For a venture capital agency that's been funding Massachusetts startups since 1978, pivoting is nothing new.
MassVentures, the state's venture capital arm and the oldest quasi-public venture capital investor in the U.S., has followed emerging-technology trends for more than four decades. In the '70s and '80s, the agency invested in hardware. In the '90s, telecom was the hot trend. In the 2000s, the team turned its attention to internet-enabled businesses, and then in the 2010s, to software-as-a-service (SaaS) startups.
Now, MassVentures is going all in on "deep tech."
"We wanted to focus on deep tech because we think there's going to be a lot of it, and we want to help with the flow of federal dollars into Massachusetts in supporting deep-tech innovation," said Charlie Hipwood, the agency's president and CEO. "We look at it as a way for MassVentures to make Massachusetts a deep-tech hub and funnel a lot of the federal dollars coming there through the National Science Foundation and others."
MassVentures includes advanced manufacturing, advanced materials, artificial intelligence, health security, blockchain, robotics, photonics, electronics and quantum computing under the deep-tech umbrella.
To advance startups in those verticals, the agency advises and manages programs with the Massachusetts Clean Energy Center, the Mass Life Sciences Center Seed Fund and the Massachusetts Association of Tech Transfer Offices. The Massachusetts Technology Transfer Center was folded into MassVentures in August.
Capital gaps
Hipwood thinks deep tech is an area that is ripe for investment, particularly because it has been historically underfunded. He notes that VC investors looking for a quick return on investment are not likely to fund deep-tech startups, which require more time and money than other tech verticals.
"If you think about capital gaps, which is what we're meant to identify, there's a huge capital gap for seed-stage deep tech," Hipwood said.
Deep tech also stands out from internet-enabled businesses and software startups, Hipwood said, because the industry is by nature collaborative. Many deep-tech founders come from the academic world, as well as organizations like the Broad Institute and the Wyss Institute, and are used to working closely with their colleagues. That sense of community could provide opportunity to stand up new startups in the Boston area.
This year, Hipwood and his team have big plans to grow their investment in Massachusetts. The MassVentures team grew from three full-time and two part-time employees last February, when Hipwood took over as CEO, to six full-time and three part-time employees by the end of 2020. MassVentures plans to fund 50 companies in 2021, either through direct investment or through its grant programs.
The agency also plans to provide "10 times" the amount of technical assistance it did last year, Hipwood said. Much of that will be done through a program called MassVX, which matches academic spinouts with seasoned entrepreneurs. MassVentures will also ramp up its SBIR Targeted Technologies program, or START, which is designed to help local companies that have received Small Business Innovation Research (SBIR) grants establish a long-term presence in the state.
"We're focusing on deep tech because that's going to be the next 10 to 20 years in Massachusetts," Hipwood said. "The people who are developing here are what will be artificial intelligence and quantum computing going forward."
