SOSV this morning announced work on a $50 million HAX facility in Newark, New Jersey focused on growing industrial, healthcare and climate startups. The five-year development plan utilizes $25 million from the New Jersey Economic Development Authority.
The facility is set to open in June of 2022, with an eye on early-stage U.S. companies working toward their seed round. SOSV notes that, while HAX’s earliest focus was on wearables, in more recent years, the accelerator has largely shifted to industrial and healthcare, which currently comprise 70% and 20% of its portfolio, respectively.
“Since 2015, HAX started investing in more industrial & health startups and today make up 90% of our new investments,” HAX partner Garrett Winther told TechCrunch. “These hard tech startups, at their earliest stages, tend to rely on more deep science R&D, high-precision prototyping, and only require one to two of their first product before raising funding. These companies also take up a lot of space, easily filling a room with their equipment and prototypes.”
Newark was chosen for myriad reasons, including proximity to New York City and universities like Princeton and Rutgers. It also, frankly, has more space than, say, Manhattan — which is a clear necessity for industrial startups. That’s a big part of the reason companies like AeroFarms and Bowery have looked toward to the area to host their massive vertical farming facilities.
The fact that the state was willing to put up around half the cost of the project likely didn’t hurt, either. New Jersey no doubt has a vested interest in welcoming hardware startups with open arms. It will be interesting to see what sort of incentives the local governments can offer to help keep them there to avoid the allure of nearby NYC.
“Growing New Jersey’s innovation economy both creates high-quality jobs today and generates opportunities for exponential returns in the future,” NJEDA CEO Tim Sullivan said in a release. “As startups become successful and scale-up in New Jersey, they build buildings, hire more employees, and become anchors for vibrant communities and small-business supply-chains.”
SOSV says the Newark location will effectively operate as a U.S. equivalent to its offices in Shenzhen, China, which afford easy access to the global supply chain. HAX also operates satellites in San Francisco, Tokyo and New York.
Source: New feed