SGInnovate, a Singapore government-owned venture firm that specialises in "deep tech", has issued a call for Australian investors to join its cause to work with scientists and grow the deep tech space.
SGInnovate founding CEO Steve Leonard explained how unlike consumer tech that is solving problems of convenience, deep tech -- such as medtech, artificial intelligence, robotics, quantum computing, and autonomous technology -- is expected to solve challenges faced by humanity.
"Deep tech startups continue to be a very minor percentage of what is happening in terms of new companies launching. That for me is an important problem because it says we are not working on things that will positively affect our collective future," he said.
"These startups are all great and we're fans of entrepreneurship, but we're most especially bigger fans of deep tech of startups."
Speaking at D61+ Live this week, Leonard believes investors currently shy away from deep tech investments because it's high in risk and the returns are not immediate.
"Investors always chase highest returns that have the shortest amount of time to realise a return with the lowest amount of risks, and none of those characteristics relate to deep tech," he said.
"Deep tech is a general statement; not only is there an executional risk but you also have technology risks … for us investors it's not a surprise, but we're trying to think of ways to attract other support into the ecosystem – investment support and corporate support."
Funded by Singapore's Ministry of Finance, SGInnovate has backed more than 70 local and foreign startups, which is equivalent to approximately SG$40 million, since it was established in November 2016.
Some companies that have received backing from SGInnovate include Taiger, AIDA technologies, and Melbourne-based See-Mode.
Leonard said the investments made by the company have been based on market-led trends and knowing that tangible use cases can be delivered, but it also avoided unicorns.
"We're not searching for unicorns; they're not good outcomes to pursue because we think they take us off the important work," he said.
"What we're interested in is are they gaining adoption by the end user? Are hospitals using this technology? Are industrial automation firms thinking about this technology? Are investors wanting to be part of this next round? -- that's what we pay attention to."
The amount is on top of the existing NZ$25.5 million that was allocated under the 2019 Budget to the New Zealand Technology Incubator program.
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Because investment risks typically are higher and returns slower with startups that deal with deep technology such as artificial intelligence and medtech, venture capitalists in Singapore are less willing to stick their bets in early-stage startups.
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