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Sophie Lonergan, Investor Engagement Manager at Futurescope leads a panel discussion with Rick Hao … [+]
Conceived as an innovation agency promoting the development and adoption of digital technology across the U.K. economy, Digital Catapult has from its inception brought together startups, scaleups, investors, large businesses and government with the aim of solving industry challenges.
Up until relatively recently, the Catapult centres have tended to focus on software and technologies that apply to specific industries but under a newly-minted accelerator program dubbed Futurescope, the agency is putting a greater emphasis on supporting deep tech solutions that can be utilized across sectors.
But what does that mean in practice?
Well, the fruits of Futurescope’s labors were on display earlier this week when the agency organised a pitching session – followed by a networking event – for 32 deep tech companies in search of either Seed or Series A funding. All the businesses on show were alumni of at least one Futurescope accelerator and to a greater or lesser degree, their solutions aligned with the U.K. government’s net-zero agenda.
Beneath the overarching themes of deep tech and net-zero, Futurescope was showcasing a pretty diverse range of businesses. Not surprisingly, solutions designed to reduce waste and emissions were well represented. To take a couple of examples, Carbon Re’s artificial intelligence technology is aimed at enabling energy-intensive businesses to decarbonise and Greyparrot applies AI to monitoring, auditing and sorting waste at scale. But net-zero has many faces. Beaming in from another corner of the carbon reduction universe, WeWear uses NFT (non-fungible token) and net-zero blockchain technologies to create digital wearables.
But what was the purpose of the event? Digital Catapult has a strong presence within the U.K.’s innovation economy, so why create a sub-brand dubbed Futurescope? When I sat down with Sophie Lonergan, Investment Engagement Manager at Digital Catapult, I was keen to find out more.
As she explains, Futurescope is being positioned as Digital Catapult’s home for deep tech acceleration. “Digital Catapult has run a lot of technology-specific programs in the past,” she says. “But we see the real opportunities over the next ten years as being in cross-tech.”
In other words, technologies that can be applied across a range of industries and use cases. Artificial intelligence and machine learning are clearly centre stage, but Futurescope is also supporting virtual and augmented reality, the internet of things, and distributed ledger.
One key role of Digital Catapult, and by extension Futurescope, is to help startups find investors. As Lonergan acknowledges, when it comes to deep tech, there is a challenge, not least in terms of securing the investment required to give startups and scaleups a sufficient runway to bring their products to market.
In terms of research and development, deep tech entrepreneurs may well be sector agnostic. Or to put it another way, they may initially be working with a technology solutions that has yet to find a problems. Thus, indentifying a market can take time. Fast forward to the product development stage and another potential problem arises. A solution may need to be tailored for a particular client. For instance, an AI solution will not only need to provide a robust platform, it may also require quite a lot of industry data to enable the building of models. All this pushes the timelines for commercialisation further into the future. This was a point made by Harry Rhys Davies, Chief of Staff at Greyparrot in a presentation at the beginning of the networking evening.
And that has implications for investment. Companies working in the space require VCs who understand the data science while also being prepared to allow founders sufficient time to commercialise their products.
With that in mind, Futurescope has built relationships and partnerships with VCs such as IQ Capital and Speedinvest who already have an interest in deep tech. “The challenge now is to create interest in other investors,” says Lonergan. “How do we help them understand the scale of the opportunity.”
In terms of participation in its accelerators, Futurescope is looking for both startups and scaleups. Lonergan stresses that companies can be helped at any stage of their development. A focus on deep tech/cross tech is a prerequisite and after that, a range of criteria are applied to filter applicants.
“We assess the quality of the concept, market validation and demand,” says Lonergan. “We look at the team, the business model – how will the company monetise – and the competition in the market. We also look at funding received so far and how much equity has been given away.”
Digital Catapult has a good record in helping startups secure the capital they need – to date around £400 million in early-stage funding has been raised through its programmes. For those working in deep tech, Futurescope provides another acceleration option.