HAXLR8R Opens a China-Based Accelerator for Hardware Startups
Over the last week, 10 lucky companies have been getting the calls from HAXLR8R: they’ve been admitted to the inaugural session of the startup world’s newest venture incubator. Following the popular model pioneered by TechStars and Y Combinator, HAXLR8R will provide teams with a stipend of $6,000 per founder and about three months of mentorship, in return for a 6- to 10-percent equity stake. At the end of the session in June, companies will pitch their businesses to investors at a “demo day” in San Francisco.
There are just two big differences between HAXLR8R and all the other incubators. First, the program isn’t admitting software or Internet startups. It’s designed for companies building real stuff, rather than the usual mobile apps or consumer Web services. Second, it’s not actually located in San Francisco or any of the other typical U.S. startup hubs, like Boston, New York, or Boulder. In fact, it’s not even in the same hemisphere. HAXLR8R will gather its first class of startups at the Shiling Industrial Park in the Nanshan district of Shenzhen, a high-tech manufacturing city north of Hong Kong.
The theory behind the new program is that successful gadget builders—whether they’ve developed a toy, an appliance, or some kind of consumer device for health, fitness, or travel—will eventually have to figure out where to mass-produce their products. And chances are the answer will be China. Despite the new scrutiny being applied to U.S. consumer electronics companies over labor conditions in Chinese plants, China still has the world’s richest supply of low-cost manufacturing facilities, along with the engineers who know how to get them tooled up to make new things.
But to get something built in China, you have to know who to talk to, and the program at HAXLR8R is intended to smooth the way. Startups in the program will be “coming into an environment where they can work on their product and figure out how to manufacture it,” says Cyril Ebersweiler, one of the program’s co-founders. “They will get instant access to relationships which would take a year or more to develop on their own.”
HAXLR8R finished its selection process last week and began notifying the admitted companies. Ebersweiler says the program received “way more applicants than we expected,” from all over the world. The majority of the applications came from U.S. startups, but the organization also heard from companies in Europe, Asia, and India. The mix of applicants included “startup entrepreneurs, hackers, makers, and [people from the] open source movement; social entrepreneurs as well,” Ebersweiler says. “Most of the applicants have a working prototype.”
The 15-week HAXLR8R program starts on March 1. Teams will spend the first 13 weeks in Shenzhen, building their prototypes and gathering feedback from potential customers. Then they’ll decamp to San Francisco, where they’ll spend the last two weeks polishing their demos and pitches and meeting potential partners and investors.
Chinaccelerator, founded in 2010, mainly hosts software companies. It’s part of the Global Accelerator Network (formerly known as the TechStars Network), and its profile in the startup community got a boost last November when one of its graduates, a supply chain management startup called OrderWithMe, won the grand prize at TechCrunch Disrupt in Beijing.
Seeed, meanwhile, helps companies create prototypes of their electronic gadgets, then manufactures them on a small, initial scale. The company has “equipment, tooling, and a group of people who will be able to help [startups] on the hardware side,” says Ebersweiler.
Ebersweiler is a 30-ish French expat who’s been busy in the startup-marketing-investing circuit in Japan and China since 2001. “When I was 18, I left France on a one-year exchange program, and what was supposed to be a one-year journey turned out to be 12 years,” he jokes. He co-founded Chinaccelerator with Sean O’Sullivan, the head of a Kinsale, Ireland-based venture firm called SOS Ventures International. O’Sullivan came along as a founding partner at HAXLR8R. Together with a third co-founder, Eric Pan, Ebersweiler and O’Sullivan have lined up mentorship commitments from several U.S. entrepreneurs and investors, including MakerBot Industries co-founder Zach Smith, Intuitive Automata founder Cory Kidd, and Foundry Ventures managing director Brad Feld.
Ebersweiler says he and O’Sullivan hatched the idea for HAXLR8R after watching how quickly two startups participating in Chinaccelerator were able to find local partners to help them assemble hardware prototypes—one in near-field communications, the other in fitness. “But everybody was saying that there is still a problem in building hardware startups—it’s very hard to raise funds,” says Ebersweiler. “It became obvious that we should do something.”
Ebersweiler says HAXLR8R won’t release the names of the participating startups until June, when the program will present its first class of entrepreneurs to investors at a yet-to-be-determined location in the Bay Area. The organization wants to “keep some level of curiosity for demo day,” he says.