The document presents an overview of deep tech investment, highlighting SOSV's role in funding early-stage deep tech startups, particularly in sectors like biotech and food. It discusses deep tech's potential to address significant challenges while outlining current trends, notable investments, and biases that investors face. The presentation emphasizes the importance of understanding the unique risks associated with deep tech and the diverse opportunities it presents across various sectors.

1. Funding
DeepTechStartups
www.slideshare.com/sosv
Benjamin Joffe, Partner
benjamin.joffe@sosv.com
@benjaminjoffe
November 2019

2. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

3. About SOSV
Deep Tech & Hands-on
$250m Global Fund ($650m AUM)
Early Stage
Deep Tech
Hands-on programs
with Labs & Experts
150 investments per year
Hardware, Biotech, Food…

4. DeepTech
Trends2019
Ireland
Back office
London
Biotech
Paris
Liaison
Taipei
Mobile
Shanghai
Cross-border web
Shenzhen
Hardware
SF
Hardware
Biotech
NYC
Food
Blockchain
Tokyo
Hardware
Global Presence

5. FormLabs (3d printing)
GetAround (car sharing)
BitMex (crypto exchange)
Jump Bikes / Uber (e-bikes)
Geltor
Synthetic human collagen
Raised $23m
SOSV Top Startups
DeepTech
Trends2019
Perfect Day
CellAg Dairy
Raised $61.5m
Memphis Meats
CallAg Beef & Chicken
Raised $20.1m
Avidbots
Floor cleaning robot
Raised $26.6m
Simbe Robotics
Retail inventory robot
Raised $26m
Nura
Personalized audio
Raised $21.9m
www.sosv.com/portfolio
Makeblock
STEM robots
Raised $80m
Portfolio Sample

6. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

7. Deep Tech by any Other Name…
Deep Tech
Science Tech
Hard Tech
Tough Tech
Physical Tech
DeepTech
Trends2019
Emerging Tech
Future Tech
Frontier Tech
Extreme Tech
Dirty Tech

8. Defining Deep Tech
Science
&
Engineering
“Anything that’s
not an app”

9. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

10. Deep Tech &
Food This logo means
we invested in
the company

11. Distribution
Preparation
Production
Type

12. Distribution

13. We all know On-Demand

15. What about Unmanned Retail?

16. BingoBox— $94.7m

17. Preparation

18. Robot Cooks

19. Zume Pizza — $423m

22. Spyce — $25.9m

23. Micro-retail + Health
= Fresh Food Machines

24. Cafe X — $14.5m

25. Frobot Bowl

26. Production

28. Plenty (vertical urban farm) — $266m

29. FarmShelf — $6.4m

30. Food System
Avoiding Spoilage & Food Waste
Recycling & Upcycling

31. Wasteless (dynamic pricing)— $4.2m

32. After
10 days
Uncoated
Coated
Cambridge Crops (thin edible & tasteless coating)— $4m

33. Livin Farms (edible insect farm)

34. Prejudice against new food is not new…
‘Cockroach
of the ocean’‘Devil’s fruit’

35. Just don’t look at them up close ;)

36. Type

37. Clean Protein
A major trend for health & environment

38. Animal
Protein
Issues
Suffering
Land use
Water use
Greenhouse gases
Antibiotics
Antibiotic resistance
As there are many issues with animal meat

39. So far most people heard of ‘plant-based meat’
(IPO for $billions)

40. Is this IPO the first sign of ‘The Twilight of the Cow’?

41. Stem Cells Yeast Bacteria
There are many ways to make animal-free protein

42. Cost per
raw megabase
of DNA sequence
Cost of DNA sequencing fell
DeepTech
Trends2019

43. Impossible Foods raised $687.5m for plant-based meat

44. Heme
Soy Legume hemoglobin
from GMO Yeast Fermentation
Their burgers ‘bleed’ thanks to heme

45. Memphis Meats (beef & chicken protein)— $20.1m

46. Perfect Day (milk whey & casein) — $61.5m

47. Bisu (Urine test)
Diet, metabolism & hormones
Caura
Lactate & glucose tracking
BBB — Blood test
Glucose, ketones, cholesterol —$21.5m
Digital Diagnostics
Replacing lab tests?

48. Human Microbiome
‘The Second Brain’
2 kg of bacterias
1,000+ species
3 million genes
(150x humans)
Our microbiome also determines how we respond to food

49. FoodMarble — $1.4m
Tests your digestion through your breath, sold >10,000 units

50. Sun Genomics— $3m
Designer probiotics based on microbiome

51. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

52. Risk Timing
Execution
Those risks are common to all startups

53. Timing
Risk
18 months is great
3 years is terrible
Getting to market / the next milestone in 18 months is great.
Longer makes it harder to fundraise.

