The rising popularity of the Web3 space means investors are flocking to invest in companies in the space, but Vickers Venture Partners does not follow through.

In a written interview with e27, when asked about why the firm is not enthusiastic about the Web3 space, Chairman and Founder Dr Finian Tan replies, “The simple answer is that it doesn’t meet our criteria.”

The criteria that Dr Tan speaks about centered around its ESG & Sustainability efforts focus.

“When we started our ESG journey in 2008, it was primarily a negative screening process where we did not invest in ‘bad’ companies. Our OB markers included the so-called ‘sin stocks’ such as gambling and companies with poor HR policies (e.g. the use of child labour),” he writes.

“Today, our starting premise is that our capital should not just avoid ‘bad’ companies but also push humanity forward somewhat. Hence our ESG & Sustainability efforts focus on the theme of Funding a Better World. This is reflected in the portfolio companies we invest in, and is in line with the efforts we have taken since 2019 to incorporate the assessment of impact (aligned with the UNSDGs) in addition to the assessment of sustainability risks and other material ESG factors.”

In conclusion, the firm believes that deep tech companies are the ones that are “most likely” to help solve some of the most pressing global issues today. As a result of this thought process, Vickers Venture Partners says that at least 80 per cent of its fund has been allocated to relevant innovation in the tech industry.

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To better understand its focus on the deep tech space, in this interview, Dr Tan reveals the characteristics that the firm is looking for in a potential investment and the kind of support that Vickers Venture Partners can provide to the company while busting some myths on deep tech investment at the same time.

Deeper into the deep tech scene in Southeast Asia

As a firm, Vickers Venture Partners does not specifically focus on Southeast Asia, but they have begun to see more deep tech startup activity growing in the region. Some of the deep tech companies that it has invested in are based in Singapore.

“When looking at opportunities, we generally look at emerging technologies based on scientific discoveries or engineering innovations in expanding fields such as biotech/healthcare, AI, and nanotechnology. And these technologies are seeking to tackle some of the world’s fundamental challenges. We typically come in and invest in these companies when they have already developed a proof of concept and need funds to scale,” Dr Tan says.

Despite the community of deep tech startups in SEA countries such as Singapore, the deep tech sector is not exactly a fan favourite in the region.

“Deep tech companies are usually built around a novel technology that offers breakthrough advances over existing solutions in the market. Taking these technologies from ‘lab to market’ requires substantial capital carrying high risk,” Dr Tan explains.

However, he also stresses that this is the case with venture investment in any vertical.

“We would like to think that deep tech investments reduce the number of risks because it involves a solution to a known and ready problem, whereas a general venture capital investment might involve a solution that doesn’t yet have a problem,” Dr Tan points out.

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“For example, we didn’t know we needed a TikTok until there was one. Furthermore, there is often a winner-takes-all in the consumer space. In the deep tech space, market risk is reduced to a minimum and focussed risk to the technology where it is possible to mitigate it with good technical understanding and foresight,” he continues.

Innovation that excites us

When looking at a potential investment, Vickers Venture Partners considers several criteria that include:

– The technology: A breakthrough product that does not currently exist in the marketplace
– Market risk: The product has to service a large market with known and ready demand
– Intellectual Property (IP): The product’s IP can be protected

In its portfolio, Dr Tan names several innovations that the firm finds to be “really exciting” that includes medtech innovations such as the next-generation x-ray systems developed by Lumitron Technologies that are capable of ultrahigh­-fidelity imaging (1000x more resolution) and ultra­-low dose radiography (100x less dose).

“They’ve achieved this by developing a new laser technology that shrinks the capabilities of a football field-sized synchrotron, onto a tabletop device. This could be a paradigm shift for medical imaging and cancer therapy but also has other applications in non-destructive evaluation and mining,” Dr Tan says.

The firm has also invested in RWDC Industries (which has developed a product to replace petroleum-derived plastic materials) and Eavor Technologies (which has developed a geothermal energy solution that has the advantage of no fracking, no GHG emissions, no earthquake risk, no water use, no produced brine or solids, and no aquifer contamination).

“Others like Emergex Vaccines are on the cusp of developing synthetic universal vaccines that reinvent the way vaccines are currently developed and administered and AWAK Technologies has a portable dialysis machine which will improve the quality of life for chronic kidney disease patients everywhere,” Dr Tan says.

Also Read: How to build deep tech startups across borders

What is next

During this pandemic, Dr Tan says the firm has been busy raising its US$500 million plus capital for its latest funds, the SPACs, and co-investments into their portfolio companies.

For 2023, Vickers Venture Partner aims to focus on taking its portfolio companies across their respective milestones and proving out the original thesis of the investments.

“The world will go through a very rough period ahead, so we are bracing ourselves to assist our companies through these challenging times. But we are optimistic that as long as our tech proves out as expected, we will be able to make the impact we set out to make. 2023 is going to be a very interesting year for Vickers,” he closes.

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Image Credit: Vickers Venture Partners

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