We've been on both sides of the table as both founders and investors. It can be tough to quickly figure out what each side is looking for... especially when not every VC is investing in hard tech. While we can't get everything into a simple document, below are a few reasons for why and how we invest. Looking for more? Check out our latest hardware trends or contact us to dig in deeper.
We invest in hard tech founders (who are often overlooked) .
The last few decades of software-led growth have been great, but software has been stuck in servers and screens. We see consistently diminishing returns in software-only solutions and believe that massively value is being unlocked as software more deeply interacts with the physical world. There is a wave or rapid advancement in automation, sensing, connectivity, materials, and life sciences; all at once, across industries, at massive scale. We invest in early stage startups that mesh these physical technologies with the digital world, unlocking massive potential through "hard tech"
We’ve heard the phrase “hardware is hard” more than once. It’s true, it can be pretty hard, but the massive opportunities are worth the effort. At HAX, we know how to de-risk hard tech startups, help them get to market, and achieve scale for significant returns. This is our sweet spot and we are happy to invest in future multi-billion dollar company that others too quickly write off as “too hard”.
We invest over $25 million dollars a year.
We invest as a part of SOSV, the most active early stage venture capital firm in deep tech. We are currently investing out of SOSV Fund IV, a $277m USD fund, kicked off in 2019. As HAX, we have three focus areas for allocation :
Industrial - 70%
Automation and sensing are rapidly unlocking new value for enterprise and industrial customers across industries. We believe there will be massive transitions in some of the worlds most established industries in the coming decades.
B2B is broad but a few examples include developing IoT platforms, enabling new insights from the factory floor, networking wifi anywhere, building robots for retail intelligence, cleaning floors, creating novel materials for chemical separation and making mining operations more efficient.
Health - 25%
Healthcare will become digital first but will require a deeper understanding of our physical health to reach its full potential. Recent technologies and models make it more effective, accessible and affordable using data and novel treatment protocols.
The next generation of health includes solutions for sleep disorders, mental health, urine analysis, molecular diagnostics and many, many more critical issues that we’d like to see as “problems of the past”.
Consumer - 5%
We are very selective with consumer companies but believe there is massive opportunity when technology unlocks a personalized user experience or enables new forms of distribution beyond current standards of retail.
A few great consumer companies are building Headphones that adapt to your personal hearing profile, STEM robotics kits that want to take on LEGO, cradles that learn your babies’ movement patterns and put them back to sleep and a complete reimagining of dry-cleaning.
We invest in teams across all geographies
We have invested in over 250 companies that represent dozens of countries. We believe that great founders and great ideas come from anywhere. Our current global startup portfolio is roughly 50% North America, 30% Asia, 15% Europe and 5% from the rest of the world.
Our first deal is a $250K USD investment package, and we follow-on up to $3M USD.
We love writing pre-seed & seed checks to help founders at their earliest stages (pre-product & pre-revenue). Our standard first check is $250k which is part of our 180 day Seed Program. We invest in around 35 new startups every year which represent ~25% of our invested capital with 75% invested into follow-on rounds from Pre-Seed to Pre-IPO. We will invest up to $3 million dollars into a single startup as they succeed and grow.
We don't just invest, we co-develop with teams.
We really like investing, but we also love building. Our team is a collection of experienced engineers, former entrepreneurs, and trained designers. We’ve intentionally built our team, spaces, tools and networks the world’s premier hardware ecosystems to help founders overcome the challenges of going to market with hard tech offerings.
We look for teams of founders that are already building,
We love big ideas but prefer founders that are already prototyping and building in the real world. It doesn’t have to be finished (and far from it) but we work best with founders that bias towards building, testing and iterating their way towards launching their offering. Most founders apply with bench top demonstrations of their technology, early versions deployed with customers, or systems prototypes that "work" but need to be refined for product.