Newark’s Tech Ecosystem Rises5 minute read
In downtown Newark, a scene from HBO’s Silicon Valley plays out as a handful of potential tech stars jam around a monitor offering up ideas and barbs while one of their own polishes a deck ahead of a major investor pitch. They’re among 70 founders and 26 companies that are part of Newark Venture Partners, an independent early stage venture fund, started by Audible founder Don Katz nearly two years ago as a way to nurture the tech pipeline, spur job growth and the economy in Newark, NJ.
Today Newark Venture Partners, known locally as NVP, counts as investors Panasonic Corp. of North America, Prudential Financial, Dun & Bradstreet and other global brands. Already two of its portfolio companies’ founders were announced as finalists for Ernst & Young’s Entrepreneur of the Year award for New Jersey, and another founder was tapped by Inc. as one of the 30 under 30 coolest young entrepreneurs.
Now the startup crew is preparing for June 27, one of two “Demo Days” NVP holds yearly at the Prudential Center. To learn more on how mashups between large and small companies can spur business growth and economic vitality, we connected with Audible & NVP founder Don Katz and Panasonic Corp. of North America Chairman and CEO Tom Gebhardt to explore venture capital, disruptive technology and Newark’s tech scene. Highlights follow.
Q: What tech challenges does Newark face and how is Newark Venture Partners helping to address them?
Don Katz: Newark is poised for a tech-driven renaissance, with 26 miles of dark fiber underground, major transportation advantages, including trains reaching Midtown Manhattan in 18 minutes, and the youth energy and unrealized entrepreneurialism of thousands of first-generation college students in the city. But to make Newark more attractive to young entrepreneurs over places like Brooklyn, we need to move past our focus on the glass and steel walls that keep people from hitting the streets and sap downtown of its vitality after 5 p.m., and instead focus on neighborhood-creation and increasing the diversity of streetscape in the city with new places to live, shop, dine and play.
NVP was founded from the start with a double bottom-line mission: in addition to delivering strong returns for our investors, it would also measure success by the jobs, taxable revenue and foot traffic generated for the city. The companies are embracing Newark — some of the founders are seeing how special it is to be here and moving here and hanging out at places like Barcade, the hip bar from Brooklyn across the street from the building Audible, NVP and Rutgers Business School share. NVP, in concert with new places to live, work and play that are coming online by the week, and political leaders pursuing forward-looking policies that focus on high-growth tech companies like those at NVP, can unleash Newark’s tech sector and make the city a hub for innovation once again.
Q: What’s the impact of Panasonic’s contribution?
Don Katz: I’m really proud of Newark Venture Partners’ traction since its first class launched nearly two years ago, and Panasonic’s commitment, made possible by Tom’s visionary leadership, boosts NVP’s momentum and cements its status as a seedbed for a new generation of young growth companies in Newark. It has already attracted visits from elite VCs and applications from more than 2,000 startups around the world. A tremendous draw for the companies has been the expertise our corporate LPs offer across industries, because companies no longer need as much capital to get off the ground — they want expertise, they want coaching to help them reach the next level.
Q: What unique role do you see Panasonic playing in Newark Venture Partners?
Don Katz: Beyond Panasonic’s capital commitment, opening the deep and far-reaching expertise of its employees, who are doing pioneering work by the day in avionics, electric vehicle batteries and many other areas, will provide the founders and employees with the kind of nurturance that young companies need. Audible’s 280 specialists, with skills ranging from the 12 kinds of network architecture to the 13 kinds of go-to-market strategies, take the elevator down to coach these companies in the state-of-the-art 25,000-square-foot, 10G ultra-bandwidth accelerator, and our other corporate LPs — RWJBarnabas, Prudential, Dun & Bradstreet, Horizon, Panasonic and TD Bank — are also hands-on in helping these companies generate business development ideas. I think Panasonic’s employees will find it energizing to work with these amazing founders.
Q: Panasonic has invested in startups all over the world, why Newark Venture Partners and why now?
Tom Gebhardt: We are heavily invested in VC activity in Silicon Valley and the West Coast. I saw a significant void in the East and saw investing in Newark Venture Partners as a meaningful experience for our employee base.
Q: What do you mean by a meaningful experience for employees?
Tom Gebhardt: It’s all part of a major business transformation. This year Panasonic Corp. turns 100. And next year Panasonic marks 60 years of doing business in North America. Over the last decade, Panasonic has changed our focus from mainly on the home to focus more on the automobile, the aircraft and other business spaces. Panasonic in North America has led the way and sees success today and future growth in automotive, avionics and connected services and software.
Q: What’s the connection between NVP and disruptive technologies?
Tom Gebhardt: Much has been written about the leading 10 disruptive technologies that are expected to generate trillions of dollars in value. Panasonic is deeply engaged in most of these technologies, and we believe that shaping them into integrated solutions is the key to creating entirely new experiences. For much of its history, Panasonic has grown organically and that has worked great. But with the pace of change brought about by disruptive technologies, we see the need to engage the startup culture in new ways to give employees a way of making things happen differently. I believe exposure to teams at Newark Venture Partners, and new ways of thinking will lead to new ways of doing business. It also builds on our mission of coming to Newark to be part of the ongoing revitalization. This opportunity to help create an innovation pipeline in our backyard is really exciting.