Peláez is 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 co-founder and CEO of AeroShield Materialsa Boston company using an innovative material to develop super-insulated windows.
Pelaez and Strobach were among the first three deals MassVentures, the state’s venture capital arm, recently struck with its new $30 million fund for deep-tech startups with a focus on underserved founders or those based in underserved regions. 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 money to launch “deep tech” companies. These are the businesses that use scientific and engineering advances 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 moment I first visited Massachusetts, I really felt like, ‘Wow, this is a place where that can happen.’ “
Founded more than four decades ago, MassVentures is riding high on a record infusion of money, thanks to the US Treasury State’s Small Business Lending Initiative program, which was launched in 2010 when the country reeling from the Great Recession, it got a $10 billion boost in the federal pandemic package. Of that, Massachusetts received nearly $169 million to promote small business growth and entrepreneurship.
Two other quasi-state agencies, MassDevelopment and the Massachusetts Growth Capital Corporation (MGCC), also received money. MassDevelopment, which received $62 million, plans to expand the economic development loan and loan guarantee programs. MGCC, which received $76.5 million, will boost its commercial loan program and create a new community loan fund guarantee program.
Charlie Hipwood, chief executive of MassVentures, said the additional funding will allow his team to make and lead more investment rounds.
“We get contact from entrepreneurs on a regular basis, and I’ve seen as much activity as ever with people trying to start businesses,” Hipwood said.
He said he’s seeing people move to Massachusetts to build their businesses because the resources and talent are here to get new businesses off the ground.
“During the pandemic, a lot of people 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 focused on helping first-time founders turn early-stage research and innovations into viable business uses. In particular, MassVentures has supported underrepresented entrepreneurs, with 48 percent of its portfolio companies having at least one female, black or Latina founder. It also aims to spread the wealth with 44 percent of its investments located outside of the Boston-Cambridge area.
Among his best-known investments is Ginkgo Bioworks, a Boston synthetic biology company that went public last year. MassVentures was one of his early backersawarding 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. With cyvl.ai and AeroShield, MassVentures has provided funding to jet cool, a Littleton company that specializes in liquid cooling of computer chips to help data centers reduce energy and water use. JetCool, founded in 2019, is based on technology that emerged from MIT’s Lincoln Laboratory.
AeroShield has also been funded by another quasi-state authority, the Massachusetts Clean Energy Center (MassCEC), started when the founders were still at MIT.
Strobach, co-founder and CEO, started AeroShield in 2019 with two other graduate students while pursuing her PhD in mechanical engineering. They saw commercial applications for a super-insulating solid called airgel while working in a lab at MIT. They decided to focus first on creating more energy efficient windows. The material, a transparent sheet of fritted glass, can be placed inside new windows to double their thermal efficiency.
MassCEC led AeroShield latest round of seed funding, raising $4 million along 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 region.
For cyvl.ai, MassVentures led its current round of seed funding, raising $2.7 million, along with other local investors, including Hub Angels and LaunchPad Venture Group. The money will allow cyvl.aibased at Greentown Labs in Somerville, to hire more employees and improve its technology.
A business built around infrastructure management sprang up after Pelaez, the company’s CEO and co-founder, spent one of his college summers on the highway crew for a public works department in Connecticut. He was struck by how the municipality did not have a complete database of what needed to be fixed.
Peláez thought this might be a common problem, so the electrical and computer engineer spent his junior 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 money and launching his first pilots in 2021. Today, Cyvl.ai has partnered with civil engineering companies and its technology has been used in some 50 municipalities in the Northeast.
Peláez, whose father is Colombian and his mother is Armenian, is not missing out on the opportunity that MassVentures is providing to him and several other founders. Come to think of it, Peláez said, he has yet to meet any Latino venture capitalists or many Latino founders.
“My plan after this is to figure out how I can give back as well,” Pelaez said. “That’s my biggest future goal.”
Shirley Leung is a business columnist. You can reach her at [email protected].