Over the last years we have seen an increasing interest in deep-tech investments across Europe. Especially in Greece, there is currently strong momentum around the development of technology transfer in universities and research centers. However, we need to address a significant gap: the underutilization of research outcomes. We have outstanding researchers that are highly competitive in securing research grants, but we have a poor track record in bringing innovations to market. This needs to change.

The Unique Nature of Deep-Tech Investments

Deep-tech investments differ from other types of investments primarily due to the role of deep know-how and intellectual property (IP). Often, these involve research outcomes that have been developed over many years, giving a product or service a unique and thus strong competitive advantage. The research team that has created this unique IP plays a crucial role in its development. However, these teams often lack the business skills or focus required to bring their innovations to market.

Since 2018, uni.fund has invested in many deep-tech companies, alongside other startups. With a portfolio of over 35 companies, we have identified the following key differences between deep-tech startups and the rest of our portfolio:

• The value of a deep-tech company is highly dependent on the uniqueness of its technology,
• The competitive advantage provided by IP lasts longer compared to companies offering non-defensible products or services,
• Deep-tech companies face greater challenges in generating revenue and rely more heavily on external financing.

The most effective approach appears to be a mixed strategy, combining venture capital funding with non-dilutive equity grants and market-generated revenue.

The Role of the Team in Commercializing Technology

A critical factor in deep-tech startups is the team’s ability to commercialize the technology. We can identify three different scenarios:

1. The research team has both the technical expertise and the business skills to drive commercialization. This is the best-case scenario, as the people who understand the technology deeply are also passionate about selling it and drive business development.
2. The research team has the technical expertise and IP but understands that it needs to be complemented by business development and commercial experts. The challenge here lies in team formation, collaboration, and the time required for members to understand and work effectively with each other.
3. The research team lacks business acumen but is unaware of it and undermines the importance of business decisions. This is a common issue, as researchers often suffer from the “I know everything better” syndrome and believe that technological superiority alone guarantees success, neglecting the need for a solid business strategy.

The Role of big corporations

In all the aforementioned scenarios, collaboration between a deep-tech startup and a large corporation, whether as a customer or a partner, can be pivotal to the startup’s success while the big corporation can get significant competitive advantage by leveraging existing assets and market networks. Big corporations can provide deep-tech startups with several advantages, including:

• Access to Markets: Established corporations have extensive distribution networks and customer bases that can be leveraged by deep-tech startups to reach a wider audience and accelerate market penetration.
• Resources and Funding: Large corporations have significant financial resources and can provide deep-tech startups with the funding they need to develop and commercialize their products or services. Additionally, corporations can offer access to research and development facilities, manufacturing capabilities, and other resources that may be beyond the reach of early-stage startups.
• Expertise and Mentorship: Corporate partners can offer valuable expertise and mentorship to deep-tech startups, helping them navigate complex regulatory environments, develop business strategies, and overcome operational challenges.
• Credibility and Validation: Partnering with a recognized corporation can lend credibility and validation to a deep-tech startup, enhancing its reputation and attracting further investment and partnerships.

While the benefits of collaboration with big corporations are clear, it’s important for deep-tech startups to carefully evaluate potential partners and ensure that the relationship is mutually beneficial. Startups should maintain control over their intellectual property and be wary of becoming overly reliant on a single corporate partner.

Successfully addressing the above challenges is crucial for building sustainable deep-tech companies and fostering innovation in the market.