The last few months have felt like a shift that should have taken years. HAX, with our largest hub located in Shenzhen, saw the earliest effects of COVID-19 in January. What began with uncertainty, rapidly led to lockdowns for our other San Francisco and Tokyo locations, isolation for our staff, and big decisions for our portfolio companies across dozens of countries. While there is no question that there are volatile times are ahead for many, we have hope for the future and the role that HAX startups will play in it. We’ve made a few actions as a result of the ongoing global health crisis.
Direct efforts fighting COVID-19
HAX and its portfolio have a unique skill set in rapidly manufacturing physical products as well as moving physical goods around the world. Starting in January, HAX and its portfolio have shipped hundreds of thousands of articles PPE to all corners of the world. We have seen startups utilize their engineering talent to support local health systems, as well as development of new offerings in record time to support local hospitals, businesses, and essential workers.
HAX has also invested 10s of millions of dollars this year into companies directly combatting COVID-19 with rapid, low cost testing enabled by CRISPR, scaling COVID-19 testing with automation tools, identifying respiratory changes in at-risk populations, sanitizing workplaces (and their bathrooms), and robotics disinfecting hospitals.
We’ve become the most active VC in the world
Unlike many VCs this year economic uncertainty, SOSV (our global venture capital firm) was the most active VC in the world in the second quarter of 2020. While some investors have paused during the recent months, we have doubled down on the future we see emerging with hard tech offerings.
While there have certainly been challenges, we have benefited from our years of cross-border, remote collaboration models. There has also been an inspiring rise of entrepreneurs which has lead to some of our most exciting investments that we can’t wait to share with the world soon.
Remote collaboration and air freight prototypes
COVID-19 has presented unique challenges when dealing with physical product development, but our team responded rapidly with a remote HAX Seed Program. We’ve built new development tools, processes for collaborating, and ability to ship prototypes all over the world. Startups beginning the HAX Seed Program in 2020 are primarily collaborating with the HAX through video calls and digital collaboration tools, but the most exciting part of their days are receiving a steady stream of prototypes, parts and sample shipments from our team in Shenzhen.
As the world has gone in and out of shutdowns, Shenzhen managed to stabilize in early March. Many of our partners, manufacturers, and vendors were back to full capacity and we were able to get much needed prototypes to teams around the world despite local constraints.
Our San Francisco location remains limited in access for teams working directly on COVID-19 projects. Startups are still successfully interacting with the investment community and raising follow-on venture capital rounds through primarily digital fundraising. We see a lot of promise to this new approach in fundraising and actively building new ways to engage our investment network all over the world.
We look forward to the day when we can work together in person across San Francisco, Shenzhen and Tokyo locations, but we will prioritize supporting local public health efforts and remain agile to continue enabling hard tech startups move as fast as possible.
Supporting startups during a “K-shaped” recovery
All signals point an unequal recovery between industries, demographics and geographies. There will be startups that don’t make it through the next year, some that are already rapidly scale to new demands, and some that haven’t felt much market effect at all.
This is particularly true for hard tech companies and requires a nuanced approach to strategy, planning and cash management. We’ve had our share of late nights, emergency board meetings, and tough decisions by many of our startups but ultimately see much of our portfolio becoming stronger and better positioned as a result. We know there’s plenty of hard work ahead but continue to see an even bigger role for hard tech going forward.
More changes to come and an evolving HAX
We’ve changed a lot since our very first investments in 2012 and there’s no question more changes will come in the years to come. Some things at HAX will return to pre-COVID and others will evolve into something entirely new. We aren’t publishing every change we are making at the moment but we look forward to sharing more over the coming months.