HAX Coming To Newark; May Create 2,500 Jobs, Gov. Murphy Says

NEWARK, NJ — A coveted HAX facility is coming to Newark, and as many as 2,500 jobs may be coming along for the ride, officials say.

Gov. Phil Murphy recently announced that the New Jersey Economic Development Authority (NJEDA) and Princeton-based venture capital firm SOSV intend to bring a HAX hard tech startup development program to Essex County.

“HAX's Newark office will be the flagship location for HAX in the U.S. and the center of operations for a new network of programs across the country,” Murphy’s office said.

The HAX seed program helps entrepreneurs to launch “hard tech startups” by providing aid such as a $250,000 initial investment in each selected company, engineering support and 180 days of hands-on collaboration with industry experts.

HAX plans to lease up to 60,000 square feet of space in Newark, including space for 200 founders and staff, and fabrication/prototyping workshops. It aims to welcome its first companies at the Newark location in spring 2022, spokespeople said.

Newark was selected as the location for the new HAX program site and the U.S. HAX headquarters through a competitive search that compared locations across the country. The NJEDA is tentatively planning to invest $25 million into the effort.

According to Murphy’s office:

“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 U.S. 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 intends to commit 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,” Murphy 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, 21st century infrastructure, and world-class network of higher education institutions.”

SOSV founder and managing partner Sean 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,” a high-quality internet infrastructure, new innovation-focused programs in the state, and “the Tri-State region’s number two ranked global venture capital ecosystem.”

Newark Mayor Ras Baraka said he was excited about the arrival of the HAX hard tech startup program in the city.

“We look forward to working with HAX and the SOSV/NJEDA partnership to accelerate Newark’s growth as a technology hub,” Baraka said.

According to Murphy’s office:

“Establishing the HAX headquarters in Newark brings the #1 Most Active VC globally at Angel and Seed stages and #3 most active VC globally in Q2 2021 to the city. 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. The creation of the new HAX entity in Newark provides a one of a kind, best-in-class startup development program focused on the re-industrialization of the U.S. economy and renewing the U.S. industrial base. 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 dollars and Opentrons, the lab equipment startup operating New York City's automated COVID-19 testing … 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.”

Garrett Winther, a partner at HAX, wrote about the Newark facility – and what sealed the deal – in a blog post last week. He stated:

“The new HAX presence in Newark will be a natural extension of HAX’s evolution. We started with consumer wearables ten years ago (and still love them), but today 70% of our companies are industrial disruptors, and 25% are health care. The founders are just as likely to be scientists building proprietary technology as they are engineers integrating technology.”

Winther continued:

“Why Newark, New Jersey? SOSV ran a nationwide search and competitive process. Locations in the midwest have an industrial legacy; the south has a rising manufacturing base, and the west coast leads on clean energy. Simply put, the city stands out because it offers a nearly perfect location for early-stage startups to take their first, crucial steps towards commercialization. Newark has a rich industrial and logistics heritage, including the east coast’s largest port, and there is ample, affordable space and infrastructure available for large-scale engineering projects. Many of the country's top research universities and technology-driven corporations are not far away, replete with researchers and scientists who might be entrepreneurs one day. Downtown Newark is a happy, bustling area with plenty of affordable industrial space. At the same time, the city is just 10 minutes away from one of the country's best-connected airports and a 20-minute train ride to Manhattan, the center of the second-largest venture capital ecosystem in the world. In the years ahead, the HAX founders in Newark will have no shortage of access to talent, capital, physical space or inspiration.”

Winther added:

“The NJEDA was eager to bring HAX to the Garden State for all those reasons, but they were not alone. New Jersey stood out because it was willing to commit $25 million to build out the new HAX presence in the state. For its part, SOSV committed to invest at least $25 million in 100 HAX startups over the next five years. New Jersey also has remarkable incentives for startups, such as 1:1 matching investments, angel/seed investor refundable tax credits and the NJ Innovation Evergreen Fund, which matches investments up to $5 million in New Jersey-based companies. Many of those policy innovations are the work of NJ Governor Phil Murphy, who is also an enthusiastic supporter of the HAX partnership.”

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