Investment in deep tech startups has increased by 165 per cent from 2020 to 2022.
But while deep tech startups are enjoying increasing attention from investors, there are still some challenges both for the startups and the investors to address. For example, startups in the deep tech space are generally seen as riskier due to longer gestational periods and higher R&D investment.
From the perspective of the startups themselves, deep tech startups are also particular about the investors they engage with — and for a reason.
“With the market flush with liquidity, the biggest challenge is finding the right investors with aligned vision, who can understand the industry and more importantly visualise how the technology transforms the industry,” said Alan Lai, founder and CEO of Singapore-based AI-powered food fingerprint platform Profile Print. “We met many financial investors who may not fully comprehend the technology and have little experience in the B2B space.”
Walter H. Gunzburg, founder and CTO of biotech startup Austrianova, echoes this sentiment. “We are a platform technology company with a business to business (b2b) commercial model. This appears to fall outside of the remit of many investors, many of whom still like the classical biotech company model of taking one or more lead products and then burning cash during the R&D, pre-clinical and clinical phases, in the hope that one product will make it to the market.”
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Keith Tan, CEO of robotics company Crown Digital, shared “our biggest challenge was most VCs in this region don’t invest in hardware startups. As a full-stack startup, we design and build the hardware and software, as well as develop a successful business model — challenging tasks for a bootstrap startup during our initial days. We had to get all this done with minimal resources.”
In addition, the development stage for deep tech startups is different from other sectors not just in the length of time but also in the process. This means that deep tech startups need to find other creative ways to get the resources they need.
“[We have moved] to a model in which we generate revenue from day one by working with multiple partners on multiple projects. Our partners pay for our work, as well as the big-ticket items such as clinical trials,” added Gunzburg.
What deep tech startups need, Lai says, is support beyond the money. “[Deep] tech startups cannot afford to bring in investors who are not able to add value beyond pure capital.”
Leave a Nest: funding, expertise, and network
With the vision of “Advancing Science and Technology for Global Happiness”, Leave a Nest aims to support startups that aim to use cutting-edge technology to solve the world’s problems. One way in which is providing funding for startups, particularly in the deep tech space.
Having been founded by and made up of researchers, Leave a Nest adopts a long-term perspective when it comes to supporting startups and developing technologies. This is reflected in how they engage with the startups that they fund, by first understanding the deep technology behind it and taking time to know the founders.
“What we value working with Leave a Nest is…more importantly the ability to understand our business and provide useful guidance to help us grow,” said Lai.
“The startup ecosystem in Japan is still at its nascent stage and often, Japanese corporates may not fully understand the roles and responsibilities from the corporate’s standpoint when it comes to startup investing. This is where the Leave a Nest team really brings value in supporting and communicating with both parties to find the best solution,” shared Tan.
He further explained, “this requires strong networking, matchmaking capabilities, and staying close to the startup — hearing their challenges and providing solutions. Leave a Nest with its wide network of investors and partners has been really beneficial to Crown’s entry into the Japanese market and the way they have provided support to Crown has been like a family.”
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How Leave a Nest supports startups is through a multi-pronged approach. In terms of funding, Leave a Nest — with the help of two investment vehicles — offers check sizes ranging from 1 to 3 million USD (Real Tech Holdings) depending on the startup stage. Leave a Nest envisions having a deep tech investment support system that does not only support at an early seed stage (Through Glocalink Singapore and Leave a Nest Capital), but also nurtures them so that Real Tech Holdings can do follow on investments at a later stage.
Apart from funding is the equally important support they gain from Leave a Nest itself and its network of researchers, innovators, investors, and corporates — aspects that Austrianova found valuable and suited to their needs.
“They were (and are) professional, efficient and friendly. It is always a real pleasure to meet with them and discuss ideas, take part in the events they organise,” said Gunzburg. “They also have provided us with advice, particularly on the Japanese market and have even introduced us to two leading Japanese companies as partners/clients. As a result of their efficiency, the whole investment process was quite fast and extremely well organised.”
Leave a Nest investment vehicles
Leave a Nest funds startups through two investment vehicles: Glocalink Singapore (GLSG) and Real Tech Holdings (RTH).
Glocalink Singapore is an investment company comprised of Leave a Nest Co., Ltd., Euglena Co., Ltd., FTV Labs, and Kobashi Holdings Co., Ltd. that aims to provide seed funding for startups focused on agriculture and food technologies.
Led by a group of seasoned serial entrepreneurs with backgrounds in biotech, agricultural machinery, education, and food and technology, Glocalink Singapore offers early-stage startups much-needed funding as well as additional support via their network of corporations, technologists, and investors.
Their portfolio includes startups with a wide range of solutions like increasing agriculture productivity, decreasing food waste, and developing robotics in food production.
Real Tech Holdings is a VC fund established jointly by Leave a Nest and biotech company, Euglena, with the aim of providing support for deep tech startups that offer solutions for life science, aerospace, robotics, agriculture, medical devices, marine technology, electronics, energy and new materials.
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Because Real Tech Holdings focuses on startups that aim to address some of the world’s most pressing problems, they also work in close cooperation with governments, corporates, and municipalities to be able to accelerate and maximise the implementation of these solutions.
Their portfolio includes startups with solutions such as the development of medical devices, food culture, and drone solutions for infrastructure inspections.
Through Glocalink Singapore and Real Tech Holdings, Leave a Nest is able to offer early-stage deep tech startups both funding and support from development to implementation.
For more information, you can visit the site.
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This article is produced by the e27 team, sponsored by Leave a Nest
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