Vietnamese Deep-Tech startups will make big leaps?

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What is Deep-Tech ?

The term “Deep Tech” was coined by Swati Chaturvedi, the founder of the digital investment platform PropelX. Beyond the familiar definition of “tech” which now designates web platforms and mobile apps, it refers to startup companies based on substantive scientific or technological innovation. Deep-Tech technologies address big societal and environmental challenges and will likely shape the way we solve some of the most pressing global problems.

“If consumer tech startups are run by nerds, then Deep-tech startups are run by nerds on steroids.”

Justin Hall, Golden Gate Ventures.

Deep-Tech startups have the following characteristics –

  • Impact: The deep-tech innovations are very radical and disrupt an existing market or develop a new one. The innovations based on deep tech often change lives, economies, and societies.

  • Time & Scale: The time required for deep technology to develop the technology and reach the market-ready maturity is way more than shallow technology development (like mobile apps and websites). It took decades for artificial intelligence to develop and it is still not perfect.

  • Capital: Deep tech often requires a lot of early-stage funding for research and development, prototyping, validating hypothesis, and technology development. [1]

Advanced materials, Artificial intelligence, Biotechnology, Blockchain, Drones and robotics, Photonics and electronics, Quantum computing are some so-call technologies are listed in the deeptech category. By far, Artificial Intelligence (AI) is the most apparent Deep Tech that has been successfully commercialized.

Problem orientation and high impact

Deep tech ventures innovate in areas of pivotal importance such as life sciences, agriculture and clean energy generation. To succeed in deep tech entrepreneurship, companies must focus on the core principle – problem-solving. 97% of deep tech ventures today contribute to UN Sustainable Development Goals. This means that while they are geared towards economic growth, they are also tackling pressing global concerns. [2] 

Today, deep tech has a profound impact on almost all the important segments of the economy like the automotive industry, robotics, smart homes, smart cities, healthcare, fintech, agritech, edtech, energy efficiency.

Investment in Deep-Tech is growing globally

The Artificial Intelligence & Machine Learning share has increased by 277% from 2012 to 2021, and grown from 7.8% to 29.5% in terms of total capital invested. This growth is partly because more startups are including AI technology in their technology stack, and investors are also giving more attention to this sub-sector.

 

Source: Startup Genome

According to the US fund Draper Cygnus, venture capital investment in deep tech has risen from 10% to 25% in the last 10 years and current valuations of these startups worldwide now total $468 billion, or €424 billion. [3]

 

Where is Vietnam at?

Currently, many Vietnamese enterprises have started to apply Deep Tech as a new mainstream solution to increase competitive advantage. Deep tech and AI startups have continued to gain prominence as the AI wave swept the country. On Shark Tank, more startups whose core products are powered by AI or are AI themselves are featured. Of particular interest are Ohana, an apartment finding app, Umbala, an online wholesale retailer of consumer electronics, and EyeQ Tech, a solution provider specializing in computer vision technologies. Beyond the show, applied-AI startups such as ELSA Speak, an NLP-powered English-learning app, and Trusting Social, an alternative credit scoring startup, have attracted positive attention from mainstream media.

 

Regarding future investment trends, experts in Vietnam have the same opinion that Deep Tech technology segments such as AI (Artificial Intelligence), VR/AR (Virtual Reality/Augmented Reality), IoT (Artificial Intelligence), VR/AR (Virtual Reality/Augmented Reality), IoT ( Internet of Things)… will be key for startups next year.

The collaborations from key stakeholders in ecosystems as universities, the public sector, business angels, venture capitalists and corporates have crucial roles for a well-functioning deep tech innovation ecosystem in Vietnam.

Recently, we see a shifting role for governments – Vietnam Government has emphasized Science, Technology, and Innovation as a Pillar for Socio-Economic Development in Vietnam and pushed forward to adjust the national legal framework to boost wide applications of latest technologies.