54. Risk Timing
Execution
Science
Regulation
Deep Tech startups add two forms or risk

55. Why
Deep
Tech?
Impact
Real Needs
Alpha
Underfunded

56. Why
Deep
Tech?
Deep Tech can solve big problems with big impact

57. Why
Deep
Tech?
High-Tech
Wholesale/Retail
Finance/Insurance
Energy
Industrials
Consumer Good
Transportation/Logistics
Business Services
Health Care
Media/Entertainment
0 25 50 75 100
16
21
22
35
41
41
60
79
87
98
Fortune 500 Companies by Sector, 2017

58. Why
Deep
Tech?
High-Tech
Wholesale/Retail
Finance/Insurance
Energy
Industrials
Consumer Good
Transportation/Logistics
Business Services
Health Care
Media/Entertainment
0 25 50 75 100
16
21
22
35
41
41
60
79
87
98
Fortune 500 Companies by Sector, 2017
0 10 20 30 40
0
27
0
31
6
3
10
0
1
17
There are opportunities in many sectors
Number of Deep
Tech Startups

59. Why
Deep
Tech?
AND offer good returns

60. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

61. 1 in 5 Unicorns is in Deep Tech
LIFE SCIENCES — 17
Henlius
Novogene
Sinocelltech
WuXi NextCODE
CureVac
IronSource
Nanopore
Roivant
10X Genomics
23andMe
Ginkgo BioWorks
Grail
Human Longevity
Indigo Ag
NantOmics
Samumed
Tempus
Envision
Prologium
Northvolt
Ovo Energy
ReNew Power
ChargePoint
Microvast
Rubicon
Sila Nanotech
View
NEW ENERGY — 10
Aiways
BAIC*
Bordrin
Byton
Chehejia
Enovate
Hozon
Leapmotor
Nio*
Singulato
Skywell
WeltMeister
Yinglong
Youxia
Xpeng Motors
Aurora
Cruise**
Faraday Future
Nikola Motor
Otto**
Rivian
TuSimple
Zoox
AV/EV — 23
Hellobike
Mobike**
Bolt
Ola Electric
Bird Rides
Lime
Uber ATG
MOBILITY — 7
Ankon
iCarbonX
United Imaging
Alphaeon
Auris**
Butterfly Network
HeartFlow
MindMaze
Proteus Health
SmileDirectClub
HEALTH TECH — 10
DJI
Geek+
Ninebot
Ubtech
Nuro
Zipline
Zume
Carbon
Desktop Metal
Formlabs
Magic Leap
MindMaze
ROBOTICS — 7
3D PRINTING — 3
AR/VR — 2
SPACE TECH — 4
OneWeb
Rocket Lab
SpaceX
Virgin Galactic*
US
China
RoW 14
33
48
Cambricon
Horizon Robotics
Graphcore
OrCam
Bitmain
Canaan
Ebang
BitFury
IC & SEMI — 4
CRYPTO MINING — 4
IOT — 2
Nest**
Infinidat
* IPO
** M&A
100 Unicorns Soon
Sources: Crunchbase,
Hurun Report, SOSV Analysis
Beyond Meat*
Impossible Foods
NEW FOOD — 2

62. EUROPE
Oxford Sciences Innovation (UK) £450m
High-Tech Gründerfonds (Ger/EU) €316.5m
IQ Capital (UK) $300m
Ahren Innovation Capital (UK) $250m
Inventure (Nordics) €110m
USA btov (EU) €100m
Lux Capital $1.1b NordicNinja (Nordics & Baltics) €100m
Data Collective $725m Karma Ventures (EU) €70m
Eclipse Ventures $500m Elaia (EU) €65m
OS Fund $250m Adara Ventures (EU) €65m
The Engine $205m Future Positive Capital (EU) €51m
Future Ventures $200m Voima Ventures (Nordics & Baltics) €50m
Anzu Partners $150m Vito Ventures (EU) €30m
Bolt $80m Apex Ventures (EU) €10m
Root Ventures $76.7269m
Runa Capital $70m OTHER
Main Sequence Ventures (Australia) $240m
GLOBAL Abies Ventures (Japan) $100m
SOSV $250m Beyond Next Ventures (Japan) $50m
Entrepreneurs First $115m Real Tech Fund (Japan) $18m
Hardware Club $50m Pi Ventures (India) $31m
Some Deep Tech VCs
>$5b to invest
DeepTech
Trends2019Note: Chinese funds are mostly generalists.

