What is Deep Tech and Why Should You Care?

What is Deep Tech and Why Should You Care?

Deep tech is the next big thing. It promises solutions to the biggest problems the world faces today. In 2018, nearly $18 billion was privately invested in deep tech companies around the world, and this interest shows no signs of cooling off. Investment in deep technology has increased by over twenty percent every year since 2015.

But what is it, and why should you care? How will it affect the world you live in? In this post, we’ll answer those questions and look at three real-world examples of deep tech companies.

What is Deep Tech?

Deep tech is innovation based on genuine scientific advances. Named after the long term research and ‘depth’ of expertise they’re built on. Deep tech companies are disruptive because they have the power to create new markets. The Boston Consulting Group highlights three characteristics of deep tech start-ups: the potential for a big impact, the need for longer timescales, and higher levels of investment.

The term was coined in 2014 by Swati Chaturvedi, CEO of Propel(x). While the term is ‘purposefully vague’ because new technologies are emerging all the time, some sectors include:

 

Biotechnology & synthetic biology – engineering biology by redesigning natural systems or building new ones.

Artificial intelligence (AI) – designing computers that can imitate human cognition to learn, recognise patterns, and solve complex problems.

Photonics & electronics – light generation, detection and manipulation, and its integration with electrical systems for sensing and communications.

Drones & robotics – automated and intelligent machines with increasing capabilities in surgery, home maintenance, delivery, and many other sectors.

Advanced materials – the design and discovery of materials with new properties, such as superconductors that power magnetic levitation trains in Japan.

Quantum computing – quantum theory describes the universe at (sub)atomic scales, and its key findings can be applied to the design of faster and more secure computers.

 

A chemist at work at Unit DX, Bristol. Chemistry is an example of deep tech.

So deep tech, we don’t even need the lights on.

It’s important to distinguish between tech and deep tech. Most of the companies that come to mind when you think about Silicon Valley have been successful because they used existing technology to make new business models or move offline activities online. Spotify essentially ‘rents’ music to listeners so that they can access more music than they could afford to buy. Airbnb links people with spare accommodation to travellers looking for somewhere more interesting than a hotel. Neither of these companies made a technological leap – they found clever ways to reorganise people and resources.

“This is good news for investors because it means that the underlying intellectual property is well-defined and difficult to reproduce, providing a competitive advantage”

By contrast, the foundation of deep tech companies is a scientific discovery. As Deutsche Welle puts it, most tech companies are ‘reinventing the wheel’, while deep tech ‘makes wheels obsolete.’ This is good news for investors because it means that the underlying intellectual property is well-defined and difficult to reproduce, providing a competitive advantage. However, deep tech is also riskier: more money is required for R&D, and the road to market is often longer.

Why is Deep Tech Important?

Analysts predict that a fourth industrial revolution is underway. The World Economic Forum defines it as ‘a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres’. Today’s deep tech companies are taking aim at global issues: our climate emergency, world hunger, and the future of healthcare for an ageing population.

We’ve lived through three industrial revolutions, each powered by the deep tech of its time:

  1. 1760-1840: Steam and water power allowed the transition from hand production to mechanised factories, leading to an explosion in population growth.
  2. 1870-1914: Steel replaced iron, allowing for the expansion of railways. Electrification and the petroleum industry enabled mass production. Living standards and public health greatly improved in industrialised countries.
  3. 1969-2010: Computers, the internet, and robotics have allowed the digitisation of manufacturing. Far less human labour is required to produce flexible, customisable products economically.

 

 

Investors have already started to take notice. The Boston Consulting Group report that between 2015 and 2018, nearly $60 billion was invested across seven deep tech sectors.

Three Real Examples of Deep Tech Companies

Let’s take a look at three start-up examples to illustrate how diverse and disruptive deep tech start-ups can be. In each case, the journey from invention to product took a considerable amount of time, but it’s this long term approach that makes these companies so innovative.

1. Boston Dynamics

What Do They Do?

Boston Dynamics are world leaders in engineering and robotics design. The company captured the public imagination with its series of YouTube videos of its creations, including:

  • Cheetah, which can sprint faster than Usain Bolt’s world record pace,
  • Atlas, a humanoid that can perform parkour,
  • SPOT, which can climb stairs, open doors, and stack dishwashers.

These videos tend to provoke a mixture of awe and terror in viewers. An episode of Black Mirror, the science fiction TV series, was inspired by Boston Dynamics and features murderous robot dogs that hunt down the last surviving humans. In July, a parody of Boston Dynamic’s videos imagined a robot fighting back against its testers:

 

 

Robots do jobs that are too dirty, dull, or dangerous for human workers. They are ‘man’s tools for a better and less mechanical life’. However, robots still aren’t mobile, perceptive, or intelligent enough for many tasks. These difficult design challenges are what Boston Robotics focus on.

What Makes It Deep Tech?

The road to commercialisation has long been unclear for Boston Dynamics. This is often an issue for deep tech companies: because their technology is complex it can be difficult to understand its value. Boston Dynamics’ robots are so advanced that they have the power to create new markets, so they’re leasing their first SPOT robots to development partners.

Timeline

Time from spin-out to product: seventeen years.

2. Folia Water

What Do They Do?

Folia Water are an advanced materials start-up based in New York. They make paper filters embedded with silver nanoparticles that kill bacteria in dirty water, providing access to clean water for pennies instead of dollars. TIME Magazine selected Folia’s technology as one of its 25 best inventions of 2015.

