Deep Tech

2023: How DeepTech technologies are developing in Russia

Interest in DeepTech solutions from large Russian industrial companies is growing amid the closure of some markets. In addition, in the current geopolitical situation, business seeks to switch to domestic technologies. This is stated in a study by RBC, the results of which were published in early October 2023.

DeepTech, or "deep technologies," are companies (more often startups) that promote products and services based on innovation or scientific achievements. They have great potential and also solve fundamental problems of society and economy.

Interest in DeepTech solutions from large Russian industrial companies is growing amid the closure of part of the markets

It is noted that one of the largest DeepTech projects with the participation of Russians was a technology developer augmented reality WayRay created by entrepreneur Vitaly Ponomarev: In 2018, the company raised $80 million from a group of investors led by. Porsche Another major project is a startup for the production of electric vans, Arrival founded by one of the creators of the brand Yota Denis Sverdlov: going NASDAQ public in 2021, the company raised $660 million and received a valuation of $13.6 billion.

In addition, several successful DeepTech startups have appeared in Russia, developing AI technologies for the healthcare sector. Thus, the Neiry team, which develops neurointerfaces for analyzing the bioelectric activity of the brain, in 2021 raised more than 500 million rubles from the National Technology Initiative Project Support Fund and external investors. At the same time, Semantic Hub project participants have created a service that uses natural language processing to identify patients with rare symptoms so that specialists who study the corresponding disease can find them. In 2017, this startup received 24 million rubles for development from the IIDF and other investors.

The Russian DeepTech market is developing in other areas. Among them - jurisprudence (startup Embedika), agricultural complex (company Evolink), etc. It is noted that domestic companies and accelerators are combining to jointly develop different industries.^[1]

2021:10 Most Promising Destinations in deeptech

Phystech Ventures on August 10, 2021 published an analytical review of Deeptech Outlook 2021. Investors noted a 4-fold increase in deeptech investment between 2016 and 2020. Over the past year, more than $60 billion has been invested in the industry.

The study highlighted the 10 most interesting technological areas of 2021: AI and machine learning, quantum technology, cybersecurity, genetics and bioinformatics, neuroscience, power, mobility, space technology, as well as food and agrotech.

A number of deeptech segments are on the verge of big changes. In 2021, we witnessed the first editing of the human genome, as a result of which the capitalization of biotechnological companies Intellia and CRISPR Therapeutics exceeded the mark of $10B., PsiQuantum IonQ and ArQit became the first quantum unicorns, and Starlink OneWeb Amazon plan to increase the number 20 times. We satellites Lands believe in as science the main driver of innovation, "says Pyotr Lukyanov, partner and founder of Phystech Ventures.

Analysis and assessment of investment activity was carried out in June-July 2021 and covered the development of deeptech over the past 10 years. As part of the study, the team relied on industrial reports and databases (Pitchbook, CB Insights, Scopus, Google Patents), as well as insider opinions and internal analytics.

Arrival, a startup with Russian roots that develops and manufactures electric vehicles, was included in the rating of the most notable market players.

Venture and corporate investments artificial intelligence machine learning in and reached $73 billion in 2020. And the first quarter of 2021 became a record in terms of the number of investments - $20.1 billion was invested in three months Phystech Ventures. It focuses on the growing need for speed and energy efficiency of computing and highlights the direction of neuromorphic chips. They provide 20 times more processing power than the most modern graphics. processors In addition, venture investors pay attention to startups that are associated with knowledge schedules, reinforcement training, ASIC, MLOps,, and GAN autoML.

In 2021, the first quantum unicorns appeared - PsiQuantum, IonQ and ArQit. Experts expect an increase in physical implementations of quantum processors, new types of qubits and the development of high-level software. The quantum computing market will reach $7.3 billion by 2025, and tech giants like Google, IBM and Alibaba are already pouring billions of dollars into quantum technology.

In the field cyber security , Phystech Ventures highlighted projects related to cyber resistance, post-quantum cryptography and privacy. data As of 2021, more than 35.8 billion devices are connected in the world, and this is about 35.8 billion potential points for. cyber attacks

Biotechnology is of particular interest - the segment received an additional impetus for development in 2020 during the pandemic. The first decacorns (startups with a capitalization of $10 billion) in the field of gene editing have appeared in the last 12 months: Intellia and CRISPR Therapeutics. In June 2021, Intellia announced the first editing of the human genome. Moderna has created a technology platform to build mRNA-based vaccines and gene therapies, sending the company's valuation soaring from $7 billion in 2019 to $142 billion at the end of July. Illumina, which specializes in genome sequencing, is estimated at $72 billion for August 2021. It is also important that the cost of decoding the human genome over the past 6 years has decreased by 10 times. Experts note great prospects in neurosciences.

Foodtech and agrotech are also of interest for venture capital investments. Projects related to biomaterials, alternative sources of protein and food 'from a test tube' are prioritized. Startups are developing especially quickly in the niche of innovative food products. 75% of all investments in alternative protein sources have been attracted over the past 2 years.

Against the background of unprecedented attention to clean technologies, investments in natural gas demonstrate the highest growth in 2021 among both fossil fuels and renewable energy sources (+ 24.5%). Alternative power is also in the spotlight of investors, especially hydrogen. A few examples: Plug Power, which develops hydrogen fuel cell systems, has become 10 times more expensive, and Bloom Energy is 5 times more expensive; hydrogen aircraft startup ZeroAvia, which the Phystech Ventures fund invested in early, completed several rounds with prominent investors including British Airways, Shell, Bill Gates and others.

The drone market reached $50 billion in 2020. Startups raised nearly $4 billion in the first half of 2021. In this sector, among the promising areas are unmanned aerial vehicles, systems with autonomous control, systems with several robots and infrastructure development projects. Investors highlighted Cruise, Joby Aviation and Plus as the top 3 success stories in this segment in 2021.

In space technology, investors emphasize the directions associated with spacecraft propulsion systems and technologies for putting them out of orbit. In August 2021, about 60% of all launch failures are due to problems in engine systems. Despite the problems, the number of satellite launches is growing exponentially with a combined CAGR of 34%. Starlink has already deployed 1.6 thousand satellites and plans another 12 thousand. OneWeb is going to add 48 thousand low-orbit satellites, Amazon plans to bring about 3 thousand satellites for its network. satellite Internet

The increase in interest in technological solutions in 10 segments is evidenced, among other things, by the increase in the number of published scientific publications. As of August 2021, about 50 thousand scientific articles in Europe and about 35 thousand in the United States have been published in the allocated niches. Both regions account for 59% of all scientific publications, European publications are cited most actively.

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