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Deep Tech companies work on technology that addresses problems and are solutions‐ oriented. We invited a distinguished panel of experts to unravel the nuances of this emerg‐ ing tech space.
Pravin Shekar, Hon. Secretary, TiE Chennai
Aerospace;
W
technologies; Telecom and Infrastructure. The Covid
e have recently formed a core group in TiE and its objective is to help democratize deep tech; to bring a deeper understanding
of its facets to the community and to ensure that we are able to work with the ecosystem of startups and to work with institutions to foster the deep tech growth
in the country.
Cleantech;
Industrial
vaccine itself is one of the deep tech projects.
Deep tech and startups Of course, all startups have to solve a problem but the deep techs look at solving some fundamental problems. 97% of the startups in deep tech domain goals (SDGs) of the UN which include removal of poverty, hunger, providing clean energy and smart
Deep Technology (Deep tech) or hard tech is a classification of organisation or more typically a startup company with the expressed objective of providing technology solutions based on substantial scientific or engineering challenges. The key technology areas are: Biotech, Robotics, AI/ML, AR/VR, Blockchain, Advanced material science, Photonics and electronics and Quantum computing.
cities. The second is, there is always a convergence of technologies and 96% of the deep tech startups have a combination of multiple technologies like AI with robotics. The third is, they produce products and all of them own a certain IP, which is a very valuable component.
The key application areas are: Lifesciences and healthtech; Food and agritech, where we are trying to use robotics and drones to increase production; 10
and
address at least one of the 17 sustainable development
What is deep tech?
MAY 2022
Energy
The last is, they are part of the huge ecosystem. According to NASSCOM, 12% of the new startups use some of the technologies like AI, ML, IOT, Robotics.
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Lakshminarayanan, Co‐founder & Emeritus Vice Chairman,
In Quadrant 1 (Top Left), the intensity of fundamental
Cognizant
research is very high but there are very limited
D
efining Deep tech would be limiting its scope. However, there is a good and popular model that is available to understand all that is
associated with research- both fundamental and applied- in the areas of science and technology. It is called the ‘Louis Pasteur's quadrant,’ as shown in the figure. It is a two by two matrix and simple to understand. On the X-axis, we have the intensity of application and on the Y-axis, the intensity of research.
applications. It is called the Niels Bohr's quadrant. E.g.: Quantum mechanics, quantum sciences, etc. We have still not figured out ways of applying it in the real world. There are people who chase the truth, like, how did the universe come to be or what is driving nature, through fundamental research. We have institutions in India who continue to do that. TIFR initially promoted that. We have the International Centre for Theoretical Science (ICTS) in Bangalore.
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There is a significant amount of research that's available from
startups in this quadrant are very high in research. Their applications can impact billions of people. The most recent example is the Moderna vaccine or the
these institutions but only some
BioNTech vaccine, which has come out of fundamental
of them find applications.
research on Messenger RNA. It did not come up in one year. They were working on this for the past 10 to 15
~ Lakshminarayanan
years. Deep Tech companies work on technology that addresses problems and are solutions-oriented. As IIT-
Then we have Quadrant 3 (Bottom Right) where the
Madras' Dean Prof Kamakoti mentioned, there are a
intensity of research is low but there is high intensity
plenty of technologies available with us. We are in a
of application. This is called the Edison's quadrant. He
situation of the hammer looking for a nail. We always
is the person who was known to have never invented
associate products in deep science and technology
anything but he applied whatever research and science
areas with big companies, as the investment required
that was available at that point in time, to make a
is high and it has to be sustained over a period of time.
significant impact to society, starting from the light
You need patient capital.
bulb to all the other things that he did.
Quadrant 2: The Holy Grail
Chinnu Senthilkumar, Managing Partner, Exfinity
The Holy Grail, of course, is Quadrant 2 (Top Right), which is called the Pasteur's quadrant, where both the intensity of research and application are high. It is called Pasteur's quadrant because Louis Pasteur did research at the high end and also applied it to almost save humanity. He is a great example for everyone who tries to be in the deep science and technology area.
