Supporting Humanity
Unique Concepts
Technology is the bright fruit that hangs high on the branches, nourishing human beings. But deep tech is a gnarled tree with roots deep in the ground, and few people know about it.
Deep Science (深科技) has a double meaning: it is both commercial and scientific.
Swati Chaturvedi, co-founder and CEO of investment firm Prove(x), coined the term in 2014. By her definition, deep tech refers to "companies that build on scientific discoveries or meaningful engineering innovations" that also seek to make the world a better place. From a scientific point of view, it is a category of technology that is more realistic and practical than basic technology, a collection of technologies that contribute significantly to science, economic development, and social progress, and typically includes -
New materials, artificial intelligence, biotechnology, blockchain, drones and robotics, optical fiber, and other technologies. chain, drones and robotics, photonics and electronics, and quantum computing.
While almost all startups are cloaked as tech companies, we can see the problem if we look closely enough. Most so-called tech companies are built on business model innovation, or utilizing existing technology applied to a business model.
Take Uber, for example -
Uber is built on the concept of the "****sharing economy", which is a business model innovation. Or we are familiar with Anthem, which attempted to use internet technology to go public, but still engaged in traditional financial services.
Deep tech companies, on the other hand, are built on tangible scientific discoveries or engineering innovations. They are working on big problems that really affect the world around them. For example,
a new medical device or technology for cancer treatment;
a data analytics technology to help farmers grow more food;
or a clean energy solution that tries to reduce humanity's impact on climate change.
Analyzing brain nerve cells and exploring the mysteries of the human brain
Deep tech companies promise to use technologies such as big data, artificial intelligence, or deep learning to deliver solutions across a wide range of fields using methods that are more scientific than the scientific methods used by tech companies reported in the media. They are not the fastest-growing tech companies of recent years (e.g., Facebook or Spotify), nor are they based on innovative business models (e.g., Airbnb or Uber). Instead, they solve problems through meaningful scientific or technological developments.
Three Characteristics of Deep Technologies
In the business world, deep technologies have three distinguishing characteristics. These are technologies that can have a huge impact, take a long time to get to market, and require large amounts of money to develop and scale.
1 - Huge Impact
Deep tech-based innovations can have huge economic value, but their ultimate impact extends far beyond the business world, and is even greater in the way they can transform the daily lives of human beings.
2-Long R&D
Deep tech takes time to move from basic science to real-world use cases, much longer than tech companies innovating based on business models.
It often takes five to ten years or more to move from project inception to technology validation to technology design and finally to production, and deep tech projects tend to be pioneering, with regulatory pressures further lengthening the development time. In contrast, the average development time for a technology company developing something like a mobile app is only a few months.
3 - Tough Funding
Deep tech companies have high funding needs, but the deep tech space is often difficult to find initial funding for because of its complexity.
Basically, even investors (especially early stage investors such as angels) often struggle to understand the entrepreneurial potential of deep tech companies because it's hard to find an investor that is so exceptionally well versed in a particular subject matter, that they can really understand the innovative technology that startups offer.
The other is market risk. Many deep tech companies are seeking funding in the early stages of research, far before they have put a product or even a prototype in the hands of a potential customer, which means that deep tech investors have few KPIs with which to assess their traction and market potential.
Sowing the Future
Some deep tech companies you may have heard of are Alpha Go, which beat Ke Jie and a host of other Go masters, and DeepMind, the creator of DeepMind, a deep tech company with roots in neural networks.
More deep tech companies are less well known, but focus on projects that are not far away, and even more relevant to our lives.
Gel-e Life Sciences, for example, is a company that wants to use biomaterials technology to produce faster and safer materials to stop bleeding.
Aromyx, a company that focuses on the capture and sharing of odors, has a big future in agriculture and food.
Lilium Aviation, which is developing sci-fi like vertical takeoffs for everyday transportation.
Luminance is aiming to apply AI technology to the legal field.
The four companies just mentioned above
Deep Tech answers the question of how humanity will get to the future, and that alone is profound enough.
In order to achieve these goals, we will have to invest in life sciences, computers, new energy sources, and so on ...... That's why investing in deep tech is important -
Investing in deep tech is important because without it, humanity will be able to achieve its goals. strong> Because without these technologies, humanity cannot move forward. We won't cure cancer by investing in health wearable apps. We won't grow more food, become more energy efficient, or perform more effective surgeries by investing in internet companies or mobile apps, either. Besides the goal of changing the world, deep tech companies are an attractive investment opportunity. Propel(x) insists, "Deep tech investments still carry risk and sometimes face a longer path to liquidity, but their low valuations can deliver sizable returns." In Europe, venture capital (VC) investment in deep tech has grown three times faster than in the world of B2C tech startups since 2015, according to a survey by Wavestone.Atomico shows that deep tech investments accounted for $3.5 billion across 600 deals in 2017. prople(x) is a VC platform focused on deep tech Branching out In fact, there have always been motivated and visionary scientists and entrepreneurs. More and more scientists are becoming entrepreneurs when they succeed in starting their own businesses, and some of these entrepreneurs are turning into angel investors to support new science and technology entrepreneurs, creating a "scientist-entrepreneur-angel-investor-new-scientist" cycle.