 

The potential of Deep-Tech in Vietnam

The Vietnamese government has been a strong supporter of the deep-tech industry, which is reflected in the many initiatives launched in recent years. These include the Vietnam Silicon Valley project, which aims to create a high-tech hub in Ho Chi Minh City, and the Vietnam Tech Park initiative designed to promote innovation and entrepreneurship. [4]

There is also a large population of young people in Vietnam, which is another reason for the tech industry’s growth. Young people are more comfortable with technology than older generations, and they are eager to adopt new innovations. In addition, many young people have received training in information technology  and are now working in the tech industry.

Finally, the Vietnam tech industry is growing due to a greater awareness of the importance of technology. More and more people realize that technology can help them improve their lives and achieve their goals. This has led to increased demand for high-tech products and services, and businesses are responding by launching new startups and expanding their operations. [4]

Conclusion

Expert Tuan Nguyen, deputy director of SGInnovate highly appreciated the Vietnamese market in the application of Deep Tech. “We have witnessed the tremendous growth of the Deep Tech ecosystem in Vietnam, especially in areas like AI and Blockchain over the past few years. Deep Tech businesses in Vietnam are also ambitious. Hope to be given opportunities by investors, the bigger the better,” said Mr. Tuan.

The Vietnam tech industry is booming, and there are plenty of reasons to be optimistic about its future. Governments, corporates, and of course venture capital across the world have recognised the potential of deep tech and are coming together to collaborate and not just foster but catalyze deep tech innovation. 

Moreover, startups in Vietnam are catching up with new technology trends quite quickly. In Southeast Asia, the priority of investment funds will be potential emerging markets with large populations such as Indonesia, Vietnam and Thailand. In addition, foreign companies are starting to take notice of the potential for growth in this market and are investing in Vietnamese startups. This is sure to help the industry continue to grow in the years to come.

Therefore, many other research studies prove that deep tech is something that’s here to stay and disrupt for another century.

Reference

[1] Pahwa, A. (2022). What Is Deep Tech? – Use Cases, Examples, & Future. Feedough. Retrieved 28 September 2022, from https://www.feedough.com/what-is-deep-tech/.

[2] Deep Tech and the Great Wave of Innovation. BCG Global. (2022). Retrieved 28 September 2022, from https://www.bcg.com/publications/2021/deep-tech-innovation.

[3] Sanjuan, S. (2022). Venture capital funds increase their investments in deep tech startups by 15%. Startup Valencia. Retrieved 28 September 2022, from 

[4] Vietnam Tech Industry Is boosting High-tech. Saigon Technology – Vietnam Tech Industry Is boosting High-tech. (2022). Retrieved 28 September 2022, from https://saigontechnology.com/blog/vietnam-tech-industry-is-boosting-high-tech.

 Sanjuan, S. (2022). Venture capital funds increase their investments in deep tech startups by 15%. Startup Valencia. Retrieved 28 September 2022, from https://startupvalencia.org/blog/investments-deep-tech-startups/.

Xu hướng đầu tư cho các startup công nghệ Việt – Văn phòng dịch vụ cho thuê tại Việt Nam. Văn phòng dịch vụ cho thuê tại Việt Nam. (2022). Retrieved 28 September 2022, from https://vanphongdichvu.vn/xu-huong-dau-tu-cho-cac-startup-cong-nghe-viet/.

Stamm, E. (2022). Invest in deep tech startups – Verve Ventures loves deep tech startups. verve.vc. Retrieved 28 September 2022, from https://www.verve.vc/blog/verve-ventures-loves-deep-tech-startups/.

Deep Tech có thể mang lại thành công lớn nhưng chưa phải là tất cả. Thefacevietnam.vn. (2022). Retrieved 28 September 2022, from https://thefacevietnam.vn/deep-tech-co-the-mang-lai-thanh-cong-lon-nhung-chua-phai-la-tat-ca.

DEEP TECH ECOSYSTEM IN VIETNAM: THE SHIFT HAS JUST BEGUN! – YellowBlocks. Yellowblocks.org. (2022). Retrieved 28 September 2022, from https://yellowblocks.org/deep-tech-ecosystem-in-vietnam-the-shift-has-just-begun/.

What Is Deep Tech And Why Is It Important. Jumpstart Magazine. (2022). Retrieved 28 September 2022, from https://www.jumpstartmag.com/what-is-deep-tech-and-why-is-it-important/.

 

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