It was a huge week for deep tech with Google and IBM fighting over supremacy in one of the last frontiers of technological advancement – quantum computing.
A breakthrough in this area of science will have profound implications for drug discovery, engineering, machine learning, signal processing, database searching and cryptography.
Google claimed it could perform in minutes a calculation that would take a supercomputer 10,000 years to finish. IBM responded by saying a supercomputer could do the Google calculation in 2.5 days, implying the crowning of supremacy in quantum physics was a long way off.
Flying under the radar of this global stoush between Google and IBM are a number of Australian quantum computing companies backed by various universities and some brave, long-term investors.
One of these local companies, Quantum Brilliance, won the Innovation Excellence Award at the annual Tech23 conference in Sydney on Wednesday.
For the past decade, Tech23 has brought together entrepreneurs, venture capitalists, scientists and government agencies to focus on the latest emerging companies in deep tech. About 200 people attended the conference this year, including some Tech23 Alumni who went on to make their fortunes.
The 23 entrepreneurs invited to attend the conference are each given five minutes to make a pitch that could change the course of their lives. It could be the difference between obtaining the funding to complete the long and winding pathway to profitability or going bust.
Quantum Brilliance chief executive Andrew Horsley, who is based at the Australian National University in Canberra, was impressive as he explained in simple terms why quantum computing utilising flaws in diamonds was superior to the expensive and complex systems being used by Google and IBM.
Horsley says diamond quantum computing costs less than other methods, can be undertaken at room temperature and is more flexible because of the portability of the equipment. Horsley says all you need is a power point.
‘Winner takes all’
After his presentation, Horsley was seen deep in conversation with several different venture capitalists who specialise in deep tech. This is the crucible of Tech23. An entrepreneur talking numbers with the men and women involved in commercialising great ideas.
The many conversations at Tech23 about investing in deep tech are in sharp contrast to the global obsession with powerful platform companies that have a “winner takes all” mentality such as Facebook, eBay, Amazon, Google, Twitter, Uber, Netflix and Salesforce.
Deep tech is distinguished from these software companies because it usually involves basic research sourced from universities. As Rachel Slattery, who founded Tech23 in 2009, says: “Deep tech is about creating things that help humanity.”
Hugh Durrant-Whyte, the NSW chief scientist and engineer, says the digital platforms have had their day and this was reflected in the recent sharemarket performance of the leading platform companies.
“There are only so many people who can build a platform,” he says. “I genuinely think deep tech is increasingly the next wave.”
Durrant-Whyte, who attended this year’s Tech23, is a recognised world expert in machine learning and robotics. He says he has seen many of his Phd students establish robotics companies, pitch to Tech23 and go on to make money.
Durrant-Whyte knows of several Australian robotics companies that are earning hundreds of millions of dollars in revenue.
Building new markets
Sally-Ann Williams, chief executive of Cicada Innovations, says investment in deep tech is making headway in Australia thanks to the mutually supportive community that revolves around Tech23.
“Australia is often perceived as a nation that fails to achieve its potential in the commercialisation of deep tech and research, but Tech23 has been shining a light on our capability and capacity since 2009,” she says.
She says the Tech23 alumni includes companies like Kaggle, a global data science company acquired by Google, Culture Amp, an Australian tech company in the local unicorn club, Myriota, a space company, Liquid Instruments, a scientific measurements and tools company, and Propeller, a data and analytics company.
“The community of people surrounding Tech23 paint a very different picture of what we are doing in deep tech, and the capacity we have to build new markets, new industries and bring them to the world,” Williams says.
“Tech23 provides an opportunity for emerging deep tech to showcase solutions to complex problems in a community of people who can support and nurture them to market. It’s a hidden gem that showcases what we are capable of in Australia.”
Williams was an industry expert on the same panel that put questions to Horsley. Another company that did its pitch before Quantum Brilliance was Baraja, a company with a unique light detection and ranging system for use in self-driving vehicles. It is backed by the CSIRO.
Baraja employs 95 people in offices in Sydney, San Francisco and Shanghai.
Just as impressive was OncoRes Medical, which won Tech23’s Greatest Potential Award. It uses intra-operative imaging technology to provide surgeons with real-time assessment of cancerous breast tumours.
Opportunity for Australia
Chief executive Katherine Giles delivered an inspiring look into how they are translating a surgeon’s sense of touch for faster recovery from cancer.
Medical devices and drug development comprise about half of all the deep tech investments made by venture capitalists in Australia, according to Mike Zimmerman, a partner at Main Sequence Ventures.
Main Sequence, which is backed by the federal government, the CSIRO and other investors, is one of the key deep tech investors in Australia. Others include Uniseed, Blackbird Ventures, Cicada Innovations, AirTree Ventures and Square Peg.
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Zimmerman says deep tech poses special challenges because its takes more time to come to fruition than other forms of tech and it is a hard sell.
Natasha Rawlings, an investment manager at deep tech investor Uniseed, says Australia has proven it can do well in all the key areas of deep tech including medical technology, agricultural technology, clean technology and quantum technology.
“This is not really about software – it is much broader than that,” she says.
“This is such an important piece of Australia’s future that we don’t celebrate at the moment. The whole ecosystem of government, universities, investors and state agencies have not stood together in a coherent way.”
Rawlings is a Tech23 alumni. She did her five minute pitch to a panel of industry experts seven years ago with a company called StreetHawk, which was a self-serve location-based marketing solution for retailers.
Rawlings says StreetHawk was probably ahead of its time. Either way, she says it gave her the credibility to move into investment management and come back to Tech23 as an industry expert.
She agrees with others that deep tech is the future of tech investing. “It’s all the things that are tricky to do,” she says.
Slattery says her original motivation for starting Tech23 was to give investment in deep tech a national focus. Since the first conference in 2009, she has seen some of the 250 companies that presented a five minute pitch go on to achieve fantastic success.
“The stakes are very high – many of the companies, and lots of our favourites over the years, have not made it,” Slattery says.
“We need deep tech. We need the research, the organisations that create and nurture these companies, the founders who lead them, the money that invests in them, the community who believes in them – and oh so importantly, a government that understands and supports all of this.”