Deep Tech Investments-A Rising Graph
Deep Technology involves using multidisciplinary or cross-sector existing or new advanced technology to find innovative and effective solutions (as product/service) to solve people’s life problems (social, environmental, healthcare, etc). Unlike shallow tech, deep tech is not about developing or improving technology. With so much promise to improve life, let’s see how the deep tech industry is evolving.
Global Deep Tech Investment Scenario (March 11, 2021 BCG report)
Deep tech investments (including private investments, minority stakes, mergers & acquisitions, and IPOs) across the world, quadrupled from $15 billion in 2016 to over $60 billion in 2020. USA, China, Europe, Israel, India are some economies working significantly on the deep tech niche. The investments are growing by leaps and bounds with the USA leading the deep tech development & investment, globally.
Top 7 Deep Tech Sectors According to Global Investment Made:
2020: Top 7 Deep Tech Investments Globally (Data: Hello Tomorrow-BCG; Image: TSS, India)
Countries Into Deep Tech Investments: A May 2021 BCG Hello Tomorrow report reveals of corporate venture capital (CVC) dominating the deep tech investment space. The average amount per private investment event for start-ups & scale-ups rose from $13 million in 2016 to $44 million in 2020.
According to most recent Hello Tomorrow survey, during 2016-19, the amount per investment event for early-stage start-ups increased from $36,000 to $2 million. A July 2019 BCG Hello Tomorrow report indicates that during 2015-18, USA (USD 32.8 billion) and China (USD 14.6 billion), together accounted for around 81% of global private investments in deep tech.
2015-18: Deep Tech Global Pvt Investment in USA & China (Data: BCG, Image: TSS, India)
Another region of focus in deep tech is Europe. Here is some insight as per a January 2021, Dealroom report.
2010-20: Global VC Investments in European Deep Tech Firms (Data (January 2021): Dealroom, Image: TSS, India)
2010-20: European VC Investments in Deep Tech Firms Globally (Data: Dealroom, Image: TSS, India)
Interestingly, while the USA still bags around half of global investment, but the funding growth rate is increasing faster in other countries exploring deep tech.
2015-18: Deep Tech Investment Growth Rate in Top 5 Countries (Data (April 2019): BCG, Image: TSS, India) (The figure in the brackets are the number of startups)
2018: Number of Declared Funded Deep Tech Startups in the Rest of the World (Data (2019): BCG, Image: TSS, India)
Despite all the promising scenario of deep tech’s life changing solutions development and growing funding, the sector faces funds challenges. Being research centric, the funds fall short. The investors are also shaky due to the uncertainty of type and exact timeline of the eventual prototype. But the investors will need to look beyond the time bound gains. They must help the deep tech startups devise a product or service that solves community related issues.
Comments
Post a Comment