Pelaez is the co-founder and CEO of Cyvl.ai (pronounced “civil.ai”), a Somerville company that uses 3D software and artificial intelligence to help municipalities manage potholes and other infrastructure projects. Strobach is the co-founder and CEO of AeroShield materialsa Boston company that uses an innovative material to develop super-insulating windows.
Pelaez and Strobach were among the first three deals MassVentures, the state’s venture capital arm, recently completed from its new $30 million fund for high-tech startups with a focus on underserved founders or those based in underserved areas outside of the Boston-Cambridge area.
The companies represent what the state might be known for in the startup world: a place where the next generation of diverse founders can get support and seed capital to launch “deep tech” ventures. These are the companies who use scientific and technical breakthroughs to disrupt or create new markets.
“We want to do cool things that have a big impact,” said Strobach, who grew up in rural Wisconsin. “The minute I first visited Massachusetts, I really felt like, ‘Wow, this is a place where this can happen.’ “
MassVentures, founded more than four decades ago, finds itself with a record injection of cash, thanks to the US Treasury’s Small Business Credit Initiative. The program – which was rolled out in 2010 as the country recovered from the Great Recession – received a $10 billion boost in the federal pandemic program. This side, Massachusetts received nearly $169 million promote small business growth and entrepreneurship.
Two other quasi-state agencies – MassDevelopment and Massachusetts Growth Capital Corporation (MGCC) – also received money. MassDevelopment, which received $62 million, plans to expand economic development loan and loan guarantee programs. The MGCC, which received $76.5 million, will strengthen its commercial loan program and create a new community loan fund guarantee program.
Charlie Hipwood, CEO of MassVentures, said the additional funding will allow his team to complete and lead more investment rounds.
“We get regular contact from entrepreneurs, and I’ve seen as much activity as we’ve ever seen with people trying to start businesses,” Hipwood said.
He said he sees people moving to Massachusetts to start their businesses because the resources and talent are there to start new businesses.
“During the pandemic, a lot of people have looked and said, ‘We should be creating things that help solve society’s biggest problems,'” Hipwood added, “and a lot of those things are being created here in Massachusetts. .”
MassVentures’ mission is to help new founders turn early-stage research and innovations into viable commercial uses. In particular, MassVentures has supported underrepresented entrepreneurs, with 48% of its portfolio companies having at least one female founder, black or Latina. It also aims to spread the wealth with 44% of its investments located outside of the Boston-Cambridge area.
Among his best-known investments is Ginkgo Bioworks, a Boston-based synthetic biology company that released last year. MassVentures was one of his early contributorsgiving the diverse team of founders a series of grants in 2013.
With its new deep-tech fund, MassVentures plans to invest in six to eight companies in the coming months. In the same way Cyvl.ai and AeroShield, MassVentures funded JetCool, a Littleton-based company that specializes in liquid cooling computer chips to help data centers reduce energy and water consumption. JetCool, founded in 2019, is based on technology from MIT’s Lincoln Laboratory.
AeroShield was also funded by another quasi-state authority, the Massachusetts Clean Energy Center (MassCEC), from when the founders were still at MIT.
Strobach, co-founder and CEO, launched AeroShield in 2019 with two other graduate students while pursuing her doctorate in mechanical engineering. They saw commercial applications for a super insulating solid called airgel while working in an MIT lab. They decided to focus first on creating more energy efficient windows. The material, a transparent sheet of porous glass, can be fixed inside new windows to double their thermal efficiency.
MassCEC led AeroShield latest round of seed funding, raising $4 million with MassVentures and other investors. The Hyde Park company, which has 11 employees, plans to more than double its workforce and open a new manufacturing facility in the area.
For Cyvl.ai, MassVentures led its current seed funding round, raising $2.7 million, alongside other local investors including Hub Angels and LaunchPad Venture Group. The money will Cyvl.aibased at Greentown Labs in Somerville, to hire more employees and improve its technology.
A company built around infrastructure management was born after Pelaez, CEO and co-founder of the company, spent one of his college summers on the road crew of a public works department in Connecticut. He was struck by the fact that the municipality did not have a complete database of what needed fixing.
Pelaez thought it might be a common problem, so the electrical and computer engineer spent his first year driving around Massachusetts, interviewing public works directors to better understand how infrastructure management could be improved.
Along with three WPI co-founders, Pelaez began raising funds and launching its first pilots in 2021. Today, Cyvl.ai has partnered with civil engineering companies and its technology has been used in approximately 50 municipalities around the world. northeast.
Not lost on Pelaez, whose father is Colombian and mother is Armenian, this is the opportunity MassVentures is offering to him and other various founders. Thinking about it, Pelaez said he has yet to meet a Latino venture capitalist or many Latino founders.
“My plan after that is to figure out how I can give back as well,” Pelaez said. “That’s sort of my larger future goal.”
Shirley Leung is a business columnist. She can be contacted at email@example.com.