HAX, a hard-tech accelerator run by one of the most-active venture capital firms in the world, will announce Thursday morning that it is establishing its U.S. headquarters in Newark — and bringing with it a commitment to develop 100 companies in the city over the next five years, ROI-NJ has learned.
Companies participating in the HAX program are expected to create at least 2,500 new, well-paying jobs in the decade ahead and attract millions in new capital to Newark and New Jersey — as well as greatly enhancing the reputation of the city and the state in the tech ecosystem.
The announcement is a huge win for Gov. Phil Murphy and his efforts to reinvigorate the state’s innovation economy. Princeton-based SOSV — which controls HAX — selected Newark over six other locations in a national search for a new headquarters that started with a Request for Proposals last spring.
SOSV founder and Managing Partner Sean O’Sullivan said the state’s history — past and present — was the key to picking Newark over two other finalists.
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“From the electric light bulb to the telecommunications and pharmaceutical industries, New Jersey has a long history as the birthplace of industries,” he said. “Gov. 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.”
The program will seek companies that combine science and engineering, with a focus on industry-level innovation in areas related to the reindustrialization and decarbonization of the U.S. while renewing the U.S. industrial base.
HAX is currently looking for a location in downtown Newark — and hopes to take occupancy during the first quarter of next year.
Murphy celebrated the announcement.
“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,” he said. “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, first-class 21st century infrastructure, and impressive network of higher education institutions.”
SOSV has a proven track record of investing in over 100 manufacturing and industrial startups, including Formlabs, a 3D printing startup recently valued at over $2 billion, and Opentrons, the lab equipment startup operating New York City’s automated COVID-19 testing.
To date, HAX companies have collectively raised a total of $1.8 billion, of which $105 million was invested by SOSV. The current aggregate valuation of all HAX companies is $8 billion.
Here’s how this deal will work:
- The New Jersey Economic Development Authority and SOSV have signed a letter of intent to create a joint entity, HAX Newark;
- The EDA will make an initial investment of $25 million to fund the joint entity;
- SOSV also will commit $25 million, but will do so with a $250,000 initial investment in each of the anticipated 100 companies;
- SOSV will provide 180 days of hands-on collaboration and offer a global founder community for each of the early-stage founders building hard-tech startups;
- The companies in the program also may receive up to $50 million from SOSV as follow-on financing to support them as they grow.
EDA CEO Tim Sullivan said the agreement represents the biggest payoff yet on Murphy’s push toward technology.
“This is a legitimate game-changer for the innovation economy and certainly ratifies the governor’s focus on technology and innovation,” he said.
The deal still needs to be approved by the EDA board, which will discuss it at its Oct. 13 meeting.