D
eep Techs deal with physical products but I would like to add a small nuanced difference. The
product
must
be
able
to
create
disruption. I worked in Intel and dealt in transistor for the first 10 years. I was a hardware engineer and I
worked in chip design. In those days, I did not have much of an opinion about software people. I thought
With this one model, we can correlate all the
it was very simple. But after 15 to 20 years, my opinion
institutions that we have in India. In Bangalore, we have
changed drastically. The reason is, if you look at any
NCBS - The National Centre for Biological Sciences that does a lot of research and then finds many applications like the Pasteur's quadrant. Institutions like the IITs and IISC are probably somewhere in the Edison's quadrant, trying to move up. There is a significant amount of research that's available from these institutions but only some of them find applications. IIT Research Parks or The Society for Innovation and
product today, you should tie it to the software or platform ecosystem. That is what Steve Jobs did. In the Apple ecosystem, all the individual components come from various parts of the world or various engineers. Industrialised nations like Europe have been fantastic in individual innovations but when it comes to bringing those innovations together, the US excelled. With deep
Development are good examples of institutions that
tech, the more you can bring the product to the
take us to the Pasteur's quadrant. Companies or
platform, the more you can scale it.
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I grew up in a small village near Namakkal in
If you want to start a deep tech
company, look at the top 4 or 5
Tamilnadu. In the late seventies and eighties, the valve radios were getting replaced by transistors in a big way.
big companies in your space,
Then I worked in San Disk which had come up with
look at their roadmap and see
memory that completely disrupted the storage medium.
what is missing. Can you
Innovation should lead to disruption and production
address that gap?
on a scale.
~ Chinnu Senthilkumar
The Role of Ph.Ds Now, in deep tech, we are talking about AI, ML, AR and VR. Ten years down the road, it will be different. We have invested in deep tech companies. Six or seven of them are founded by PhDs. The product usually comes from a PhD thesis. It gets translated into an idea and it gets scaled. We have a company that has come up with a new battery and is founded by a young PhD who converted his PhD thesis. The point is that many deep tech companies are founded by PhDs but it doesn't mean that only PhDs can come up with it. We have companies founded by dropouts also. Chennai has a very good deep tech ecosystem. In my opinion,
must come from startups and big companies have understood that. Most of the big companies have started setting up corporate venture funds because they want to come and invest with deep tech entrepreneurs in Chennai, Bangalore or Hyderabad, because they know that it is the way to keep innovating. At one point, they want to acquire the company. Intel had Intel Capital. Many big companies have a venture arm for this reason. Find out your customer. Why would they buy your product? You have to reverse map it and go bottom up from your technology and also work top down.
what is probably lacking is the commercialisation part. No matter how much you do with the tech, you have to find a way to commercialise it. For example, this particular company that I talked about which was founded by two Stanford PhDs appointed a CEO with MBA with 20 years’ experience in the semiconductor industry and with techno commercial background. If you have to sell it to the customer, you have to understand the customer's pain point.
Rohan Ganapathy, CEO & CTO, Bellatrix Aerospace
A
ccording to me, deep tech is turning science fiction into reality, as I come from a space background. We attack problems differently.
In 2014, India launched the first satellite to Mars and proudly declared that it cost us less than the cost of making the Hollywood movie Gravity. The per kilometre
If you want to start a deep tech company, look at
cost of seven rupees was cheaper than an auto. We
the top 4 or 5 big companies in your space, look at their
disrupted this further and ISRO said that we can go to
roadmap and see what is missing. Can you address that
Mars at one paise per kilometre.
gap? If they were to acquire your company after five to
untapped potential but there is no market.
seven years, what are the metrics they will be looking at? Why would Intel or AMD or Infosys buy me?
There is huge
We talk about first mover advantage. I would call it 'first mover risk' because there's a lot of weight you
The big companies are not able to innovate at the
have to carry. Being the first space startup in the
speed at which startups operate. So the innovation
country, we had to face this. Now, I am happy to say
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Disruption for us is taking
Gold is available underneath the ocean. Why don't we
everything from every
mine it? Because, the cost of mining is more than the
department and putting
value of gold.
together and coming up with a
Similarly, now we are talking about climate change. It is real. We are still class zero in the human evolution.
solution. The potential is big.
