What barriers could deep tech startups face in the future?

Deep tech is now a ubiquitous buzzword for anyone working in the tech community. Whilst it has many definitions, and seemingly every startup is ‘powered by AI’, it undoubtedly describes technology that will be incredibly important to our future society and the South West’s tech community. 

Whether it’s Artificial Intelligence, Quantum Computing, Robotics, Immersive technologies, Biotech or future telecoms, Bristol & Bath already has a great story to tell. Historically, the area has thrived with industries like aerospace, electronics, natural history television and advanced engineering, meaning there’s a strong foundation of talent and expertise to build on.

The evidence bears this out, with investment into tech businesses doubling in the last five years and the area being recognised as one of Europe’s leading tech clusters. 

Companies like Graphcore, Open Bionics, Ziylo, Rovco, Ultraleap and dozens of others are blazing a trail in developing the technologies to reshape our future. If we can continue to grow, the area can be a truly global hub inventing the technologies that define how we work, live and play.

It won’t just happen, though. There are several challenges to building a thriving deep tech cluster in the South West.  

Deep tech talent

Phenomenal growth means a considerable demand for talent these businesses need. It’s old news that experienced Software Engineers are in high demand, but this is becoming particularly acute for languages enabling Data Engineering & Machine Learning. 

People with experience commercially deploying Computer Vision and NLP tech are hard to find, and on the drug discovery side, Computational Biologists are going to be essential. 

The diversity of the people working in the sector is also an enormous challenge. Whilst there are great role models out there like Sammy Payne and Zoe Thexton at Open Bionics, the makeup of the tech community doesn’t reflect the area as a whole. 

Over the last year, this has worsened with fewer women studying STEM subjects, and only 8.8% of the sector made up of people of colour despite being 28% of the population of Bristol. There isn’t even data to show the impact on people who are differently-abled or from lower socio-economic backgrounds, but I doubt it’s good news. 

Raising finance for deep tech startups

Alongside talent, there are still real struggles for businesses that need to raise investment to grow, as almost all deep tech businesses do. Despite a handful of specific deep tech investors posted across the country, the vast majority of businesses report that they struggle to raise investment, and most still need to travel to London or abroad to sign deals. 

There are already some great signs on the horizon for the future to help solve our challenges. Recently SETsquared announced that 45% of its founders identify as women and 23% are from a BAME background. New funds have arrived with Science Creates Ventures launching a dedicated deep tech fund locally and TechSPARK’s Investment Activator Programme connecting 120+ businesses with investors in 2020. 

There’s still more that needs to be done, however. We need focussed activity ensuring we have the most talented people, either by training them or attracting them from elsewhere. We need to shout about the incredible tech made here so businesses can sell and raise investment. Most of all, we need to seize the opportunity to build on what we already have a great global hub. 

There’s a brilliant quote from Matt Miller, partner at Sequoia, one of the world’s foremost investors, after they invested hundreds of millions in Graphcore. Next time I hope he doesn’t sound so pleasantly surprised…

“Lemme tell you, if you’d asked me a month prior if I’d ever [sit on] a board in Bristol, I’d have said ‘No way!’

“It’s not your typical destination on your tour of Europe. But to be honest, it’s been surprising for us in the Bay Area because the quality of talent in the UK, and particularly in Bristol… is very strong. The team they’ve been able to build there is on a par with the best in the world.”