A very important part of this change is that people who know how have access to the technical capabilities, funding, and other key resources to bring their dreams into the lab and into the marketplace, which is really what makes deep tech thrive. This includes-
1- The rise of new platform technologies
In fact, innovation over the last few decades has been largely due to a number of powerful platform technologies (silicon chips, desktop computers, the Internet, and mobile technologies).
These technologies have generated a wide range of applications across many industries. Today, powerful new platform technologies are continuing to emerge, paving the way for innovation in the coming decades.
For example, in software (machine learning), hardware (quantum computing), and biology (gene sequencing and CRISPR-Cas9, which are reinventing biotechnology), to name just a few, this not only multiplies their potential, but also creates momentum to drive a new industrial revolution.
2- Reduction in the cost of innovation
With the rise of new platform technologies, the cost of innovation has fallen dramatically.
Today's innovators have a wealth of technological capabilities. Computers are inexpensive and powerful, and cloud services can provide more powerful computing resources, eliminating the need for large upfront technology expenditures.
Similarly, software is open source and widely available as a service: computer-aided design and manufacturing and 3D printing have revolutionized prototyping; in biotechnology, DNA sequencing and synthesis have become standard services.
3- Increased demand for innovation
Innovation today is more decentralized and diverse than ever. More startups are looking for more avenues of application, such as artificial intelligence, which can be applied to blockchain, biotechnology, new material development, drones, new energy sources, and many other areas.
4- Growth of available capital
There is no shortage of venture capital in the culture of innovation and entrepreneurship.
According to Crunchbase, the value of global venture deals in the third quarter of 2018 was close to $100 billion, an increase of more than 40% over 2017. Deal volume also grew by 40% to nearly 10,000 rounds during this period. The ability of startups to achieve new levels of scientific and commercial success has encouraged investors to pump hundreds of billions of dollars into smaller companies.
5- Government Support
Governments around the world are providing more support in new technology R&D support.
According to data compiled by The Economist, China's purchasing power parity (PPP) spending on R&D has increased by about 400% over the past 20 years to more than $400 billion per year in order to compete with Europe and the United States. Total R&D spending in the US is equivalent to 2.7% of GDP, followed by China at 2.1% and the EU at 2.0%, according to UNESCO.
6-its own charm
Creating an ecology
Deep tech is not like planting wheat, where you reap what you sow. More like precious wild mushrooms, only in a specific environment, waiting for its growth.
Development of DeepTech also requires an innovative ecosystem.
Business ecosystems are not new, but DeepTech operates in an emerging space where ecosystems are budding and have yet to stabilize.
Deep Tech ecosystems are highly dynamic - players come and go, and they create a new relationship that is not always formalized, defined by contract, or dictated by setup.
For example, mature startups in the commercialization stage require less technical, IP, and regulatory expertise, as well as more visibility and access to markets than early stage startups. The attractiveness of various types of partners also changes as startups turn to different stakeholders over time to get the resources they need.
Collaboration in a deep tech ecosystem relies less on a central coordinator and more on multifaceted interactions between participants. Even when ecosystems have a strong player at the center (usually the one that brings other parties together), it is rare for the entity to have complete control. Its role is more that of a magnet than a managing partner. Each partner can influence the overall direction, and alliances between participants can shift the balance of power on key strategic issues.
In addition, unlike traditional business ecosystems, the energy flowing in the Deep Tech ecosystem is more than just money. Knowledge, data, skills, expertise, contacts, and market access are also the energy that connects ecosystem participants. This means that traditional financial measures, such as revenue and profit, are not always the best means of assessing realized value. Deep tech ecosystems often involve relationships built on non-traditional, indirect or non-financial connections (e.g., involving data or services) that drive companies, startups, investors, and others to develop new models of collaboration and compensation. Ecosystem participants simultaneously exchange energy in a variety of ways.
Finally, the endgame and path forward for the deep tech ecosystem is highly uncertain. Any particular idea, startup - or emerging technology - may or may not succeed. Traditional top-down strategies and R&D program management techniques need to be augmented by approaches designed to manage uncertainty. Different management approaches can inspire, nurture, and increase the likelihood of desired outcomes, but they cannot be designed. In this environment, companies and investors should not think in terms of a single "bet" or "wager". They need to engage and nurture the entire ecosystem and look for successful startups or technologies to emerge from it.
London, for one, has managed to cultivate such fertile ground.
The report shows that in 2020, the UK's deep tech sector attracted the third highest amount of investment globally - just one-tenth of the amount attracted by the US, but with a growth rate of 17.37%, the highest in the world.
While 2020 has been dominated by the epidemic and Brexit, the UK tech sector has bucked the trend and delivered a strong performance, further cementing its position as Europe's number one tech hub. 2020's standout deep tech startups in the UK include energy tech company Octopus Energy; electric car maker Arrival; and IoT company Cononus. Arrival; IoT company Connexin; fusion energy research company Tokamak Energy; self-driving startup FiveAl (Cambridge); and plant-based meat company The Meatless Farm Company (Leeds).
With jobs in the UK's digital economy increasing by almost 50% over the last 15 years, tech jobs are becoming a bigger part of the labor market, and the home office of 2020 is a harbinger of what work patterns may spin off in the coming decades. Overall, the contribution of deep tech to the UK economy is increasing.
A new deep tech ecosystem is forming,
Join it or leave it.