Princeton-based SOSV is building a $50 million HAX headquarters in Newark with $25 million in state aid from the New Jersey Economic Development Authority, the two announced on Sept. 16.
As part of the agreement, the two will jointly form the entity HAX Newark to build the new U.S. headquarters, which will open June 2022 with an eye toward attracting industrial, health care and climate tech startups.
“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,” commented HAX partner Garrett Winther, who said the $25 million from the NJEDA played a major role in its decision making. “New Jersey also has remarkable incentives for startups.”
The agreement calls for HAX to attract, develop and support 100 startups over the next five years. It’ll lease up to 60,000 square feet of space for up to 200 founders and their staff, as well as fabrication and prototyping workshops. There, those companies will receive facilities, mentorship, education and financial investment.
Each company has to create at least 2,500 jobs over the next decade in order to qualify for financial support from the state and HAX, reads the joint statement.
In addition to the funds from the NJEDA, the close proximity to Manhattan, and Princeton and Rutgers universities were also major pluses. HAX has satellite offices in New York, San Francisco and Tokyo, and another headquarters in Shenzhen, China.
Institutions like Princeton University; the New Jersey Institute of Technology, also in Newark; and the New Jersey Manufacturing Extension Program would play a key role in funneling local talent to these startups.
“New Jersey’s higher education institutions will continue to keep pace with innovation and produce top-notch talent to fill these future positions in the emerging companies supported by HAX,” said New Jersey Higher Education Secretary Brian Bridges.
There are other similar arrangements in the pipeline or in use by startups in the state, such as NJ Ignite, which covers several months of rent for startups, and NJ Accelerate, under which entrepreneurs get private and state funding and access to facilities, financing and mentorship. And, there’s the NJ Innovation Evergreen Fund, capped at $60 million a year, in which the state and a private venture capital firm will jointly finance startups, capped at $5 million per entity.
“HAX is a game-changer for the New Jersey innovation economy,” said Tim Sullivan, chief executive officer of the NJEDA. “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.”
The financial support from the state will include $25 million “to fund the joint entity,” state officials said, while SOSV will put up $25 million spread out as $250,000 for each of the 100 companies.
That $25 million from the state would be considered at an upcoming NJEDA board meeting, and would go toward running the brick and mortar facility. Companies participating in HAX’s accelerator could get up to $50 million as they continue to grow.
Garrett said that all signs pointed toward an economy that would prioritize “sustainable energy” and low-carbon, and that would need new forms of domestic industrial and chemical engineering.
“We need a lot of it, and we need it fast,” he said.s