The deep tech sector has gained significant attention over the past decade, driving breakthroughs in artificial intelligence (AI), quantum computing, biotech, and advanced materials. Deep tech claims a stable 20% share of venture capital funding, up from about 10% a decade ago. And while investment levels have varied in the last few years reflective of the broader investment environment, the size of the average deep tech investment has significantly increased, with many now reaching $100 million or more. Notably, global private investment in generative AI skyrocketed from $3 billion in 2022 to $25 billion in 2023.
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Governments have poured resources into fostering innovation ecosystems, universities have amplified their tech transfer programs, and specialized venture capital funds have risen to support early-stage commercialization efforts. The Singapore government is actively promoting deep tech through initiatives like its S$440 million funding aimed at driving growth in innovative startups. The University of Florida’s tech transfer program – UF Innovate – has generated over $10.4 billion in private investments and launched more than 300 startups.
Across the board, deep tech hubs such as Europe, North America and Asia Pacific are seeing robust activity. In Europe alone, startups in cities like London and Stockholm have raised significant funding, and investments in AI, quantum computing, and advanced materials continue to grow.
Historically considered high-risk, deep tech investments are now moving into the domain of mainstream investment and are increasingly seen as a critical area for investment.
Despite this growth, the journey from lab to market remains fraught with challenges.
The more complex global environment now, the rising demand for deep tech, the shorter time between each new wave of technology development, and the increasing mainstreaming of deep tech investment all converge to make it even more urgent for a new playbook for deep tech commercialization to emerge – one that balances technological brilliance with business acumen, risk management, and a deeper understanding of the shifting global dynamics.
Deep Tech commercialization in a shifting global and investment climate
While deep tech ventures face a wide range of challenges from long R&E cycles to complex regulatory environments, perhaps one of the biggest challenges is the changing global investment climate. As AI and other deep technologies play increasingly pivotal roles in economic and geopolitical competition, governments are imposing stricter regulations on technology transfers and cross-border investments.
For example, the US-China tech rivalry has led to sanctions and export controls on critical technologies, such as advanced semiconductors and AI-related tools, frameworks, and hardware. This makes it harder for startups to scale globally without navigating complex compliance requirements.
In Southeast Asia, Singapore has become a key hub for advanced innovation, supported by strong government backing and a growing deep tech ecosystem. Positioned at the crossroads of major economies, Singapore acts as a neutral ground for collaboration, even amid geopolitical tensions. Its ties with all global players provide access to diverse markets and critical technology resources.
For deep tech founders and investors, navigating this landscape means balancing global ambitions with local constraints like regulations and market access. Success depends on building flexible, resilient models that combine cutting-edge innovation with a clear understanding of trade, regulation, and intellectual property.
In this environment, venture-building strategies must prioritize geopolitics and supply chain resilience. Deep tech founders and investors cannot ignore the complexities of building businesses that are globally relevant but locally constrained by regulation and market access. To thrive, they need to create models that are adaptable, balancing the need for cutting-edge innovation with a practical understanding of global trade, regulatory landscapes, and intellectual property protections.
Why business excellence is underrated compared to technology excellence
A common misconception in deep tech is that technological brilliance almost guarantees success. In reality, many startups fail because they prioritize technological innovation over essential business fundamentals like clear go-to-market strategies, customer validation, and operational strength. General Magic in the 1990s was a pioneer in creating smartphone-like devices. Its product, the Magic Link, featured a touchscreen, email, and apps way ahead of its time. Yet, despite its cutting-edge technology, General Magic failed. It misjudged consumer readiness, produced an expensive and difficult-to-use product, and struggled to educate the market. By 2002, it had shut down, demonstrating that even groundbreaking tech can fall flat without a solid business strategy.
Today, deep tech startups face even greater challenges. Unlike software startups, which can quickly adapt based on user feedback, deep tech ventures often involve long development cycles, complex regulatory requirements, and high-stakes decisions early on. Founders must excel not just in innovation but also in securing funding, managing stakeholders, and navigating enterprise or government sales – tasks that require strategic thinking and risk management.
