What is Deep Tech? Understanding Deep Technology
In recent years, the term Deep Tech has been widely used across various industries. But where did this concept originate, and what does it really mean?
The term "Deep Tech" was first introduced around 2014-2015 by Swati Chaturvedi to define a new category of startups that leverage scientific breakthroughs and engineering innovations to disrupt multiple industries.
(It is fascinating to note that the first recorded use of "Deep Tech" appeared in a 2015 LinkedIn article.)
Following the burst of the dot-com bubble in 2000 and the financial crisis of 2008, the 2010s witnessed the rapid expansion of smartphone-based platform economies, giving rise to companies like Uber and Airbnb.
However, Deep Tech startups differ fundamentally from platform-based or business model-driven companies. Unlike internet-based businesses focused on sharing economies and service innovations, Deep Tech companies are built on scientific and engineering advancements aimed at solving critical global challenges.
The Rise of Deep Technology
Deep Technology is driving a revolution across industries, creating opportunities as transformative as the Industrial Revolution. To explore this further, let's break down its core principles.
So What Exactly is Deep Technology?
When we founded Propel(x) just over a year ago to help Deep Tech startups secure funding, we realized that many investors were overlooking key technological innovations in search of the next "unicorn" startup.
While countless tech startups exist, we needed a way to categorize ventures in fields like life sciences, energy, clean tech, computer science, materials, and chemistry. After extensive discussions, we coined the term "Deep Technology" to define a distinct category of startups that focus on scientific breakthroughs and engineering advancements rather than mere business model innovations.
A common question arises: "Aren't all technology companies based on scientific principles?"
The answer is partially yes, but mostly no.
Most modern tech startups use existing technologies to innovate business models or move services from offline to online. Uber, for example, revolutionized transportation by introducing a sharing economy model—but it did not fundamentally reinvent transportation technology.
Deep Tech companies, on the other hand, are built upon tangible scientific discoveries or engineering breakthroughs. They aim to solve pressing global challenges, such as:
- Developing new medical technologies to fight cancer
- Enhancing agricultural productivity through AI-driven data analysis
- Creating clean energy solutions to combat climate change
If we extend the Uber example, a Deep Tech approach to transportation would focus on autonomous vehicles, flying cars, or next-generation propulsion technologies rather than platform-based ride-sharing.
Why is Deep Tech Important?
Deep Tech is essential because it drives meaningful progress in fields like life sciences, clean energy, AI, and materials science. These industries are experiencing rapid advancements, leading to groundbreaking startups emerging from research institutions worldwide.
For instance, while scientists have studied the human genome for decades, the combination of DNA sequencing and bioinformatics has given rise to a new wave of genomic startups. Institutions like the University of Virginia's Advanced Genomics Lab are spearheading these innovations.
Similarly, artificial intelligence has been explored for years, but recent advancements in deep learning have revolutionized applications in speech recognition, natural language processing, and computer vision.
The Challenge of Deep Tech Investments
One major issue in Deep Tech is securing early-stage funding. Many of these innovations are complex, capital-intensive, and require long-term development. Unlike traditional tech startups, Deep Tech ventures struggle to attract investment because their technologies may take years to commercialize.
For example, when Google acquired DeepMind for over $400 million, few investors had even heard of the company. It was backed by a select group of visionaries, including Founders Fund and Elon Musk. Most investors lacked the expertise or due diligence capabilities to assess its potential.
At Propel(x), our mission is to democratize access to Deep Tech investments by helping investors understand the value of these pioneering companies.
The Definition of Deep Technology
When the term "Deep Tech" was first introduced in 2014, it was primarily used to classify startups in fields such as life sciences, energy, clean technology, computer science, materials, and chemistry.
However, many people still associate Deep Tech solely with information technology and artificial intelligence, overlooking its broader impact in areas like industrial innovation, new manufacturing methods, and sustainable energy solutions.
For instance, Tesla is a perfect example of a Deep Tech company. Despite its massive influence today, Tesla once struggled to secure funding and survived only through government loans and Elon Musk’s personal investments.
At its core, Tesla’s breakthrough technology was not just about electric vehicles—it was about battery chemistry, energy management, and engineering advancements.
Similarly, many Deep Tech innovations that seem "impossible today" will soon become so ubiquitous that we can’t imagine life without them.
Challenges and Opportunities in Deep Tech Investing
The COVID-19 pandemic highlighted humanity’s ability to accelerate scientific innovation, particularly with the mRNA vaccine revolution. But this is just one of many disruptive breakthroughs happening across fields like:
- Quantum computing
- Synthetic biology
- Carbon capture technology
- Next-generation space exploration
While Deep Tech remains in its early stages, its impact will far exceed that of traditional digital technology.
The Unique Nature of Deep Tech Ventures
Deep Tech startups differ from traditional tech companies in several key ways:
- They are problem-driven – Deep Tech startups aim to tackle fundamental global challenges. About 97% of Deep Tech ventures contribute to at least one United Nations Sustainable Development Goal (SDG).
- They leverage cutting-edge technologies – Most Deep Tech startups combine multiple advanced technologies, such as AI, synthetic biology, and quantum computing. Around 70% of Deep Tech startups hold patents related to their innovations.
- They blend digital and physical innovation – Unlike software-focused startups, 83% of Deep Tech ventures develop physical products alongside digital solutions.
- They require new investment models – Unlike traditional tech startups, Deep Tech ventures involve research institutions, government grants, and large-scale capital investments from the outset.
The Future of Deep Tech
The number of Deep Tech unicorns is rising, and early investments in this field are yielding significant financial and societal returns. While the future winners remain uncertain, the acceleration of Deep Tech innovation is undeniable.
Unlike past industrial breakthroughs (e.g., electricity, semiconductors, and combustion engines), Deep Tech is ushering in a new era of investment models tailored to long-term, research-driven innovation.
At Propel(x), we believe that Deep Tech is the key to transforming industries over the next few decades. It is not just about AI and IT—it encompasses next-generation manufacturing, agriculture, clean energy, space exploration, and beyond.
Final Thoughts
Deep Tech startups have the potential to reshape the world while creating massive economic value for early investors. These companies are not platform businesses or software-based disruptors—they are built on scientific and engineering breakthroughs that will define the next century.
For investors with vision and patience, Deep Tech presents an unparalleled opportunity to fund the future while driving technological progress for humanity. 🚀🔬
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