BRITER BRIDGES
Who is investing in deep-tech?
Deep-tech poses a higher risk to investors in comparison to other sectors for a variety of reasons including: 1. The intangibility of assets which makes them difficult to value especially in the early stages. 2. Reliance on emerging and cutting-edge technology which may become obsolete very quickly. 3. Limited understanding of technical feasibility by investors. 4. The significant amount of capital required to get off the ground and thus a higher risk of failure. As earlier noted, the majority of the investors investing in deep-tech do not claim to have a deep-tech focus in their mandate, but rather, see deep-tech as more cross-cutting across the verticals they work in. Therefore, deep-tech is not seen as a vertical but is rather used to gauge the maturity of the solution or startup. This can be seen as one of the challenges deep-tech startups face, especially in the early stages. Excluding some few success stories; most deep-tech startups and innovations, especially in the early stages of ideation and business model development operate with limited revenue and funding. While many Venture Capital firms (VCs), Private Equity firms (PEs), Corporates and DFIs continue to invest in the continent, there is a need for more deep-tech-focused investment. Deep-tech innovators often require support for a number of reasons, such as long lead times to commercialisation, and like other sectors, the industry has benefited from the existence of a dedicated support ecosystem that works to enable growth, development, and acceleration of innovation. The support is offered in various ways including mentorship, funding, training, networks, partnerships, community, and technical assistance. The deep- tech support ecosystem is mostly made up of private sector players including dedicated hubs, investors, challenges, and hackathons. Support Ecosystem Hubs provide a wealth of resources and opportunities that may be critical to the success of startups, especially in the very early stages. They offer mentorship, access to capital and networking opportunities with potential customers and investors and provide a community of like-minded entrepreneurs who can offer advice and support to companies Tech Hubs
EVALUATING THE AFRICAN DEEP-TECH STARTUP ECOSYSTEM
13
Made with FlippingBook - Online Brochure Maker