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Tuesday, September 19, 2017

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The Big One

A breakdown on the day’s biggest Inno story.

Lucy: MIT’s grand experiment in high-tech startup investing has officially begun.

On Tuesday, the Massachusetts Institute of Technology revealed the first seven “hard tech” startups to receive investments from The Engine, MIT’s new $200M venture fund that also acts as a startup accelerator. The goal is to accelerate the development of resource-intensive, groundbreaking technologies that traditional venture capital often neglects — a topic that was explored in MIT President Rafael Reif’s 2015 call for “innovation orchards.”

Dylan: The focus of The Engine’s investments is “hard tech,” The Engine CEO Katie Rae said in a conference call yesterday, which means physical technologies, often augmented by a layer of software, that take longer to commercialize and often require expensive equipment to develop. The startups cover industries and categories like energy, advanced materials, artificial intelligence and biotech.

One of the companies, Kyptopen, for example, is developing a technology that can speed up the process of genetic engineering by 10,000 times, Rae said, which can have major implications on how fast new drugs can be discovered.

All seven startups are Boston-based, which Rae said is a requirement for The Engine’s portfolio companies because of the region’s strong track record of working on hard problems. Rae said it’s also important to continue building a strong tech cluster in Boston.

Lucy: When it was first announced last October, The Engine was targeting to raise $150M for its first fund, but it ended up closing with $200M from investors instead, Rae said. While traditional venture funds have a 10-year cycle for when investors expect a return, Rae said The Engine fund’s life cycle will be 18 years.

In addition to the funding, all seven startups will receive office and lab space, as well as expensive equipment for rental at The Engine’s headquarters at 501 Massachusetts Ave. in Cambridge. The startups will receive a number of other resources, including access to corporate and community partners, MIT alumni and experts in tough tech sectors, which Rae said can help with things like commercialization and customer pilots. Rae said The Engine will announce its first 14 corporate and community partners at a later date. Read more: Meet the First 7 ‘Hard Tech’ Startups in The Engine’s $200M Fund

Making Moves

Inside the people, companies and organizations making moves today.

Dylan: With Apple’s release of iOS 11 today, Wayfair’s bet on augmented reality is starting to pay off. If your iPhone or iPad has iOS 11, your Wayfair app can now use AR to let you preview 3D models of furniture in your home. Read more: Wayfair’s New AR-Powered iPhone App Lets You Preview Furniture in 3D

Lucy: These are good times for Catalant, the consultant marketplace provider that’s among the sponsors of the upcoming Forbes Under 30 Summit. In June, the company not only closed a $41M investment, but also moved to a new office in Fort Point. My camera and I went to take a look and two things impressed us: a wellness room, where employees can sit in the dark and take naps, and the library, where people can work in complete silence. Read more: Office Envy: Inside Catalant HQ, a 100% Open Office With a Wellness Room for New Moms

Dylan: We now know a little more about Wondermile, the stealthy retail tech startup co-founded by Fashion Project founder Anna Palmer and former Catalant executive Brian Kalma. The startup’s website says Wondermile will help you find items in stores near you, buy across multiple stores with one checkout and keep an eye out for discounts and new products. It says it can also deliver items for you to try on at home. Color us intrigued!

Lucy: Three Boston-area companies – MobioSenseWater Hero and Dozop – have been selected as finalists in a $5M international startup competition named 43North. They will be pitching to a panel of business leaders and investors on October 5 in Buffalo.

In The Know

The Inno stories you need to read today.

How Bayer and Ginkgo Teamed Up in a $100M Synthetic Biology Bet [Xconomy]

The Unkeepable Secret of Smarter Companies (It’s Intangible Capital) [BostInno]

Venture-Capital Group Sues Trump Administration Over Immigration Rule [Wall Street Journal]

Walsh: Boston will keep Amazon bid secret until submission [Herald]

New Money

Your daily funding roundup.

Lucy: Besides The Engine’s announcement, we have three other funding items to share. First, Humatics announced it has closed an $18M Series A funding round with participation of Boston-area investors Fontinalis Partners, Tectonic Ventures and Analog Devices co-founder Ray Stata, as well as Lockheed Martin Ventures, Airbus Ventures and Presidio Ventures. The company is developing microlocation technology that can enable things like close collaboration between humans and robots,

Dylan: Two more items:

Threat Stack, a cybersecurity startup focusing on threat intelligence in the cloud, has raised a $45M Series C led by F-Prime Capital Partners, with participation from Eight Roads Ventures, Scale Venture Partners, .406 Ventures and Accomplice. CEO Brian Ahern told me the funding will be used to expand the company’s team from 100 to 120 by the end of the year, accelerate product development, expand to larger enterprise customers and eventually start chasing customers in the federal government space.

Cygilant, a Boston cybersecurity startup formerly known as EiQ Networks, raised a $7M round led by Arrowroot Capital.

Player Personnel

Who’s moving where.

Lucy: We have a lot of personnel moves to get through today. I’ll start off with the first three:

— appointed George Bell as the lead independent director of its board. Bell was formerly the CEO of Jumtap.

— Inderpal Bhandari, global chief data officer at IBM, joined the board of directors of Boston’s Swoop. He previously held executive positions with Cambia Health SolutionsExpress Scripts and Medco.

— Jay Jamison is the new SVP of strategy and product at QuickBase. Recently, Jamison served as VP of strategy for Hewlett-Packard Enterprise.

Dylan: Now for the… four other announcements. *takes deep breath*

ClimaCell is hiring Daniel Rothenberg, an atmospheric scientist at MIT, as its new director of meteorology. Also, for one of yesterday’s items, the company mistakenly said that its co-founder Itai Zlotnik will now act as chief scientist. His actual role is chief vision officer.

Zipcar added Jeff Prus as its new VP of product and experience. He was previously head of product management and experience design at Intuit, where he worked on QuickBase, which the company divested last year.

DataRobot hired Sean Gardiner as its EVP of business development, CRN reported. Gardiner previously held channel sales roles at Alteryx and Dell.

55 Institutional, an investment science and technology firm, hired Paul Gamble as its new CEO. Gamble, who will split his time between Boston and New York, was previously EVP at Financial Engines.

In The Community

The events and happenings to know about tonight and this week.

Lucy: Party alert. HubSpot for Startups is hosting its official Inbound party on Wednesday, September 27, at District Hall in the Seaport. Tickets are free.

HUBweek: What do nuTonomy, Desktop Metal and Rapid7 have in common? You guessed it–you can catch their CEOs at HUBweek’s Future Forum, presented by MilliporeSigma this October 13. New speakers have been added to the Friday lineup where Boston innovators will explore innovations coming out of Boston that will impact our future–from robotics and digital health to autonomous vehicles and the de-extinction of the woolly mammoth. Curious? Get the details here.

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Meet The Authors

Dylan Martin:

Lucia Maffei

Kyle Gross

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