Worldwide, two billion people drink water contaminated by human or animal faeces. More than half of the developing world’s population is suffering from one or more diseases associated with unsafe water and poor sanitation. Every day, 6,000 children die of water-related diseases.

Folia’s filter technology is:

  • Cheap – It costs $0.50 to produce a week’s supply of clean water. This is affordable for the three billion people earning $2-10 a day who spend $20 billion on bottled water.
  • Simple – A five-year-old can use the filters properly. There’s no need for electricity, heat, or a mechanical pump.
  • Portable – Each filter weighs a few grams.
  • Green – Folia’s paper is sustainably sourced and biodegradable.

In 2013, Dankovich took her filter system around the world to test it against real contaminated water supplies. In South Africa, the team filtered water from a stream where raw sewage was regularly dumped and made it clean enough to drink. Folia spoke to local communities about their needs and refined their product accordingly. In 2014, they produced a book with 25 pages – each of which can be used as a water filter – with sanitation advice in local languages.

 

What Makes It Deep Tech?

Folia’s filters have a tremendous potential impact – they could make clean, safe water available to all. Their technology is based on a large body of academic work, and during its development, genuine scientific innovations have been made.

Timeline

    • 2006-12 – During her PhD, Theresa Dankovich – now co-founder and CTO at Folia Water – designs a filter that can remove bacteria from drinking water.
    • 2013-16 – Dr Dankovich continues to develop her filters and tests them in the field.
    • 2014 -.In partnership with WATERisLIFE, The Drinkable Book is launched.
    • 2016 – Folia Water is founded as a for-profit benefit corporation.
    • 2017 – Folia officially launch their product to consumer goods distributors in low- and middle-income countries.

Time from prototype to product: eleven years.

3. Oxford Nanopore

What Do They Do?

Oxford Nanopore work at the interface of biotech, electronics, and chemistry. The company is one of only 72 unicorns – privately-owned companies valued at over $1billion – in the United Kingdom.

Oxford Nanopore make devices that can sequence DNA, the molecule carrying the genetic information that makes every living thing what it is. Scientists use DNA sequencing to understand diseases, evolution, agriculture, and crime.

 

 

DNA sequencing is slow, expensive, and requires specialist facilities. This makes it difficult for scientists working in dangerous or inaccessible places like jungles, deserts, and mountains. The expense is also a problem for researchers in low-income countries.

Oxford Nanopore’s MinION sequencer is the size of a USB stick and weighs just 100 grams; a competitor, the Illumina MiSeq, weighs nearly 600 times as much and is bigger than a microwave. The MinION also costs just $1000, compared to $100,000 for the MiSeq.

Nanopore technology enables real-time sequencing for researchers in the field. In 2018, the MinION was used to monitor an outbreak of Lassa fever in Nigeria on the ground. Scientists didn’t have to waste time transporting their samples for sequencing, so they could quickly learn that the outbreak was spread by rodents and didn’t involve a new viral strain.

Incredibly, a MinION was recently used to analyse marine bacteria during a force eight storm. Nanopore’s SmidgION, currently in the pipeline, will be compatible with a mobile phone, making sequencing even more portable.

What Makes It Deep Tech?

When the inventors first began studying natural nanopores, they had no idea if their research would have any real-world applications. Their research has generated over 1000 patents and changed DNA sequencing forever.

Nanopore’s mission – to enable the analysis of any living thing, by anyone, anywhere – is disruptive. The growing ‘DIY Biology’ movement of amateur scientists wants to ‘hack’ biology in their own homes and make biotechnology open source to empower the public. Oxford Nanopore’s technology is making this possible and raising lots of awkward ethical issues.

Timeline

  • 1990s – Professor Hagan Bayley is studying alpha-haemolysin, the protein that will be engineered into nanopores.
  • 1996 – Collaborators in the USA move single DNA molecules through nanopores. They recognise that ‘with further improvements, the method could in principle provide direct, high-speed detection of the sequence of bases in single molecules of DNA.’
  • 2005 – Oxford Nanopore is founded to develop an electronic single-molecule sensing system.
  • 2015 – Their first product, the MinION, is made commercially available.

Time from idea to product: nineteen years.

What Do Deep Tech Businesses Need?

The Boston Consulting Group have identified six key resources that deep tech start-ups need:

  • Funding
  • Market access
  • Technical expertise
  • Business expertise
  • Access to facilities
  • Talent

Funding is the most important of these resources. Deep tech start-ups need bold investors who can see the big picture. Swati Chaturvedi, who coined the term ‘deep tech’, believes that many are missing out on a huge investment opportunity.

Because deep tech is complex, it can be difficult for investors to see the value of a start-up and carry out due diligence – this means that deep tech companies are often undervalued. If investors connect with scientific experts who can perform due diligence, they can use their expertise to invest earlier and see bigger returns.

Small businesses can’t meet all of their needs. Research from the World Bank has shown that to survive, start-ups need to be embedded within an innovation ecosystem – a network of people from universities, government, professional services, community groups, and investment firms.

Deep tech ecosystem diagram, showing Incubators at the centre of a community including universities, startups and investors.

Incubators are at the centre of innovation ecosystems, acting as the magnets that draw together the different resources that deep tech start-ups need. A 2019 Nesta report found that 73% of start-ups consider incubators ‘vital or significant to their success’.

 

You can find out more about the deep tech companies working at Unit DX by reading our Science Behind the Technology series. Keep up with the latest in deep technology by following us on Twitter.

By | 2019-11-14T16:24:52+00:00 November 13th, 2019|Deep Tech Mini Series|