That means, we are dependent on the natural resources
~ Rohan Ganapathy
for our survival. The next option is go to the moon and mine. The moon is rich. It's a barren land that is rich in titanium, iron, aluminum and even the future nuclear
that looking at us, there are 6 to 8 space focussed
fuel called helium 3, but what stops us from going and
companies in India. We are not that old. We set up in
getting it is the transportation cost. That is what we are
2015. The word software itself was coined for Neil
trying to solve. We have an engine which runs on water
Armstrong's Apollo moon landing. The lunar module
as the fuel. Water is available on the moon as well, so
couldn't be remotely controlled from the earth because
you don't carry a return fuel. You get everything in-situ
light takes a few milliseconds to reach the moon and
resource utilization. We saw the potential and we also
you can't do automated landing. So the first codes were
wanted to disrupt. This is a way to look at deep tech.
actually written for a space application. Space is an
In Indian perspective, the biggest problem is that
amalgamation of every subject. ISRO is not made of
people don't believe. We have to do the technical
aerospace engineers but of computer science engineers
feasibility study. We have to educate investors and gain
and mechanical engineers. Disruption for us is taking
their confidence to get money, as our gestation period
everything from every department and putting together
is longer and we need a little higher capital than any
and coming up with a solution. The potential is big.
other industry.
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How did you come up with the idea of electrics? In your journey of the past seven years, can you talk about the challenges that you faced?
ISRO was not really open to private industry coming up in an area where they are the king. The transi on took place in the early 2000 in the US. In India, it was s ll not the case. But we had a
Rohan: Thanks to Elon Musk, space went from being B to G to
solu on which ISRO wanted. That is how, ISRO ended up becoming
more of B to B. Today, space is 450 Bn $ industry and has poten al
our first customer.
to cross 1 Tn $, which itself is a pessimis c number. The world is such a small space today and thanks to space technology, we are all so closely connected. But it is s ll expensive to go to space. To put anything to space, it s ll costs somewhere around 40,000 $
The next problem was with investors. You might have a good technology and deep tech is not just about tech. It is also about regula ons. There is no space policy in India. You do anything in space and it is always a dual use. I launch a rocket and it goes to
per kg. A good satellite would weigh somewhere in the order of one ton.
So imagine the cost required to send a satellite to space. Elon
We wanted to solve this problem. Just like the EV
Musk answered this ques on by reusing the rocket. Our rocket is
revolution going on the road,
as complex as an airplane. An airplane can't fail because we are
we wanted to electrify space.
travelling. That level of reliability is also needed for a rocket, because we are pu ng a very expensive hardware to space. But
The electric propulsion doesn't
what we do, we end up throwing all the stages back into the
need so much of fuel. From
ocean. It is expendable in nature. Elon Musk opened up a
2000 Kgs, we only need 180 kgs
Pandora's Box by reusing.
of water to go from point A to
What else can be done? We came to know that the satellites carry
point B. That's the idea with
very li le payload. Even if they weigh 5 Ton, only 200 kg is the
which we started Bellatrix.
payload and the payload must give a return on investment. Why
~ Rohan Ganapathy
does it weigh 5 tons? Because, to go from low orbit to 36,000 kilometres, it needs fuel to go there. orbit. If I tweak the so ware, it can land in Pakistan. So, it falls into We wanted to solve this problem. Just like the EV revolu on going on the road, we wanted to electrify space. The electric propulsion doesn't need so much of fuel. From 2000 Kgs, we only need 180 kgs of water to go from point A to point B. That's the idea with which we started Bellatrix.
the dual use category and the government will invoke the Na onal Security class. This scares the investors to invest in space. We had to work with them and literally force the Department of Space to come up with space policy. ISRO had already nurtured industries to do something for space, but that was built to print. We had not
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reached the maturity of sending our own product to space. That is the shi which we wanted to do.
me, we had to tackle the problem differently and make the customers pay. So we made ISRO and DRDO to buy from us. That
Now you see the change happening. Our PM proudly announced that in the 450 Bn$ space market, India is a leader because ISRO is very well respected and they are very good. Shouldn't India have
sustained the team. Now we wanted to expand and we needed venture capital to go out of India. We are the first startup to get a space focused VC investment in the country. Now we have 50 plus people.
its own piece of the cake? The US is a very strange country. I don't know from a so ware perspec ve but for space, it is very different. If we want to do
You pivoted a couple of years back and had an association with Skyroot. Can you talk about that?
anything new, they will readily invite us but we can't get anything from US because there is ITAR, which doesn't allow you to import
Rohan: Skyroot and Chennai‐based Agnikul are launch vehicle
certain things. There is something called The Missile Technology
companies. Just like Elon Musk, they also want to build rockets.
