The fund will seek to invest in high-potential physical product startups that participate in mHUB’s Accelerator for industry demand-driven innovations.
mHUB, a leading independent hardtech and manufacturing innovation center, announces the first closing of mHUB Product Impact Fund I, LP (the “mHUB Product Impact Fund”). mHUB Product Impact Fund will seek to invest in seed and early-stage hardtech companies in the United States, with a focus on startups building and growing demand-driven technologies in industries such as the Industrial Internet of Things (IIoT), medical devices, connected buildings and home, communication technologies, smart cities, smart mobility, and energy technologies.
The mHUB Product Impact Fund has secured over $5 million in commitments from investors in the manufacturing, private equity, technology and venture capital industries, as well as from regional serial entrepreneurs. With a goal of raising a total of $15 million, the mHUB Product Impact Fund will seek to invest in companies that participate in mHUB’s soon-to-launch, hardtech accelerator program, which will put cohorts of eight-to-ten high-potential and industry-aligned startups through a six-month, hands-on incubation program focused on product engineering and design, business and leadership development and customer development.
One fund investor, Sam Zell, an entrepreneur, founder and chairman of investment firm Equity Group Investments, stated, “mHUB is addressing a highly relevant industry today that is in need of accelerated innovation and growth, particularly in Chicago. Demand-driven hardtech drives manufacturing capacity and expansion, which helps fuel the economy.”
The mHUB Product Impact Fund is designed to narrow what mHUB believes to be a gap in funding for hardtech startups. mHUB has observed that when compared to digital technologies, particularly in pre-Series A companies, hardtech startups experience a 15:1 disparity in early-stage investment. Meaning, for every $15 invested in software and other digital startups, just $1 is invested into hardtech startups. mHUB believes it is important to even that imbalance and make smart manufacturing better, stronger and more efficient, especially as the nation turns to the manufacturing sector to grow, create jobs and address the needs of workers and consumers amid the COVID-19 pandemic and the longer-term economic recovery.
While seeking to drive strong returns for investors, the fund also intends to create impact for mHUB’s non-profit mission to develop an entrepreneurial ecosystem around physical product innovation and accelerate industry growth by cultivating a community of collaboration. Currently, the mHUB non-profit supports more than 270 physical product startups that are building their businesses at the Chicago-based innovation center.
“As we move into the Fourth Industrial Revolution and devices and processes become ‘smart,’ hardtech investment is regaining its appeal, driven by strong market demand and a renewed push for U.S.-based manufacturing,” said Haven Allen, chief executive officer and co-founder of mHUB, and a managing partner of the mHUB Accelerated Incubation, LLC, the Fund’s investment manager.
“By capitalizing on mHUB’s resources, expertise, and vast industry network, we believe there is an enormous opportunity to accelerate the path to market for demand-driven physical products solutions that create strategic and attractive investment opportunities for our partners,” added Allen.
In addition, the fund is expected to strengthen mHUB’s ability to connect startup companies to much-needed capital sources and to other resources such as prototyping and manufacturing equipment, high-skilled engineering talent, and broad entrepreneurial and technical training opportunities.
“I am a big believer in supporting early technology innovation and excited by the prospect of empowering the next generation of manufacturing leaders here in Chicago,” said mHUB Product Impact Fund I limited partner Jim Perry, co-founder and managing director of Madison Dearborn Partners.
“The mHUB Product Impact Fund will support promising hardware entrepreneurs from across the country who will be attracted to the potential to accelerate their businesses through mHUB and the connections mHUB will make to regional corporate leaders and investors. Leadership in manufacturing innovation can be a huge driver of new job and wealth creation, which the Midwest so very much needs,” said Perry.
The mHUB Product Impact Fund received early support from the U.S. Department of Commerce Economic Development Administration through the Regional Innovation Strategies (RIS) Program. This program’s goal is to build regional capacity that translates innovations into jobs through the formation, launch, and growth of early-stage seed capital funds.
“We are at an inflection point for Industry 4.0 and IIoT is a key enabler,” said Karen Kerr, general partner, Exposition Ventures, and mHUB board member. “The mHUB Product Impact Fund will accelerate the best teams from across the country who are driving the next industrial revolution,” Kerr added.
Investor and serial entrepreneur Mark Tebbe and global investment banker and former City of Chicago Deputy Mayor Steve Koch, both long-time LPs in multiple funds, join as managing partners of mHUB Accelerated Incubation, LLC, the Fund’s investment manager.
The fund’s first close will be followed by the launch of a national campaign to identify and select mHUB’s first accelerator cohort, which is focused on IIoT. mHUB will formally announce in the coming weeks the opening of the IIoT program and the submission window for startup companies to apply. Teams will be chosen and onsite for the first cohort in early 2021. The IIoT program will be followed by a medical technology cohort which will open applications shortly thereafter. Look for news on www.mhubchicago.com for additional cohorts, which will be opening every six to nine months.
Applications are now open for the mHUB Accelerator’s IIoT Cohort
mHUB is a leading independent hardtech and manufacturing innovation center that exists to convene the entrepreneurial ecosystem around physical product innovation to ensure that the manufacturing industry continues to accelerate, grow and thrive. The mHUB community includes over 428 active and alumni startups and small businesses supported by a deep talent pool of product designers and developers, entrepreneurs, engineers and manufacturers, corporate leaders, industry experts, mentors and investors. mHUB provides a hyper-resourced environment to entrepreneurs with the goal of commercializing new hardtech innovation that will lead to new businesses, intellectual property, investment, revenue and job creation. Since launching in 2017, the mHUB community has generated more than $430M in revenue, launched more than 1,256 products, hired more than 2,153 employees, and raised nearly $702M in capital.