What is Deep Tech?

Deep tech or deep technology are new technologies that look to find solutions for the world’s most pressing societal and environmental challenges. Also referred to as emerging technology, deep tech companies are research and development (R&D) intensive and multidisciplinary, with a technology-first approach. The aim is to assess the current solutions for scientific or engineering challenges and build technology that combats the existing drawbacks. 

Research universities are enabling a new generation of start-ups. Not only do scientists working with emerging technology have access to university facilities and public funding, they also benefit from being part of a research community. 

Deep Tech in the real world

Examples of deep tech in the real world include improving internet access by finding ways to provide remote and rural areas with internet connectivity, finding environmentally friendly ways to increase agricultural productivity, development of nanotechnology for medical applications and developing artificial intelligence (AI) and machine learning for advanced robotics.

Emerging business opportunities within deep tech have grown rapidly over the past two years. This is in part due to advances in digital infrastructure and a democratized research infrastructure.

The COVID-19 pandemic has also generated further developments:

• Genalyte developed an FDA-approved COVID-19 test that only takes 15min
• Halomine developed a method for stabilizing chlorine, this has now been used as a disinfectant that creates a protective film against the COVID-19 virus, that can last up to 30 days.
• Renegade. Bio was founded as a lab to provide diagnostic testing solutions to combat the virus that causes COVID-19.
• HelixNano (from Harvard) continues to work on developing a vaccine to counteract SARS-Cov-2 evolutions and antigenic drift. 

Business opportunities within Deep Tech 

Alternative investment and business opportunities in this sector include the development of energy storage, space technologies and food wastage solutions in addition to health care and medical advancements. Recent developments include a brain stimulation device for home use, developed by Flow Neuroscience (an SOSV/HAX co-investment) which is on sale in the EU and the UK.

With the increase in private facilities providing infrastructure to deep tech founders and collaborative research platforms such as Just One Giant Lab, open-source systems and cloud computing resources have reduced capital expenditure. This has made it easier for tech start- ups in emerging markets such as the space tech start-up, AgniKul Cosmos. Based in India they have developed a unique engine in less than two years, which is entirely 3D printed in one piece. 

Space technologies are core to enabling e-commerce, smart infrastructure, agriculture, and transportation. The drive for complete satellite connectivity has become increasingly urgent since the outbreak of COVID-19. AI development has also been leading the way and a report from McKinsey predicted by 2025 smart factories will generate $37 trillion. Combined with the decrease in risks associated with deep tech developments and leaner processes, reducing the time it takes to reach a market-ready solution, research from IFC portfolio funds indicates deep tech is now even more appealing to capital investors.

Sources

Deep Tech Solutions for Emerging Markets: Anastasia Nedayvoda, Peter Mockel, and Lana Graf

AI and Machine Learning in Manufacturing: The Complete Guide - SPD Group

Deep Tech Startups vs Covid-19, with Khosla Ventures, Fifty Years and SOSV: Benjamin Joffe