety Administration on distracted driving. Disabling alerts while a driver is executing a turn and disabling apps such as Netflix that stream movies, are additional safety steps Navdy has taken, he said.

He added that some higher-end car manufacturers like BMW and Audi have sold several million such heads-up display options on models in recent years and there has been no negative feedback.

He expects to ship the initial production run of preorders during the second half on 2015 and enter production capacity with the ability to produce between 20,000 and 30,000 a month after that. The price will increase from $299 to $499 after the initial production run.

Existing investor Upfront Ventures led the round at an $80 million valuation, Venture Capital Dispatch learned. New investors Formation 8 and Qualcomm Ventures also participated alongside existing ones including Promus Ventures, Eniac Ventures and Wareness.io.

Based in San Francisco, Navdy employs 20.

Write to Lizette Chapman at lizette.chapman@wsj.com. Follow her on Twitter at @lizette_chapman