Hardware Startups Look to China

Shenzhen, China, is a long way from Silicon Valley. But for startups that want to create the next iPhone, it may be the best place to get their businesses off the ground.
That’s the thinking behind Haxlr8r, a new hardware-focused startup accelerator that is about to begin its first round of incubation by investing in nearly a dozen startups making hardware ranging from electronic toys to a device that manages household energy usage. Created by venture capitalist Cyril Ebersweiler, the program will provide seed funding along with a three-and-a-half-month program that will introduce startups to factory and industry contacts and offer guidance.
Most of the Haxlr8r program will take place in China, since access to local factories should make hardware development cheaper and easier, though the tail end, which includes a demo day to show off the companies’ products to investors, will be set in the Bay Area.
Haxlr8r’s launch comes at a propitious time for hardware entrepreneurs. Traditionally, creating a hardware company is very time-consuming and expensive, and startup incubators have mainly focused on software development, which is typically far cheaper and faster. But cheaper electronics components, crowdsourced funding platforms like Kickstarter, and the popularity of 3-D printers and DIY electronics kits like Arduino and Adafruit make the idea of building a physical electronic product seem more within reach. "I think we’re at a very exciting moment," Ebersweiler says.
Ebersweiler is a partner in the venture capital firm SOSventures, which already runs a China-based startup accelerator, Chinaccelerator, out of the northeast Chinese city of Dalian. But Chinaccelerator focuses on helping Chinese founders build nonhardware companies. Ebersweiler feels that China’s position as a leader in electronics manufacturing makes it the perfect place to start a program that concentrates on hardware startups.