Shenzhen Valley Ventures has a new incubator for hardware startups

Shenzhen Valley Ventures in Palo Alto, Calif. is launching an incubator for hardware startups in partnership with one of its largest limited partners, Zowee, a factory that works with hardware giants like Xiaomi Technology Co. and Samsung Ltd.

Zowee’s Shenzhen facility includes unique prototyping and manufacturing equipment, and testing labs for electromagnetic interference and compatibility, and reliability, among other things.

Shenzhen Valley Ventures previously made investments from two funds, one which backs hardware companies anywhere in the world, and another that backs startups exclusively based in China.

The new SVV incubator will invest $50,000 to $300,000 of early-stage capital into startups that it accepts into its ranks. Each startup in the program will have four full-time engineers, employees of Shenzhen Valley Ventures, at their disposal.

Shenzhen Valley Ventures’ principal, Diane Ding, said hardware companies face steeper barriers to entry than software companies but haven’t had as much help as those companies.

“Seed or angel rounds of $1 million or $2 million that could get a software company to a point where Series A investors want to invest in it, those are not enough to get hardware companies through a pilot run, tooling, injection moulding and more,” she said.

The SVV incubator seeks companies that have already gotten through a few iterations of a hardware prototype and have figured out what customers want. “We will look to take a startup from prototype through ‘DFM’ or design for manufacturing stages,” Ding said.

The incubator promises to give its startups access to ready-made Wi-Fi, Bluetooth and Robotic module components, via its Zowee connection. Access to components from validated suppliers can prove challenging and slow the time from prototyping to shipping for hardware startups.