In a world obsessed with quick wins and viral apps, deep tech startups are betting on substance over sizzle. Here’s how they might change the game for good.
I recently came across a technology-related term that, believe it or not, I don’t remember having ever encountered before.
“Deep tech,” says Wikipedia, “is a classification of organization, or more typically startup company, with the expressed objective of providing technology solutions based on substantial (emphases mine) scientific or engineering challenges.”
Sadly unsurprising translation: there are so many fake capitalists who game the system by betting on whoever produces something unsubstantial, and so many “startups” and “innovators” whose only goal is to produce stuff the world doesn’t really need, just to become the focus of speculative bets and to be acquired quickly—that it was necessary to coin a new term for the minority of companies that want to do something substantial instead.
Inspiring, isn’t it? And yet, it’s good that there still is something positive happening in tech, and that there is a clear label to identify it (until the label is abused and “deepwashing” begins, at least).
Two Deep Tech Examples
I made this bittersweet discovery thanks to recent announcements by two deep tech venture capital firms very far from each other: Iron Wolf Capital, which just launched a €100 million seed fund in Lithuania, and Outset Ventures, which did basically the same thing, albeit with less money, in New Zealand.
What I like about Iron Wolf, besides its “laser-focus” on supporting the local Baltic ecosystem, is its interest in biotech, energy, and space rather than the usual vaporware-friendly suspects like apps, crypto, or, of course, AI. It’s good to find VC firms that are “definitely still holding out for some of the more exciting developments [in AI… Since that] space is so buzzy, we are also approaching it a little cautiously.” Even the company’s explicit distance from “the vibe … that the only way for a deeptech startup to grow is to raise a pre-seed round and use it to relocate to Delaware” is really refreshing if you ask me. Or, to stay on topic, really “deep.”
Concretely, most of Iron Wolf’s focus seems to be on three main areas, all well researched by local universities:
- battery and energy tech
- photonics and laser technologies, especially those with space applications, biotech, and medtech
What’s happening in New Zealand is equally interesting, if not more so.
Similar to Iron Wolf, Outset Ventures values “capital efficiency and high technical quality over blitzscaling” and focuses on startups working on hard science and engineering breakthroughs because it believes those are technologies that New Zealand is uniquely suited to lead.
Why do they say so? Because they feel that, just like Greece, New Zealand is (lucky for them) “too small to play on the frontlines of AI,” which are places that everybody can and should avoid.
As an example, Outset Ventures is funding companies that are trying to fix a problem that shouldn’t exist, that is the downstream energy and infrastructure problems that AI is already starting to strain. I like that, because there are plenty of people, projects and infrastructures that badly need “cheaper, cleaner ways to generate and store energy, recycle heat waste, and address infrastructure bottlenecks,” even if the AI bubble popped tomorrow.
To this end, Outset Ventures is funding, among others, two companies named OpenStar and EnergyBank. The first is a nuclear fusion startup that hopefully will not treat nuclear as just another market ripe for “move fast and break things” disruption. The mission of EnergyBank is to build long-duration energy storage. If they succeed, it would be a godsend everywhere, particularly in Europe, which is struggling with grid resiliency (to know why that’s important, just ask the Spanish, who got hurt by a huge blackout just a month ago).
What’s missing here?
The need to explicitly define and separate what’s “deep” tech from what isn’t would be funny, if it weren’t an admission that what we call “the economy” is hell-bent on wasting huge amounts of resources on stuff that doesn’t deserve them.
Still, it’s better than not having deep tech investments at all. As silly as they are, if certain terms help to distinguish between fake and real innovation, so be it—unless they mask something else, but that’s the topic for next week. For now, let me remind you that to be really valuable, every tech company must be, besides deep, also really open.
Funding tech that solves real problems is good. Funding tech that solves real problems in what is, long-term, the most robust, most sustainable way is even better. Let’s fund deep tech that is based both on “open source” hardware and software, and (unlike this shameful, shameful paper from MIT) on easily verifiable Open Data and Open Research.
If you know other real–I mean “deep”–tech stories we should cover, just let us know!
Marco Fioretti is an aspiring polymath and idealist without illusions based in Rome, Italy. Marco met Linux, Free as in Freedom Software, and the Web pre-1.0 back in the ’90s while working as an ASIC/FPGA designer in Italy, Sweden, and Silicon Valley. This led to tech writing, including but not limited to hundreds of Free/Open Source tutorials. Over time, this odd combination of experiences has made Marco think way too much about the intersection of tech, ethics, and common sense, turning him into an independent scholar of “Human/digital studies” who yearns for a world with less, but much better, much more open and much more sensible tech than we have today.
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