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The deep tech ecosystem, and the role of start-ups

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For a deep tech start-up to succeed, they need to stay ahead of the curve, adapt and form partnerships with larger corporations. Innovation must remain at the forefront of their work to retain a competitive edge. However, innovation is expensive and requires expert guidance to make its desired impact in the world. 

What is deep tech? 

Gradually, every company has become invested in technology. Digital technology has reshaped common practices at every step of the way. Deep technology, however, is more invested in the future – making advances to discover the next big thing. 

 

Deep technology is based upon finding solutions to problems with a global impact that may not have arisen yet. It disrupts existing markets by changing how we operate and respond to both technological and scientific challenges. It’s a key part of how we advance our scientific and technological knowledge across many different industries.

 

Investing in deep tech helps start-ups to advance in their chosen area of expertise and corporations can be a key stakeholder in their success.

A complex ecosystem

The deep tech ecosystem is complex and involves many stakeholders. These start-ups take many years to build and require significant research to ground themselves in market success.

 

Deep tech start-ups are expanding across many sub-sectors too; with advanced manufacturing & robotics receiving a 107.9% increase in early-stage funding in the past five years. 

 

An intricate and well-balanced part of the deep tech ecosystem are the relationships between start-ups and larger companies, often corporations or universities, to provide funding and guidance to start-ups.

 

As these deep tech start-ups expand their activities, they benefit from collaborations with large corporations to take their businesses to the next level. They look to become more agile, forward-thinking and business-minded. While innovation may be the focus for deep tech start-ups, business efficiency is still an important aspect of any successful venture and it can often go overlooked. 

The role of start-ups

Deep tech start-ups are expected to have a large influence over the United Nations’ Sustainable Development Goals (SDGs). Those of note include contributions towards health and well-being, industry, sustainable cities, responsible consumption, and production and climate action. 

 

However, they are also expected to face many challenges. For example, deep tech relies on innovation, which also welcomes patentable technology and many subsequent hurdles to take the product from research to market. This means it’s a lengthy process which requires larger amounts of investment capital to stay afloat, combined with the possibility that the research doesn’t work as expected.

 

Getting the start-ups’ research off the ground can often require a corporation. 

 

Taking new products to markets that are only recently emerging or are completely new poses another challenge for start-ups. It takes longer to earn back the investment capital when working in deep tech, so funding and sufficient R&D is essential. 

 

The key to overcoming these challenges are collaborations with larger corporations. With more investment capital and more experts to contribute their experiences and knowledge, the start-up is more likely to succeed. 

 

It’s risky to invest in deep tech – something that may not work as expected. However, it’s more risky for a start-up with limited resources than a corporation built upon many investors and other projects.

Collaborating to solve start-up problems

Larger corporations not only have more experience with understanding market needs, intellectual property law and fundraising, but are also a key point of business guidance for deep tech start-ups venturing into a competitive sector. 

 

BCG and Hello Tomorrow are two companies that try to connect deep-tech entrepreneurs with corporations and investors. Together, they’ve heavily investigated the deep tech ecosystem and what makes for a successful collaboration. 

 

One of the most in-demand factors that a deep-tech start-up looks for is a corporate partner, especially as it can be difficult to hit the ground running. Only around 10% of start-ups look for university funding, proving that corporations are still the most in-demand form of partnership. 

 

However, partnerships with corporations can be difficult to secure. They’re presented with a lot more opportunities to choose from and are at an advantage when deciding where to invest next. 

 

Additionally, from inadequate preparation on the side of the start-up to both parties failing to define the limitations and vision of their business partnership from the start, a lot can go wrong. Both the start-up and the corporation must consider the partnership fully and how they will work together before continuing. 

 

Funding is a top consideration for deep tech start-ups as one of the main drivers of their progress. According to BCG, 80% of start-ups consider it in their top three priorities when looking to secure a partnership. They also highly value market access, technical expertise and business expertise. 

A final note

Corporate partners can act as that much-needed boost for start-ups wanting to take their research off the bench and into the market. However, it’s not as simple as securing the first available partnership. 

 

From both sides of the partnership, there’s a lot to consider and a well-considered and well-defined partnership is more likely to succeed. If you’re looking to invest in or launch your own deep tech start-up, it’s important to dive in fully aware of the current ecosystem and its challenges. 

 

Open doors to the future with The Collider 

 

Ensuring that the most innovative and promising deep tech start-ups find the funding they deserve, The Collider brings together researchers, corporates and entrepreneurs to enhance our ecosystem and create a positive impact. This venture-building programme, powered by Mobile World Capital Barcelona, aims to drive the transformation of society through tech transfer initiatives.