In the ever-evolving landscape of tech, the term “deep tech” has been slowly gaining popularity. First coined by Swati Chaturvedi, the founder and CEO of Propel(x), an online investment platform connecting early-stage deep tech ventures with investors, deep tech represents a new and interesting niche in the start-up world.
Defining Deep Tech
At its core, deep tech is about ground-breaking innovation in engineering and scientific advancements. Unlike shallow tech, which involves simple transitions from non-digital to digital business models, deep tech start-ups use cutting-edge technology to solve complex, real-world problems.
For example, while Uber disrupted the taxi industry, it doesn’t fall under the deep tech category as it used an existing concept—the sharing economy—built on already available digital technologies.
Deep tech, on the other hand, begins and revolves around innovative technology. It often uses artificial intelligence (AI), machine learning, and other technologies like blockchain, computer imaging, and virtual reality (VR). Examples of deep tech include AI-driven predictions of natural disasters or molecular imaging technologies that can detect diseases long before traditional tests can.
What Sets Deep Tech Apart?
Diverse Domains of Innovation
Deep tech start-ups aren’t confined to a single sector; they span across artificial intelligence (AI), life sciences, agriculture, aerospace, chemistry, industry, and clean energy. These start-ups often combine technologies, leading to new innovations. For example, aerospace technologies might be used to monitor crop conditions, or AI could be applied to clean energy production.
A Strong Technological Foundation
A striking feature of deep tech start-ups is their emphasis on technology. Unlike many start-ups led solely by CEOs, deep tech companies typically have a board of advisors that includes Chief Technology Officers (CTOs). This reflects the very important role of technology in shaping their business models. These start-ups often hold patents or other intellectual property (IP) and invest years in research and development before venturing into the market.
Long-term Investment and Research
Deep tech start-ups often require large, long-term investments. Achieving commercial success may also take longer because they deal with new technologies that might take time to become mainstream. However, when they do succeed, they tend to completely revolutionise industries. Take, for example, fintech companies using blockchain technology to enhance security and enable global banking, this allows them to bypass the inefficiencies and red-tape of traditional banks – making them almost obscelete.
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The Trajectory of Deep Tech – Where Is It Heading?
A New Industrial Revolution
Deep tech fields such as AI, advanced materials, blockchain, biotechnology, robotics, drones, photonics, and quantum computing are moving quickly from early-stage research to practical applications.
This signals the start of a new industrial revolution, where new technologies drastically change how we live and work. Just as the internet, mobile technologies, PCs, and silicon chips transformed our world, deep tech has the potential to combat global challenges like climate change, disease control, food security, and aging populations.
Advancements like 3D printing, DNA sequencing, and computer-aided design have made testing and prototyping more accessible and quicker than ever before. As deep tech platforms advance, they unlock bigger possibilities and speed up their journey to market.
The Resurgence of Deep Tech
Deep tech has always existed as a category for investment within the tech industry. However, its visibility has gone up and down over the years, often overshadowed by consumer-focused tech giants like Facebook, Google, Apple, and Amazon.
Recently, as consumer tech growth has slowed, investors have redirected their attention to start-ups tackling bigger and more complex technological challenges. This shift has sparked new interest in deep tech, leading to a 20% annual growth in investments between 2015 and 2018, culminating in nearly $18 billion of investment in 2019, according to a report by Boston Consulting Group.
In conclusion, deep tech represents the peak of innovation, where technology is not just a tool but the cornerstone of business models. With its ability to transcend industry boundaries, reshape norms, and tackle global challenges, deep tech is set to usher in a new technological revolution. As investors increasingly recognise its potential, we can expect deep tech start-ups to play a central role in shaping the future of our world.