Family Offices Harnessing the Power of Deep Tech Investments

Deep technologies have the potential to deliver dramatic improvements over advancements currently in use. With that said, large investments and a considerable amount of effort will be necessary to bring these technologies from the lab to the market. In an effort to shine a light on family offices harnessing deep tech opportunities, we have provided a breakdown of data demonstrating this growing trend. Unless otherwise cited, all data within this narrative was derived using the FINTRX Family Office Data and Research Platform.

Defining Deep Tech

Deep tech is a relatively new term, coined in 2014 by Swati Chaturvedi, used to describe a set of disruptive technologies based on scientific discoveries, engineering, mathematics, physics and medicine. However, companies applying existing technologies (such as Uber, for instance) differ from those in the deep tech space which are making veritable advancements in science that have a significant impact on businesses and corporations. To distinguish one phenomenon from the other, the term 'deep tech' was created. Deep technologies present unique opportunities for investors to catalyze change and lay the foundation for further novelties, and family offices are eager to jump on board.

Deep Tech Sectors & Key Terms:

Why would deep tech investments be fruitful for family offices?

Family office investors are frequently characterized as being opportunistic, flexible and patient over the long term. These traits make them ideal candidates for deep tech companies seeking capital. It's important to note, investments into deep tech companies are differentiated from investments into the greater tech industry, as they often require the investor to stake their capital knowing they may not see immediate returns due to the significant amount of scientific research and development required for such companies to come to fruition. Sacrificing short-term alpha, which is a characteristic strategy of family office investors to begin with, is highly rewarding for the deep tech investor, as long-term yields from deep tech investments have not only proved to be highly profitable, but extremely beneficial to societal growth as well.

Today’s innovators have a wealth of technological capability at their fingertips. Over the last few decades, novel advances have been driven by the use of progressive platform technologies (desktop computers, world wide web, mobile technologies, etc.) that ultimately led to a variety of applications in industries across the board. Companies that began as digital businesses are increasingly reshaping their strategies toward deep tech as well. Investors and companies are now looking for the next source of deep tech advances capable of fueling the next industrial revolution.

One of the most notable rising trends, however, is the role of deep tech startups and its increasingly important collaborations with family office investors. Through the FINTRX family office data and research platform, we frequently see allocations into deep tech companies. For example, ICON Technologies, a Texas-based deep tech startup founded in 2017, received both Seed and Series A funding from both single family office, Cercano Management, and multi-family office, Caz Investments between 2018 and 2020. ICON develops advanced technologies that advance humanity through the use of 3D printing robotics, software and advanced materials.

Family Offices Investing in Deep Tech