Deep tech is often defined as being start-up companies that develop new products based on ‘scientific innovation or meaningful engineering innovation’. This is as opposed to technological development driven by a specific customer demand.
Examples of deep tech include artificial intelligence, quantum computing and biotechnology. Many deep tech success stories started with work at universities and research laboratories, as addressing most deep tech problems means starting with ideas that require a great deal of initial experimentation and exploration. This has meant many of these ideas have been relatively slow to make it from lab to market, with an average time of 10 years to take drugs to market in the biomedical field.
However, for deep tech, this wait is often well-rewarded as many of the science-based technologies that are created this way are highly disruptive and have huge impacts both on their respective fields and more broadly. Despite the risks and slow realization times, international investment levels in deep tech are rising, as successful technologies have the ‘potential to drive entire industries towards sustainability’.
Canada has been home to several deep tech success stories, including Rubikloud, an AI startup that was acquired for $81.4 million and Cinchy, who raised $10 million to continue developing ways to create ‘data networks’ for seamless data access for businesses. Some of this is due to the strong history of innovation in Canada, supported by investment such as the Innovation Superclusters Initiative and other governmental programs.
One of the challenges in Canada for deep tech start-ups has been a historically low level of dedicated funding for this particular type of venture. This is in stark contrast to areas such as the EU that, in 2021, have increased their funding in deep tech startups over tenfold. The EU has also made the unusual move of taking part-ownership of the companies as a route to achieving this as a way of rapidly accelerating and fostering the technologies they create to remain competitive on an international scale.
However, the funding landscape in Canada is starting to change. 2021 saw the launch of the first dedicated deep tech venture fund, Boreal Ventures, as a partnership with Centech – a collection of universities based in Quebec. Boreal Ventures will be supporting companies in the pre-seed and seed stages with the intention to promote Canadian technologies on the international scene and will undoubtedly be a boon for innovation in Canada.
The growth of innovation in Canada already has many of the key ingredients in place. Canada already has a domestic highly skilled and diverse workforce, particularly in the field of engineering. Uptake of higher education is relatively high and there is a strong and internationally competitive series of universities, which can help foster the ideas that lead to the innovations that deep tech brings.
With ambitious governmental plans to drive innovation in Canada and new funding opportunities for deep tech, as well as the growing interest of existing investment firms, there are many exciting possibilities ahead for businesses and individuals interested in Canadian innovation.
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