What is deep tech is a great question and the answer will be dependent on who you ask.
A scientist is likely to define deep tech quite differently from an entrepreneur's explanation, which will be different again for an investor.
For us, deep tech represents the novel scientific or engineering innovations that have the potential to solve some of the world’s biggest social and environmental challenges – the future of our food, our health and our environment.
These technologies have the capability to create brand-new markets or disrupt existing industries and the underlying IP is either hard to reproduce or protected which means they have a valuable competitive advantage.
While they can have a significant impact, they’re also complex, R&D and capital intensive, and often take a long time to reach the stage where they’re market ready.
As our global population continues to grow beyond the already 8bn people, new avenues for innovation and collaboration open up. But this growth also places significant pressure on our environment, and food security systems, while extending our lifespan presents some fairly unique health-related challenges. Helping to solve these issues, is where deep tech plays a critical role.
A couple of examples:
- Nanobubble is a company that identified a need for primary producers to increase their production yields without using more irrigated water or produce the same yield but with less water – on a large scale and cost-effectively. Not only will this help feed a rapidly growing population, but the technology also addresses the depletion of fresh water as a natural resource.
- Vortex Power Systems and Cetogenix are developing different technologies that aim to generate energy more efficiently and/or produce it in a way that manages, or minimises greenhouse gas emissions
- Geo40 has discovered a way to extract lithium from geothermal brine waste, which increases the supply of lithium [important as we increase the use of batteries] and addresses the traditional carbon-intensive extraction method.
- Kitea Health is an early-stage medical technology company that aims to improve the care of people with chronic health conditions such as hydrocephalus and heart failure. Upstream Medical Technologies is developing a biomarker that will assist in the rapid and accurate diagnosis of an individual who turns up to the emergency department with chest pains.
The list continues but if you look at this in another way - a new energy drink or mobile payment app, while likely to make our lives more pleasant and easier, they’re not going to be able to address climate change, the depletion of our natural resources, be an alternative food or water source, or help us live longer, healthier lives.
Key Characteristics of Deep Tech:
Scientific Foundation: Deep tech innovations are grounded in scientific breakthroughs, relying on principles that often challenge the norm.
Ambition: Deep tech endeavours are driven by long-term goals, aiming to solve fundamental problems and create lasting impact.
Transformative Potential: The impact of deep tech extends beyond incremental improvements, offering the potential to revolutionise industries, create new markets, and address global challenges.
The Significance of Deep Tech:
Solving social and environmental challenges: Deep tech has the potential to tackle some of humanity's most pressing challenges, such as climate change, healthcare, energy efficiency, and food security.
Economic Growth and Innovation: Deep tech stimulates economic growth by fostering innovation, creating high-value job opportunities, and driving technological advancements that impact other sectors.
Reshaping Industries: From personalised medicine to energy transformation, deep tech disrupts traditional industries and reshapes them with more efficient, sustainable, and clever solutions.
Global Collaboration: Deep tech encourages international collaboration as scientific and technological advancements become shared global assets.
Challenges and Future Outlook:
While the promises of deep tech are immense, there are challenges to be overcome:
High Risk: The long development cycles and uncertain outcomes of deep tech can make investing in them, inherently risky.
Capital Intensive: Deep tech requires significant investment, which we’d say needs to be specialised, to create and deploy a commercialisation roadmap.
Regulatory Hurdles: The novel nature of deep tech often overtakes existing regulations, which necessitates new frameworks that can address ethical, safety, and societal concerns.
Talent Shortage: Deep tech demands specialised expertise, and a shortage of skilled professionals in these fields can get in the way of progress.
To sum up, deep tech companies are exploring the frontier of what’s possible. These are science and engineering-based innovations that go beyond making small improvements to our lives – they’re solutions that have the potential to reshape industries and address global challenges.
As a venture capital firm, deep tech is a really exciting space to be investing in. If we can help solve some of the globally significant challenges facing our health, our food sources and our environment, all of which are vitally important for our future, then we can create value and impact.
