Why France is betting on deep tech instead of the metaverse
It feels like the opposite of Mark Zuckerberg’s metaverse. Instead of cute avatars in a virtual world of fun and discovery, deep tech gives off the impression of being more serious, complex and elusive for the average Facebook user. At VivaTech, the conference for technological innovation and startups taking place in Paris until June 18, the metaverse is on everybody’s lips. But a stroll through the aisles reveals startups with more obscure names like Genoskin, Natif and Preligens – all from the world of deep tech.
"This year, you can even filter this type of startup on the VivaTech website. This was unthinkable just a few years ago!" exclaims Alizée Blanchin, Director of Strategy for Hello Tomorrow, a global network of deep tech startups.
Indeed, the lack of visibility of this branch of technology is due in part to the vagueness surrounding the term. Deep tech, or deep technology, refers to innovations resulting from scientific research that find their way into commercialised products or services.
The effect of the pandemic on deep tech
Yet the Covid-19 pandemic has shown that this technology is not abstract or difficult to understand. "That vaccines could be put on the market in one year, when before it would have taken almost a decade, is due to deep tech," says Blanchin. Moderna and BioNTech were able to use research into artificial intelligence applied to medicine to speed up the development of molecules needed to combat SARS-CoV-2.
In this context, it is not surprising that many deep tech startups are focusing on the health sector. At VivaTech, they swarm the stands of France’s National Centre of Scientific Research (CNRS) and National Institute for Research in Digital Science and Technology (Inria), joined by major pharmaceutical companies such as Sanofi, who attended with a group of startups sponsored by the co-operation.
With no American deep tech giant, France may have an advantage
Even before the pandemic, France had already bet on deep tech. In 2019, President Emmanuel Macron announced a vast €2.5 billion plan over five years to help 500 French deep tech startups launch every year from 2025 onwards.
The government believes that France possesses two advantages that could enable their success in this field: research and a profound industrial network. "France has cutting-edge research and a strong industrial tradition which means that, despite outsourcing, there is still a real sense of savoir-faire,” says Blanchin. Unlike smartphone applications, the innovations of deep tech often require products to be manufactured in factories – for instance, building materials with better insulation.
Another advantage for France is that, unlike the Big Tech giants dominating the information technology industry worldwide, a US deep tech giant has yet to emerge – leaving room for French startups to get ahead.
The country’s ambition is starting to pay off. In 2021, deep tech startups increased by 30% in comparison with 2020. In January 2022, Exotec, a manufacturer of warehouse robots, became the first deep tech startup to join France’s exclusive club of 25 “unicorns”: tech companies valued at over one billion euros. The government’s goal is to see 10 deep tech unicorns emerge by 2025.
Aside from health, the agri-food industry is also attracting the attention of deep tech. "The move towards alternative protein products has inspired many scientific entrepreneurs," explains Blanchin. “They are working on replacements to red meat in our diets, whether it be seaweed, insects or lab-grown steaks."
"The conflict in Ukraine has also shown the geopolitical interest of innovating in the energy sector in order to put an end to our energy dependence,” the startup expert adds.
Scientists could still use help in pitching
However, deep tech still remains less attractive among investors when compared with fintech (innovation in finance), the metaverse and new smartphone applications. “The sector accounts for only 10% of tech investments in France,” says Blanchin.
Why the reluctance? ”For European investors, deep tech is often a gamble. These innovations require significant investment from the outset for results that take a long time to materialise. Also, deep tech often seeks to create real disruptions, which can be riskier than an application that, for example, improves a certain aspect of the online customer experience,” the expert explains.
Also, many scientists have yet to master the skill of pitching their ideas to investors. “Integrating into business culture is difficult for them, and more training is needed to help researchers with this,” Blanchin says. She has also developed a consultancy business to better connect researchers with the business world.
The craze around Zuckerberg’s metaverse does not help matters, and Blanchin acknowledges that “this undeniably splits up the available funding”. Yet contrary to many deep tech startups, these virtual words do not seek to solve the major problems impacting our society today.