A Decade Of Deep Tech Just The Beginning For Emerging Innovators

Callaghan Innovation’s Deep Tech Incubator Programme has supported nearly half of the innovative deep tech startups founded in Aotearoa over the past 10 years.

The term Deep Tech refers to advanced technologies that are based on significant scientific or engineering innovation. Deep Tech startups are often seeking solutions to complex global challenges, including climate change, food security and disease.

Between 2014 (when it was established) and 2023, the Deep Tech Incubator Programme supported 80 out of 162 new deep tech deals, according to data collected from New Zealand Growth Capital Partners, and Young Company Finance.

“This country is home to world-class engineering, scientific expertise and entrepreneurial talent. We are delighted to celebrate the success of the Kiwi deep tech innovators who have participated in our Programme over the last ten years,” says Deep Tech Incubator Programme Manager, Celeste Peh.

Deep Tech requires extensive research and development and significant investment to be successful. This can make the innovation journey much longer, and more challenging.

“Because deep-tech startups push the boundaries of science and engineering, they can often seem too risky for private investors – particularly in the earliest stages,” says Celeste Peh.

Successful applicants get a minimum of $1 million in funding — $750,000 of which is a repayable grant — to help startups support their growth in this critical early stage.

They join one of five Programme incubators that specialise in supporting the success of deep tech start-ups in diverse sectors from agritech to biotech.

Plant & Food Research spin-out Scentian Bio joined the Programme to develop biosensors designed to detect a wide range of chemical compounds with high sensitivity and specificity. The technology has potential applications in agriculture, healthcare, environmental monitoring, and food safety.

“We have the aim of building a multibillion-dollar business, based here in New Zealand, that changes lives all around the world, " says CEO Jonathan Good.

“Deep tech is hard, and the Deep Tech Incubator Programme repayable grant made a big difference by enabling us to prove a couple of key technology proof points supporting us to then raise subsequent capital,” he says.

Celeste Peh says it’s rewarding to look back to see that 80 per cent of startups raised follow-on investment post-incubation, and that cumulative private investment was 8.6 times the level of public repayable grant funding over the last decade.

Bridgewest Ventures is one of five Programme partners specialising in supporting the growth of deep tech startups from wide-ranging sectors.

“Bridgewest identified New Zealand as a good emerging market to diversify into because of its top-tier universities and ease of doing business.

“I really think that the Deep Tech Incubator Programme has opened up New Zealand to the Bridgewest global ecosystem,” says Kathryn de Ridder, Bridgewest Ventures Portfolio Investment Manager.

“We were encouraged to see that 39 per cent of participating startups were women-led or women co-led, which is nearly double the national average of 21 per cent,” says Celeste Peh.

“What’s perhaps most exciting is not knowing what new ventures and big ideas will emerge from the programme in the coming years. The science and technology being developed is so advanced that we can’t even consider its full impact. What’s certain is that with the right investment and support, Kiwi deep tech innovators can play a vital role in the future of the country, and the world.

“We’re looking forward to supporting more early-stage deep tech startups to thrive so they can play their part in tackling global problems, while creating high-wage, high value jobs and valuable export earnings,” says Celeste Peh.

Read the report.

Notes

Key highlights:

1. The Deep Tech Incubator Programme has contributed to 49% of total new deep tech deals (80 out of 162 deals) between 2014 - 2023.*
2. Cumulative private investment commitment and follow-on investment is about 8.6 times amount of public repayable grant funding. ($381M private vs $44m public).
3. 38% Women-led / co-led startups (MBIE data found 21% of kiwi startups have at least one female in their founding team).
4. 80% of startups raised follow-on investment post-incubation
5. The Deep Tech Incubator Programme supported 39 public research organisation spinouts.

*Number of deals from Young Company Finance, NZGCP, Deep Tech Incubator Programme

About Callaghan Innovation

Callaghan Innovation is New Zealand’s innovation agency. It activates innovation and helps businesses grow faster for a better New Zealand.

The government agency partners with ambitious businesses of all sizes, delivering a range of innovation and research and development (R&D) services to suit each stage of their growth. Its staff – including more than 150 of New Zealand’s leading scientists and engineers – empower innovators by connecting people, opportunities and networks, and providing tailored technical solutions, skills and capability development programmes, and grants co-funding.

Callaghan Innovation also enhances the operation of New Zealand’s innovation ecosystem, working closely with MBIE, NZTE, NZVIF, Crown Research Institutes, and other organisations that help increase business investment in R&D and innovation. The agency operates from five urban offices and a regional partner network in a further 12 locations across Aotearoa.

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