Control Regime. India was not a signatory to that elite body. We
But rockets can put satellite into only one orbit. Space is very big.
had to push and there were other industries also pushing for it.
Point A to point B is a couple of thousands of kilometres. Many
In 2017, India became a signatory to MTCR, through which, you
of the satellites today, thanks to electronics and miniaturiza on,
can sell now dual use technologies to US and other friendly
are ge ng smaller and smaller but the rocket is s ll big. So for
countries. This opened up a very big door for people looking at
you to fly as a secondary passenger, you need to wait for three or
innova on that can happen at a lesser capital. You see a lot of
four years.
firms like Boeing and others coming in, looking in India to see what
What we said is that we have a good efficient engine. We are
solu ons in space they can offer. The next challenge was opening
building something called space taxi, just like we have Uber. If ten
up to investors and asking them to add aerospace into one of their
people want to go to 10 different orbits, now we book 10 different
deep tech por olios. For four years, we had turbulent mes. We
dedicated rockets to go to that space. We can take all ten on top
started fundraising in 2015 and completed it in 2019. During this 18
MAY 2022
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of our space taxi, drop them at their loca on and at the same me a er dropping them, we can also do space sweeping. Space debris is a major issue these days. We also go and clean the space and de‐orbit. Skyroot has this launch vehicle solu on. It is a good collabora on and we are building an ecosystem.
• In a mul ‐fold founder team, they should complement each other in knowledge and skills. • We also look for a mix of youth and experience, say 15 years in the industry. • Do they have some unusual characteris cs in them?
What do you look for in a deep tech if you want to invest?
• Do they have perseverance?
Lakshminarayanan: We look for people who have crazy ideas.
• Have they gone out of the way to do something in their life?
They ask: Why is it that such a thing is not happening? Just like
• When I hired scien sts some 10 to 15 years ago, I used to
Urbaser Sumeet, why can't I start a company to clear up the debris
hire guys who had come from polytechnic backgrounds.
in the space? That is the kind of thinking we are looking at it. We
There are many bright kids who might not have got
look at them even from the concept stage.
engineering, due to family reasons. Then they study
One of the companies that we deal with is working on developing
engineering and become successful. How do they work on
an alterna ve to lithium‐ion ba ery which has reached its maturity
obstacles in life?
point. They are experimen ng with molten sodium. Another
• What kind of compe
ve game do they play?
startup says they can produce 99.99% pure carbon anode material from straw. Straw is burnt in Punjab. A er the harvest season,
ba eries that have a much longer life.
Typically for a deep tech, even to get the prototype or the minimum viable product, it is going to take a lot of money and time. Do you release money based on some milestones or is there some other criteria which you adopt?
We are looking at such ventures. What we look in the deep science
Chinnu Senthilkumar: It depends on the founding team and
area is essen ally something that is going to create a great impact
their convincing of how they have thought through all the steps.
on billions of people. But it is not going to happen tomorrow or
Even if there is a failure, founders must know how to tackle it and
day a er. It will happen much further down.
to work around it. They are dynamic and have a very good
they can take that straw and make pure carbon which is required in so many other industries. In addi on, it can be used to make
Chinnu Senthilkumar: We invest typically in cket sizes between
understanding of the ecosystem. We bet a lot on the founders. They have to be innova ve on many angles.
2 million and 7 million. Ideally we prefer companies having some product, with or without some customer fit. The product can be
Lakshminarayanan: The founders, their quality, passion and
in the seed stage or lab stage of development or a mix of both.
desire to succeed are extremely important. Look at Metaverse. In
What do we look for in the founders?
the short span of me a er it has been announced, a number of new companies have come in that space, exploi ng AI and
• They must have interdisciplinary skills and financial knowledge. Good founders understand the technical, financial and commercial aspects. They must have some basic understanding of whether it makes commercial sense to launch a product. 20
MAY 2022
Blockchain. If you want to build some applica ons, there is some company that is providing the pla orm for that. If you want to play games in the metaverse, there are plenty of games that are available there. Once the fundamental technology is understood, applica ons come out really fast.
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