NASA VC unit takes flight

With little fanfare, NASA has launched a new venture fund.

It quietly announced in September that its Red Planet Capital fund now has a management team in place and is ready to review business plans.

Heading up the unit is Peter Banks, co-founder and former partner of XR Ventures, the VC arm of X-Rite Corp., Graham Burnette, general partner of the EA-Capital Fund family, and Jacques Vallee, co-founder of EA-Capital Fund. Banks is not new to NASA. While a faculty memeber at Stanford University, he participated in several space shuttle missions as a researcher.

At the beginning of the year, NASA announced it was forming Red Planet to invest in innovative technologies related to the nation’s space exploration agenda, such as a manned mission to Mars.

Based in San Mateo, Calif., Red Planet plans to invest about $75 million over the next five years. The principals will invest as much as $5 million per company over multiple rounds of financing, with seed funding as low as $250,000.

The money for the fund will come entirely from NASA, though Red Planet expects to co-invest with traditional VC firms.

Whether the fund can pull off a manned mission to Mars with the help of VC-backed startups is another matter. Among the technologies NASA is looking to fund are how to preserve medicines for use in space and recycling water using space suits.

Red Planet has been likened to In-Q-Tel, the VC unit of the Central Intelligence Agency that invests in security related startups and othe companies that could be of use for the spy agency. In fact, the nonprofit NASA fund features another similarity to In-Q-Tel. Gilman Louie—former CEO of In-Q-Tel and co-founder of Alsop Louie Partners—will serve on Red Planet’s board of trustees. Joining him on the board is Ruann Ernst, the retired CEO of Digital Island. —Alastair Goldfisher