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VCs are turning their eyes to Deep Tech.

Haebom
Deep tech refers to sectors that drive profound technological innovation in areas like artificial intelligence, robotics, energy, biotech, and the defense industry. In fact, over the past five years, the US has seen a surge of funds and venture capitalists achieving remarkable returns in deep tech.
Sample Companies
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10x Genomics ($4.7b, gene sequencing tech)
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Archer Aviation ($1.7b, electric aircraft)
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Auris ($3.4b, surgical robots)
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Cylance ($1.4b, antivirus)
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Foundation Medicine ($5b, genomic profiling)
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IONQ ($2.3b, quantum computing)
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Luminar ($1.5b, LIDAR)
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Mazor Robotics ($1.6b, surgical robotics)
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Nextracker ($9b, solar panel positioning)
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Nuvia ($1.4b, chipmaker)
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Planet Labs ($2.8b IPO, satellite imagery)
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Quantumscape ($3b, lithium battery developer)
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SentinelOne ($5b, security platform)
This is largely because the deep tech sector is highly domain-specific and thus generates sizable profits. In the US alone, $150 billion (about 192 trillion won) is poured into defense R&D every year. This means that a new startup can achieve a valuation of over $1 billion with just a handful of contracts.
Actually, deep tech hasn't really been a popular choice among investors. The reason is simple: the upfront costs are high, and it often takes a long time to see any returns or results.
However, according to Leo Polovets from Susa Ventures, despite the common assumption that deep tech companies need far more capital and time compared to traditional startups, in reality, their capital intensity is quite similar. That's because there's less competition for new customers and contract sizes are larger. In fact, the deep tech and life science firms mentioned above tend to enter the market 10-25% faster than traditional companies. This is because deep tech firms are able to rapidly build valuable intellectual property (IP).
For instance, AI companies are achieving rapid progress in new drug discovery and semiconductor processes, while in traditional biotech or energy sectors, it's the new startups—not existing players—that are showing fast growth. We're starting to see more and more of these types of companies emerging in Korea as well. Oh, and for the record, I'm not talking about 'that semiconductor' company.
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