Deeptech, the new wave of innovation
by julia gil
In a world full of challenges, deeptech startups are emerging as a new wave of innovation. This area of business and research, harness advanced science and technology to address complex, global problems with disproportionate impact. Poverty and inequality; resource scarcity; physical and mental health; climate change; privacy and cybersecurity; and freedom and sovereignty are just some of them.
In Europe in 2023, funding for these deep tech companies remained at the same level as in 2022, while investment in the rest of European tech was significantly lower, according to Dealroom.co’s European DeepTech Report. Specifically, Spain ranks eighth at the European level in terms of receiving venture capital funds, with a total of $310 million.
An example of this, is the venture capital manager Big Sur Ventures, which has firmly committed to investing in deeptech, as a leader or as a shareholder, in startups such as Paack (last round of 200 million euros in January 2022), a company dedicated to ecommerce parcel delivery, or Truckster (last round of 33 million euros in July 2023), a technology transport operator. With the launch of investment vehicles, the latest with a target size of €40 million, Big Sur invests in early and seed stages of such technology startups, with stakes of between €100,000 and €1 million.
“The great global challenges we face, be it energy, healthcare, mobility, decarbonisation, are not going to be solved with software alone, that is obvious. We need new materials,” says José Miguel Herrero, co-founder and managing director of Big Sur. “The solutions we need for these global challenges come largely from deeptech and that’s why we are there.
His current portfolio also includes the company Frenetic, which specialises in the design and manufacture of magnetic and electronic components. Founded in 2015 by Chema Molina, a doctor in industrial electronic engineering, who, after years of research and collaboration with various companies, managed to reduce the time to market of these components by more than 90%.
In November 2018, venture capital manager Big Sur Ventures led its first investment of €350,000 in Frenetic, and subsequently participated in three others. In July 2019 they closed a €1.3m round, in September 2021, they raised €4.5m, and the last one, in November last year, in which they raised €11.2m.
“He is the first venture capitalist to come in and he brings other investors on board. It allows us to have easier access to capital”, says Chema Molina, explaining the great challenge it was for them to make themselves known on the venture capital investors’ map. Previously, they had only received money from public investments or family friends.
The latest round of 11.2 million euros has allowed them to expand into the US market, with the opening of an office in Sillicon Valley, San Francisco, and to allocate resources to reduce the manufacturing of components from the current 9 months to just one week. In total, the company has managed to raise a total of 17.7 million euros and has clients such as Apple, Cupertino, aviation companies, Porsche and even NASA.
