The startup scene of Europe is overshadowed mainly by achievements of the Silicon Valley. However, Europe is also gaining significant ground homing over sixty tech startups with a valuation of over one billion dollars.
Here we have dug into some data, challenges, and strategies behind most European scaleups and startups. This helps in determining which companies are going to disrupt in 2021. But before we dive into the list of these companies, let us first understand what deep tech is.
What is Deep Tech?
Deep tech is a generic term used for technologies that are not aimed at end-user services, including:
- quantum computing
- electronic and photonics
- advanced material science
- Artificial intelligence etc.
It has been identified as an investment category since the inception of the tech industry itself.
Like other sectors, deep tech has been in and out of the spotlight according to the changes in the wider climate. For example, during the glory days of the adoption of mainstream tech, deep tech became obscure under the radar as big-ticket apps, services, and other gadgets became popular among consumers.
What are the three characteristics of Deep Tech Startups?
Deep tech has a significant impact and has the potential of generating enormous economic value, disrupting other escorts and making other businesses irrelevant. Creating their markets can describe profound tech innovations as novel technologies offering significant advances compared to those in use currently.
Moreover, these technologies tend to address an important environmental and societal challenge that likely helps solve some of the crucial global problems.
Scale and Time
Deep tech has been developed after years of lab testing and research; these innovations take time, moving to technology from basic science to be applied for actual use.
The study used for deep tech usually leads to different IP or patent ownership forms, making it challenging for the competitors to look for replications. The actual commercial success of deep tech can also take a long time as it is a highly disruptive technology, taking a long time to attain actual market adoption.
Moreover, the time required for reaching market-ready maturity majorly depends on the technology.
For example, BCG and Hello Tomorrow conducted the report “The Dawn of the Deep Tech Ecosystem”, which showed that it takes four years to develop bitcoin technology on average. In contrast, it only takes 2.4 years to build blockchain technology for a startup.
For most deep tech companies, funding is a significant challenge as their resources, skills, and infrastructure require significant funding capacity for an extended period. As a result, various startups from the deep tech sector look for funding during the early stages of research, primarily years before the technology is even near to being market-ready.
Simultaneously, due to the complex nature of deep tech startups, early-stage investors like business angels struggle in understanding their potential.
However, investments in the deep tech startups of Europe have also increased significantly in the past few years. The assets rose to 8.4 billion dollars in 2019 from 3 billion dollars in 2015.
Moreover, deep tech startups hardly follow the standard funding road that most regular tech startups follow. Hence, deep tech companies majorly depend on corporate venture capital and public funding due to their resource requirement for research and development. Besides, accelerators and incubators are vital partners as they offer financing with other forms of support.
Europe’s 7 Deep Tech Startups:
Based in London, an artificial intelligence company transforms global information into actionable, accessible business knowledge and empowers leaders across industries to make confident and informed decisions.
An artificial intelligence voice platform at Paris, offering developers and enterprises private-by-design and offline conversational interfaces for animating interactions with products.
An artificial intelligence-based platform, Medicus transforms health data into interactive experiences with innovative well-being coaching, personalized health insights, and easy-to-understand explanations.
Located in London, Disperse is a building productivity system offering AI-powered construction solutions developed to capture visual data from the building projects and turn it into usable data for productivity initiatives.
An industry-leading technology company that specializes in Computer Vision and Augmented Reality. Their vision is to use Augmented Reality for enhancing everyday life and thereby provide more value, information, and entertainment that meets the eye.
The supplier discovery suit of Scoutbee allows procurement leaders to make confident buying decisions. Founded by procurement experts, their customers include Siemens, Audi, Airbus, and more.
A quantum algorithm and computing software company, CQ allows its customers to use their quantum computers to the fullest. Their focus areas include quantum cybersecurity, quantum natural language processing, quantum machine learning, and quantum chemistry.
Hence, it can be seen that most European startups are using artificial intelligence as their platform and framework. However, scaling these European startups is a long process that would require continuous investments starting from the tech stack and moving upwards.