SOSV this morning announced work on a $ 50 million HAX facility in Newark, New Jersey, focused on growing industrial, health and climate startups. The five-year development plan uses $ 25 million from the New Jersey Economic Development Authority.
The facility is slated to open in June 2022, with an eye out for US start-ups working through their seed cycle. SOSV notes that while HAX initially focused on wearable devices, in recent years the accelerator has largely shifted to industry and healthcare, which currently make up 70% and 20% of its portfolio. , respectively.
“Since 2015, HAX has started investing in more industrial and healthcare startups and now accounts for 90% of our new investments,” Garrett Winther, HAX partner, told TechCrunch. “These tough tech startups, in their early stages, tend to rely on deeper scientific R&D, high-precision prototyping, and only need one or two of their first product before raising funds. . These companies also take up a lot of space, easily filling a room with their equipment and prototypes.
Newark was chosen for a myriad of reasons, including proximity to New York City and universities like Princeton and Rutgers. It also has, frankly, more space than, say, Manhattan – which is an obvious necessity for industrial startups. This is largely the reason why companies like AeroFarms and Bowery have turned to the region to host their huge vertical farming facilities.
The fact that the state is willing to shoulder about half the cost of the project probably didn’t hurt either. New Jersey undoubtedly has a vested interest in welcoming hardware startups with open arms. It will be interesting to see what kinds of incentives local governments can offer to help them stay there to avoid the lure of neighboring New York City.
“The growth of the innovation economy in New Jersey is both creating high quality jobs today and creating opportunities for exponential returns in the future,” said NJEDA CEO Tim Sullivan , in a press release. “As startups succeed and thrive in New Jersey, they build buildings, hire more employees, and become anchors for vibrant communities and small business supply chains. “
SOSV says the Newark site will function effectively as the US equivalent of its offices in Shenzhen, China, which provide easy access to the global supply chain. HAX also operates satellites in San Francisco, Tokyo and New York.