Inside The Engine Accelerator, the anti-Y Combinator for ‘tough tech’ startups

The Engine is where companies solving hard problems get off the ground. It’s part coworking space, with open desks, office suites, and conference rooms for rent. It’s part startup accelerator, hosting a high-octane circle of young scientists and engineers who need help turning their ideas into full-fledged operations.

If WeWork and Y Combinator had a baby, and that baby wanted to bring breakthrough research out of the lab and into the real world, it’d look something like The Engine.

Knight said the Engine exists to fill a market need. Founders in “tough tech” areas like climate, human health, and advanced systems often have difficulty finding stable support and access to the resources they need. They rely on specialized lab equipment that can cost millions of dollars, which they haven’t yet banked from investors.

In his studies at Harvard, Adam Slavney and his cofounder Jinyoung Seo developed a new kind of solid refrigerant for heat pumps and air conditioners shown to be twice as efficient as those used today.

“We had made a pretty big scientific breakthrough that we thought maybe was useful,” Slavney said, “but I had zero thoughts about how you would actually go about commercializing it.”

A faculty member suggested he look into The Engine. A year later, he runs a startup, Pascal, out of the accelerator and has raised $8 million in funding from investors like Khosla Ventures.

The anti-Y Combinator

The Engine isn’t a typical accelerator in one key way. It doesn’t invest in startups. Rather, it charges rent by the square footage or number of desks.

That wasn’t always the case.

The rent isn’t cheap. Stwart Peña Feliz, a cofounder and chief executive of MacroCycle, a startup that turns plastic waste into virgin-grade recycled plastic, said he’s paying double the monthly fees that a nearby climate-tech incubator charges. That facility didn’t meet his ventilation needs, however.

But The Engine makes up for the high cost with “intangible benefits,” Peña Feliz said. He’s met potential investors at events. He leans on the other founders for advice. MacroCycle even signed The Engine as its first customer.

“It became apparent that the premium was worth it for the grand vision that we’re trying to accomplish,” he said.

The accelerator is now toying with the idea of taking equity in lieu of rent, Knight said. The idea is to make that trade and then allow the company to buy back its equity after a fixed period.

“We’re not interested in complicating your cap table or in anything that would look predatory,” Knight said. “I am interested in this being an accelerant.”