Authored by Peter Smith, Partner at EverQuest Capital Partners
The next phase of UK technology growth will not be defined by another wave of software companies solving familiar consumer or enterprise problems. It will be defined by deep tech: businesses built on scientific discovery, advanced engineering and intellectual property that is difficult to replicate.
Deep tech is where some of the most important economic and strategic questions of the next decade will be answered. Artificial intelligence, quantum computing, advanced materials, robotics, biotechnology, clean energy and space technology will shape productivity, health, resilience and climate transition. The countries that build leading companies in these areas will not just create valuable businesses. They will build industrial advantage.
Within deep tech, the fastest-growing segment is what we call Deep MakeTech: advanced manufacturing, materials and industrial technologies. It has been chronically underspent for a long time, overlooked in favour of software and consumer internet, even as the physical economy continued to depend on it. That is changing rapidly. This is the segment where EverQuest Capital Partners focuses, and where we believe the greatest opportunities now lie.
The UK is better placed than many realise. Its university system remains one of the strongest engines of invention in the world. Oxford, Cambridge, Imperial, UCL, Manchester, Bristol, Edinburgh and others are producing research with global commercial potential. Around these institutions, a stronger spinout culture is emerging. More academics now see commercialisation as one of the ways that research creates lasting impact.
The question is no longer whether the UK can create world class deep tech companies. It already does. The question is whether it can back them early enough, patiently enough and ambitiously enough to keep more of that value here. This is where EIS has such an important role to play, helping direct private capital into the early-stage businesses that are often too technical, too specialist or too early for more traditional funding routes. Funds such as EverQuest Capital Partners illustrate the kind of specialist investment platform the UK needs more of able to raise and deploy capital into emerging deep tech companies with the sector knowledge required to identify which technologies can move from laboratory promise to commercial scale.
University Culture Is Becoming a Growth Engine
For many years, the UK’s strength in science was treated as separate from its start-up economy. The country produced exceptional research, but too often struggled to turn that research into scaled companies. Promising technologies left the lab, secured early validation, and then either stalled for lack of specialist capital or moved overseas.
That picture is changing. University spinouts have become one of the most important parts of the UK innovation economy. They are small in number compared with the wider high-growth company landscape, but their contribution is outsized. They are often built around defensible intellectual property, founded by teams with deep technical insight, and focused on markets where successful outcomes can be transformational.
The best deep tech companies rarely look like conventional start-ups at the beginning. Their first proof point may be a lab result, a prototype, a patent or a partnership with a specialist industrial customer rather than rapid user growth. Judging them by mainstream software metrics risks missing their potential.
The UK is beginning to recognise this. Universities have become more sophisticated in how they support founders, investors are more comfortable with scientific risk, and policy attention has shifted towards spinouts, patient capital and strategic technologies.
Capital Is Following the Science
Investment patterns now reflect that shift. Even in a more cautious funding environment, deep tech and university linked businesses continue to attract serious interest. Investors are more selective, but they are still prepared to back companies where the underlying innovation is strong, the market is large, and the intellectual property is genuinely differentiated.
This is where the UK has a structural advantage. It does not need to manufacture an innovation base from scratch. It already has one. The challenge is to build the financial architecture around it. Deep tech companies require investors who understand that progress is not always linear. A company developing a new material, quantum technology or medical platform will not scale in the same way as software. It needs different milestones, timelines and support.
That does not mean accepting lower standards. It means applying the right standards. The strongest deep tech investors combine scientific understanding with commercial discipline. They can assess whether the technology is genuinely novel, whether the market need is real, whether the team can move from research into execution, and whether the capital plan is realistic.
EIS has an important role to play here. At its best, it directs private capital towards early stage companies that traditional funding models can overlook. For deep tech, where the earliest rounds can determine whether a promising technology reaches commercial maturity, that capital can be catalytic. EverQuest Capital Partners is a good example of how this model can work in practice. Its focus on Deep MakeTech, across advanced processes, materials and design technologies, is aligned with the areas where the UK already has deep research strengths and where commercial breakthroughs can have broad industrial impact.
Crucially, EverQuest’s relationship with CPI, the deep tech innovation organisation and founding member of the UK’s High Value Manufacturing Catapult, gives it a clear differentiator: access to technical expertise, specialist infrastructure and a pipeline of companies working on technologies with genuine scale up potential. That combination of capital, technical insight and commercial discipline is exactly what the UK deep tech ecosystem needs if more university born innovation is to become globally competitive industry.
It reflects our belief that investors should contribute expertise as well as capital. Every investment we make is guided by a simple objective: to make the business stronger than it would have been without us.
The Opportunity Is National, Not Just Financial
The prize is bigger than investor returns. Deep tech is tied directly to the UK’s future competitiveness. If the country wants higher productivity, stronger supply chains, cleaner energy, better healthcare outcomes and greater technological sovereignty, it needs more companies capable of turning advanced research into real-world products.
This will require universities, founders, investors and government to keep improving the path from lab to market. Spinout terms must remain founder-friendly. Procurement must help young companies secure early customers. Pension capital and institutional investors must become more engaged with the asset class. Specialist funds must be able to back companies through the difficult middle years between discovery and scale.
The UK has spent decades building one of the world’s great research systems. It is now building the investment culture needed to commercialise more of that research at home. The momentum is real, but it should not be taken for granted.
The deep tech companies being formed today could become the industrial leaders of the next generation. The UK has the universities, the founders and the science. The task now is to ensure the capital is there when it matters most.
