A Newark-based venture capital fund that was launched with fanfare last year has now raised enough money to begin investing in technology startup firms willing to set up shop in the heart of New Jersey’s largest city.
With $23 million now in the bank, Newark Venture Partners (NVP) announced last week that it can begin taking applications for its new accelerator program, which will provide fledgling companies with well-equipped workspace, $80,000 in initial funding, and a chance for further investment of up to $1 million.
The fund was founded by Don Katz, the chief executive of Audible, an Amazon subsidiary that’s also located in Newark. Other partners include Newark-based Prudential Financial and Short Hills analytics firm Dun & Bradstreet, as well as individual investors.
The announcement from NVP that it was able to raise nearly half of the fund’s $50 million goal in less than a year is the latest positive signal for the city, which has worked hard in recent years to make over its downtown and the surrounding area with a focus on technology and innovation. And it also comes as first-term Mayor Ras Baraka continues to press for a “Newark 3.0” rooted in tech businesses and higher education.
With a boost from state corporate-tax incentives Panasonic moved its headquarters to Newark in 2013. And a groundbreaking was held last year for a major mixed-use redevelopment project centered around the former Hahne & Co. department store building on Broad Street; a Whole Foods supermarket is planned to serve as the site’s anchor.
There are also roughly 3,000 new lofts and apartments being built in the area as part of a broader, $2 billion Newark construction boom.
Katz, who brought Audible’s headquarters to Newark in 2007, said in a statement that NVP serves as “an extension of Audible’s commitment to Newark’s continued turnaround.” He also will be making company employees available to serve as mentors to the startup firms coming through the fund’s accelerator program, which will be based in 25,000 square feet of space in the same building as Audible at One Washington Park next to the Newark Public Library.
The workspace for the accelerator program — provided on a rent-free basis by Rutgers Business School — will also give startups extremely powerful internet connections and access to Amazon’s cloud services, explained managing partner Thomas Wisniewski in an interview with NJ Spotlight.
That type of technology stands out, especially in a New York region that often offers businesses paltry internet bandwidth, and it should be particularly attractive to startups focused on areas like data, video, and telemedicine, he said.
“We are going to be enabling that next set of businesses that can’t exist today because they’re going to need that higher bandwidth,” Wisniewski said.
The companies will be able to connect with nearby schools like Rutgers and New Jersey Institute of Technology for interns eager to get hands-on experience, he said.
The accelerator program will also give startups and their employees a chance to check out the city and possibly choose to locate there once they’re ready to expand.
“Our business is making it so great here that people aren’t going to want to leave,” Wisniewski said. He pointed out that Newark is well-situated given its existing technology infrastructure, transportation links with New York and an international airport, as well as relatively low housing costs.
While New Jersey is not really known for venture capital — it’s a multibillion sector of New York’s economy — putting the name of the state’s largest city in the Newark Venture Partners title was no accident, Wisniewski said. “Newark is a part of what we’re doing and we do think it’s distinctive. It’s part of our core mission and we don’t shy away from it.”
Mayor Baraka, who called Audible and Katz “visionaries,” said, “An important part of our vision for the future of Newark is to encourage the evolution of the city as a technology hub.” He added, “When we speak of Newark 3.0, we are talking about our technology businesses, our college and universities, city government, the downtown business community, and our community leaders working collectively to achieve that goal.”
“Technology will be a driver of the prosperity of Newark and the creation of good-paying jobs for our residents,” he said. “Newark Venture Partners is an important element of our collective strategy.”