63. Some Specialists
DeepTech
Trends2019
Many active generalists
Some specialist funds

64. Notes: most are B2B
* includes co-investors
SoftBank
Vision Fund
DeepTech
Trends2019
Company Type Sector Funding*
GM Cruise B2B AV tech $2.25B
View B2B Smart glass $1.8B
Nuro HAAS Delivery AV $1B
Zume HAAS Pizza robot $423M
Plenty B2B AgTech $226M
Light Consumer Cameras $186M
Nauto B2B Driving Coach $174M
Brain Corp B2B AV Tech $125M
TOTAL $6.1B*

65. Lytro
$216M
Jibo
$72.7M
Anki
$182M
Meta
$73M
Laundroid
$95M
$2.7b of
Failures
Rethink Robotics
$150M
Airware
$118M
Theranos
$1.4B
Daqri
$275M
uBiome
$109.9m

66. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

67. Stages
Idea
Lab
Prototype
Product
Growth
Who can take you to the next step?

68. Ecosystem
Resources
Funding
Talent
Tools
Clients
You might need to leverage several ecosystems

69. Minimum
Fundable
Milestone
Not always product!
Specific
Customer?
Team Member?
Certification?
Make sure to identify the right milestone for the next round

70. New Models
Supporting Science Startups
To go from Lab to Market
i-Corps (~100 locations in US)
7-weeks coaching program
Created by Steve Blank
Focus on customer development
Entrepreneur First (7 countries)
‘Talent investor’
14 weeks program
Team formation + idea validation
Deeptech Founders (France)
6 months part-time program
Focus on customer development
SOSV (global)
‘Hands-on VC’ with experts & labs
3+ months programs
Product & business development
Non-investing Investing

71. Questions
Do you need a PhD in
everything?

72. Questions
Do you need a PhD in
everything?
How to avoid
the next Theranos?

73. Science
Risk
Patents?
Prototypes
Experts
Customers
You can reduce the science risk by using experts

74. Founders
Risk
Give up early
Severe Asperger
Can’t execute
‘Artist’
Silicon Valley Burn Rate
Caught Up In ‘Startup Theatre’
Can’t get along
‘Maker’ Addiction
DeathHarassment
1 2
3 4
5 6
7
8
9 10
At early stage the biggest risk is Founders Risk

75. Founders
Risk
Inventor
Engineer
Entrepreneur
CEO
Founders might not be able to cover key roles

76. ‘Right Brain’
Intuitive
‘Left Brain’
Rational
HBDI Herrmann Brain Dominance Instrument
We use this test to identify ‘mental diversity’ gaps in founding teams

77. HBDI Herrmann Brain Dominance Instrument
Spock
Rational & logical
Scotty
Processes
Kirk
‘The final frontier’
Bones
People
Teams often need to find a Scotty and a Bones

78. Agenda
1. SOSV Intro
2. Defining Deep Tech
3. Deep Tech & Food
4. Why Invest
5. Investment Landscape
6. How to Invest
7. Deep Tech Biases

79. Biases
1. Star Wars bias
2. Ugly Duckling bias
3. Make-up bias
4. Darwin bias
Four biases we had to learn about the hard way…

80. Biases
1. Star Wars bias
2. Ugly Duckling bias
3. Make-up bias
4. Darwin bias
We grew up with sci-fi and get excited when we see it come true

81. Star Wars bias
Anything that look like science fiction is suspect

82. Electroloom
Revolutionary fabric 3d printing technology?

83. Worked… somehow. But no market.

84. Unspun
Bespoke jeans
Lower tech, but much more viable

85. Boring & Viable
Those robots target clear markets

86. Rebartek
Construction tech robot. Boring?

87. Wow & Profit are often Orthogonal
Lower tech, but much more viable

88. Biases
1. Star Wars bias
2. Ugly Duckling bias
3. Make-up bias
4. Darwin bias
Early tech can look bad

89. Ugly
Duckling
But sometimes the value is already there

90. Simbe Robotics
This is an early prototype. The tech was mostly there!

91. Simbe Robotics
Three months later it looked great. Raised $26M series A

92. Biases
1. Star Wars bias
2. Ugly Duckling bias
3. Make-up bias
4. Darwin bias
Looks can also be deceiving

94. Nura
Nura can personalize the sound to your hearing

95. Nura
What is the difference between the two?

96. Prototype
May 2016
Product
Jan 2018
Nura
Investing just before production is sometimes great timing.

97. Nura
Nura raised a $21m series A.
Stevie Wonder
bought 3 pairs

98. And the best product is often the second

99. Trajectory
YEAR 1
YEAR 5
SaaS
Deep
TechSWEET SPOT
FOR SEED?
Find the right timing balancing risk & opportunity

100. Biases
1. Star Wars bias
2. Ugly Duckling bias
3. Make-up bias
4. Darwin bias
Great ideas are hard to recognize.

101. “The year has not been
productive in contributions
of interest and value”
Thomas Bell (1858)
President, Linnean Societ
Experts did not care much for Darwin’s theory at first…

102. He was even mocked…

103. Many of tomorrow’s successes are already around us
Looking Glass holographic display

104. www.slideshare.com/sosv
Read
Contact
Thank you!
benjamin.joffe@sosv.com
www.sosv.com/deeptechtrends
Deep Tech Trends Report (119 pages, free)