The Engine, the venture firm founded by MIT in 2016 to support “tough tech” companies, today announced it has raised $230 million in its second round of funding, and will begin making investments in additional startups focused on conceiving and commercializing solutions to some of the world’s most pressing challenges.
MIT provided $25 million in anchor funding for The Engine’s Fund I, which exceeded its original goal of raising $150 million to close at over $200 million in 2017. MIT is investing $35 million toward this new round of funding, The Engine Fund II. MIT’s contributions to The Engine are part of an overall portfolio of investments intended to generate returns for the Institute’s general operating budget and cultivate the Cambridge innovation ecosystem. Funds are released over time as investments are made in tough tech companies.
Harvard University joins MIT as a limited partner in The Engine’s second round of funding, furthering The Engine’s mission to provide capital and access to talent and vital specialized infrastructure for tough tech entrepreneurs.
The Engine’s tough tech-focused mission was first outlined by President L. Rafael Reif in a 2015 op-ed in The Washington Post. The Engine was created not only to bring world-changing technologies to life, but also to cultivate the region’s innovation ecosystem, cementing the Boston area as an international hub for tough tech.
“We launched The Engine to help young companies focused on tough tech challenges that have the potential for enormous societal impact. Our aim was to provide them with a new model of sustained assistance and an ecosystem of talent, expertise, and support to speed their progress,” President Reif says, “so we are truly thrilled that Harvard has joined us in this mission.”
To date, The Engine has invested in 27 portfolio companies tackling climate change, human health challenges such as Covid-19, and pioneering advanced systems. Significant advancements of the companies stemming from The Engine’s initial investments include scientific proofs of concept and research publishing; product development and customer pilots; and follow-on funding and new intellectual property and patent filings.
Companies addressing public health needs
Biobot Analytics, a wastewater epidemiology company, has deployed its Covid-19 monitoring platform to hundreds of communities across the U.S. – including in the Boston area – to help them track the scope of the disease. The startup initially piloted its platform to monitor opioid use to help local public health efforts, but quickly pivoted as the Covid-19 pandemic spread across the country.
“Our investment came amidst the pandemic, and in the first three months after we engaged with The Engine, we scaled from five employees to 15, from eight customers to more than 100,” says Newsha Ghaeli, co-founder and president of Biobot. “This rapid scaling to shift our focus from opioids to Covid-19 wouldn’t have been possible without the day-to-day operational support, deep expertise in niche areas like government, and resources The Engine gave us.”
Engine-supported companies E25Bio and C2Sense are also working on Covid-19 testing platforms. Vaxess Technologies has recently released specifications for a Covid-19 single-dose, shelf-stable vaccine patch.
Startups tackling energy and climate change
Form Energy, based in Somerville, Massachusetts, was one of The Engine’s first investments in 2017. Today, the company is also backed by Bill Gates’ Breakthrough Energy Ventures, and has reached major milestones on its journey to create a long-duration energy storage platform that promises to make renewable energy accessible on demand. This spring it announced a customer pilot with a Midwest utility to enable its transition to a renewable electricity grid.
“The Engine’s investment team made the first financial vote of confidence in our idea, and has invested in all three subsequent financings since,” Form Energy cofounder, president, and COO Ted Wiley says. “The Engine has also brought substantial new investors … resulting in over $100 million in capital raised to date over the past three years.”
Other Engine investments making progress toward carbon-free energy sources include Commonwealth Fusion Systems (CFS), a startup working to commercialize fusion energy, which has received a total of over $200 million in investments to help bring its high-temperature superconducting magnets and SPARC fusion system to life. CFS recently published seven papers in the Journal of Plasma Physics that validated its approach. Another company, Quaise, born from research at the MIT Plasma Science and Fusion Center, is hoping to harness limitless supercritical geothermal energy through a unique hybrid deep-drilling technology involving gyrotron-generated electromagnetic waves. Finally, Boston Metal harnesses technology spun out of Professor Donald Sadoway’s lab to create metals like steel without carbon dioxide emissions.
Helping tough tech in advanced systems
Sync Computing, a startup born out of Lincoln Laboratory, is pioneering the world’s first optimization processing unit (OPU) that could provide a solution to stubborn optimization challenges.
It’s an “algorithm in hardware form,” Sync Computing co-founder Jeff Chou says, adding: “The Engine is unique in its understanding of the timelines, resources, and eventual payoff required to develop a hardware-based company.”
Other companies receiving support from The Engine have included HyperLight, which has created new fabrication processes and designs for lithium niobate modulators with technology first developed at Harvard, and Zapata Computing, a startup that recently released its Orquestra platform to give enterprise teams the power to compose, run, and analyze quantum computing workflows at scale.
Support that extends beyond capital
MIT’s commitment to The Engine includes support for infrastructure, access, and alignment on diversity and inclusion. MIT continues to support the innovation ecosystem in and around Kendall Square through The Engine’s expansion project at 750 Main Street in Cambridge. When completed, the building will house 100 companies and 1,000 people, along with labs, office and maker space, fabrication facilities, and more. The project is expected to be completed in 2022.
The Engine has established programming efforts to engage and inspire the innovation ecosystem throughout the Boston area and beyond. Its yearly Tough Tech Summit attracts hundreds of investors, entrepreneurs, founders, policymakers, and academics to help forge a path for tough tech commercialization. Additional collaboration with MIT includes involvement with the STEX25 accelerator within the MIT Startup Exchange and the MIT Industrial Liaison Program (ILP).
“MIT was first to acknowledge that tough tech startups have largely been underfunded and underserved, and we continue to be incredibly grateful for MIT’s vision and its ongoing support of our mission to bring these innovations to the world,” notes Katie Rae, CEO and managing partner of The Engine.