The New Jersey Economic Development Authority (NJEDA) and Princeton-based venture capital firm SOSV intend to form a new entity, HAX LLC, which will bring SOSV’s acclaimed HAX hard tech startup development program to Newark. SOSV will also establish the US headquarters of the HAX program at the Newark site. The program is expected to help 100 companies over the next five years and create 2,500 jobs over 10 years.
HAX provides complete support for emerging companies, including a $250,000 initial investment in each participating company, 180 days of hands-on collaboration, and a global founder community for early stage founders building hard tech startups. Newark was selected as the location for the new HAX program site and US headquarters through a competitive search that compared locations across the country.
Pending a decision by the NJEDA board to approve, the new SOSV/NJEDA entity will combine science and engineering to focus on industry-level innovation in areas related to the re-industrialization and decarbonization of the US. According to the non-binding letter of intent signed today, the NJEDA Board will consider an investment of $25 million in HAX LLC.
As its contribution, SOSV commits to take 100 companies through the HAX program over the next five years and invest $25 million in these startups. These companies may receive up to $50 million from SOSV as follow-on financing to support the companies as they grow. With this support, companies participating in the HAX program are expected to create at least 2,500 new, high-paying jobs in the decade ahead as well as attract millions in new capital.
“One of my administration’s key strategies for building a stronger, fairer New Jersey is growing the most diverse, inclusive innovation ecosystem in the nation,” said Gov. Phil Murphy. “Bringing HAX and the 2,500 jobs that come with this effort to Newark will help us achieve this goal while ensuring SOSV has access to the city’s extraordinary talent pool, 21st century infrastructure, and world-class network of higher education institutions.”
“From the electric light bulb to the telecommunications and pharmaceutical industries, New Jersey has a long history as the birthplace of industries,” said SOSV Founder and Managing Partner Sean O’Sullivan. “Governor Murphy’s vision for innovation and commercialization works hand in glove with HAX’s strategy of igniting an industrial renaissance for the United States. And society as a whole has an urgent need for next generation hard tech companies to solve our current challenges in human and planetary health.”
O’Sullivan cited several factors that attracted SOSV to Newark, including the city’s proximity to major airports, mass transit, ports and highways; access to an unparalleled talent pipeline fed by world-class colleges and universities; high-quality internet infrastructure; new innovation-focused programs introduced by Governor Murphy; and the tri-state region’s number two ranked global venture capital ecosystem.
“We are excited about the arrival of the HAX hard tech startup program in Newark and we look forward to working with HAX and the SOSV/NJEDA partnership to accelerate Newark’s growth as a technology hub,” said Mayor Ras J. Baraka.
“HAX is a game-changer for the New Jersey innovation economy, and having the US headquarters for the program in Newark is not only an incredible vote of confidence in Governor Murphy’s focus on building the most diverse and inclusive innovation ecosystem in America, but it will also help to create the equitable access to resources we need to continue supercharging our economy,” said NJEDA Chief Executive Officer Tim Sullivan.
Along with the $25 million investment, SOSV intends to commit to mentoring at colleges and universities, local manufacturing sourcing, engagement in workforce development, and creating local advisory boards.
Each company that participates in HAX receives an initial investment of $250,000 and access to SOSV’s industry-leading technical assistance and facilities. HAX participants will also benefit from access to an extensive network of SOSV investor contacts at seed, and Series A, and beyond, which will facilitate follow-on investment from other VCs on the order of ten times what SOSV invests.
The new SOSV/NJEDA entity will add to these benefits with special events and a curriculum for participating companies, including an SOSV/NJEDA-hosted “Demo Day” where participants will have an opportunity to pitch their companies to a live audience of investors, strategic partners, and other media. Startups will also be matched with world-class mentors including advanced manufacturing executives, venture capital firms, serial entrepreneurs, and corporate executives possessing deep domain expertise.
HAX plans to lease up to 60,000 square feet of space in Newark that will include space for 200 founders and staff as well as fabrication and prototyping workshops. HAX aims to welcome its first companies at the Newark location in spring 2022. The HAX program in Newark will be led by HAX Partner Garrett Winther and SOSV General Partner Duncan Turner.
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