This is where experienced venture builders play a critical role. They help startups go beyond a narrow focus on technology, guiding them toward a balanced approach that integrates innovation with strong operations, clear financial planning, and effective market strategies. In deep tech, business excellence isn’t just important – it’s essential for turning great ideas into sustainable success.
What is the new deep tech playbook to separate the winners from the losers
The success of deep tech startups will depend heavily on their ability to master a combination of critical differentiators while embracing emerging trends such as sustainable technology and advancements in quantum computing.
- Multidisciplinary teams and early market alignment
Deep tech ventures require expertise from diverse fields: scientists, engineers, business leaders, and regulatory specialists. The complexity of the challenges they address demands collaboration across disciplines. Successful startups prioritize assembling balanced teams that integrate technical excellence with business savvy.
Universities are increasingly stepping up to support this integration early in the research process. For example, Zimin Institutes – partnering with Arizona State University, Technion, and Tel Aviv University – provide guidance and resources that, among other things, can be used to connect future founders with end-users, external organizations, and strategic partners. This approach ensures innovations are aligned with real-world market needs.
- Embedding regulatory strategy early
Many deep tech industries, from biotech to autonomous vehicles, are tightly regulated. Companies that proactively keep that in mind and build compliance into their operations from the start gain a decisive advantage. Understanding policy nuances and fostering an open communication channel with regulatory bodies isn’t just a safeguard – it’s a competitive edge in navigating complex markets.
- Balancing vision with milestones
Deep tech success requires a long-term vision, but progress must be demonstrated through clear, short-term milestones. Founders need to show tangible results—such as securing key partnerships or achieving proof-of-concept breakthroughs—to maintain momentum and build investor confidence. It’s not enough to sell the dream; startups must prove they can turn vision into reality, one step at a time. Showing investors the “rope ladder” to unlocking the next rounds of funding is also important.
- Building ecosystems for scale
In deep tech, collaboration isn’t optional – it’s essential. Startups that prioritize partnerships with academia and industry players gain access to resources, expertise, and networks that accelerate innovation and scale. Building ecosystems that combine talent, technology, and market insights ensures that no venture operates in isolation, strengthening the entire deep tech landscape.
These strategies form the cornerstone of a new deep tech playbook, offering a pathway to navigate the complexities of today’s global landscape.
For deep tech founders, investors, and ecosystem enablers—especially in dynamic regions like Southeast Asia—the call to action is clear: success hinges on adopting a playbook that integrates innovation with execution. This means:
- Founders must prioritize building cross-disciplinary teams, embedding regulatory and market strategies from the outset, and delivering measurable milestones to maintain investor confidence and momentum. Aligning early with customer needs and market realities is non-negotiable.
- Investors should look beyond technological brilliance, seeking teams with operational excellence and clear capital stack strategies. Actively supporting startups in navigating complex ecosystems and regulatory landscapes will drive better returns.
- Ecosystem players, including universities, governments, and corporations, must focus on fostering collaborative frameworks that connect talent, funding, and industry expertise. By creating scalable, inclusive ecosystems, they can accelerate the commercialization of transformative technologies.
The road ahead for deep tech is not without challenges, but the opportunity is immense. By aligning visionary ambition with practical strategies, the next generation of deep tech ventures can move from the lab to market with confidence, creating innovations that redefine industries and transform lives.
The article titled “On the crest of the AI wave, deep tech venture-building needs a new playbook” was authored by Dr Mark Shmulevich, Managing Partner at Aloniq
About the author
Mark Shmulevich is a globally recognised technology innovation leader with over 15 years of experience at the intersection of research, business scaling, investment, and ecosystem development. His experience spans frontier fields such as AI, cybersecurity, quantum computing, and space
technologies. Mark has made over 40 investments in tech startups, authored 30 technological patents, and possesses deep experience in research commercialization.
The strong track record reflects Mark’s rare blend of business acumen, technological insight, and policy expertise in the deep-tech environment across Asia, North America, LATAM, and the Middle East.
As the Founding Head of Aloniq, Mark has shaped a formidable portfolio of early-stage deep-tech
startups such as Verne, Xona Space Systems, Cynomi, and BioOrbit. In just three years, Aloniq has
already had two exits in hydrogen energy and cybersecurity.