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As a venture capital company specialising in deep techinvestments, it's not every day that we have companies in our portfolio featured in a mainstream TV programme. However, when they do, it's a moment of pride and validation, not only for our team but also the people who are at the core of those companies.
On Sunday 28 April, TVNZ Sunday, New Zealand’s renowned current affairs show, dedicated the majority of their episode to exploring the rise of deep tech, and we were delighted that out of the three innovations profiled, the team from Pacific Channel has been instrumental in supporting two of the companies across multiple stages of their growth with our venture capital, resources, and networks.
This episode, titled "Disruptive" provided viewers with a captivating glimpse into the world of revolutionary technologies classified as deep tech. It showcased not only the immense potential of these big-thinking innovations to solve some very hard global problems but also the significant challenges the companies face in successfully commercialising the technology and building a business.
As a venture capital company committed to investing in the future of our health, food, and environment, seeing our investments showcased was a testament to the power of deep tech to shape a better world.
Vortex Power Systems:
One of the companies, Vortex Power Systems, is a clean tech company developing a proprietary system to capture and convert wasted heat from thermal processes into electricity.
Vortex’s technology utilises wasted process heat to create a controllable atmospheric buoyancy vortex [similar to a natural waterspout] which, once commissioned, is expected to reach about 5km. The circulating wind currents produced by this vortex will drive a turbine to generate electrical power, enabling global industrial producers to reduce their fuel costs and carbon emissions while also increasing the supply of electricity and processing plant efficiency.
Vortex’s technology could produce $50b worth of electricity annually, resulting in a considerable reduction in CO2 emissions.
InsituGen:
The second company highlighted in the programme was InsituGen.
Alison (who deserves her own recognition for competing in an impressive 13 Ironman competitions!) and the team from InsituGen have developed a new steroid hormone testing platform. Initially applied to anti-doping as a beachhead market, the company has now expanded its focus to include growth opportunities for supplement testing, testing water for endocrine-disrupting compounds, and companion animal health.
This adaptability and broad application of their technology demonstrate InsituGen's potential for growth and impact in various industries.
Our perspective:
What was evident in this programme is that one of the key challenges for deep tech is the journey from building a technology to building a business – the latter requires time and resources to answer all the commercial questions.
As an investor, we need to query whether we can pair an innovator with someone who is very commercially astute, understands the industry,and has the skills to shape the technology into a commercial opportunity.
Another challenge, and this is particularly relevant to medical and energy technologies, is determining what is a commercial proof point. In a traditional software business, as an example, it’s easy to say, ‘we’ve increased revenues by x’, but in deep tech it’s not necessarily a revenue metric – it’s a point in time when you’ve derisked the technology and created a value inflexion point. In healthcare, it might be a clinical trial that showcases the efficacy; in energy, it’s more likely to be a scale-up (which is exactly the milestone Vortex is about to prove).
As a deep tech investor, understanding the unique value inflexion point or commercial proof point for this type of technology is critical. It’s also an essential element for deep-tech companies to understand when they go to market seeking capital.
We’re proud to be New Zealand’s largest specialist deep tech venture capital company. For over 20 years we’ve been investing in this sector,and with over $100m under management, to date, we have invested in 50 Kiwi companies with growing activity across Asia Pacific, including in San Diego, Melbourne, Singapore and Beijing. Until a few years ago, the interest in investing in deep tech was not overly strong; however, with the growing appreciation of its potential to solve significant challenges and an increasing appetite for investing in ventures that realise long-term value, deep tech now claims an increasingly significant share of global investment. In New Zealand we’re seeing the same trend as what is happening internationally - according to PwC’s Startup Investment Spring 2023 report, investments in the sector accounted for 49% of all deals.
Understanding the unique value inflexion point or commercial proof point for this type of technology is critical.
So, for us, having TVNZ Sunday take an interest in a couple of our portfolio companies validates our investment philosophy and reaffirms our belief in the transformative power of deep tech. It also helps to clarify the role of these complex technologies for a wider audience, facilitating a greater understanding and appreciation for the innovations that will influence our future.
As a venture capital company, we remain committed to participating in a robust deep tech ecosystem to support and champion clever people tech as they continue to push the boundaries of what's possible.
