You probably heard the term deep tech in the news lately. And if you’re not sure what that means, read on.

As one of the very few women investors in the fields of deep tech and renewable energy, I see how this technology trend will affect many aspects of our daily lives.

What is it?

Deep tech refers to technology that is based on scientific discoveries or engineering innovations.  

It typically involves the application of advanced tools and techniques, such as artificial intelligence (AI) and machine learning, to develop novel technnologies that can completely reinvent an industry as we know it or even lead to the creation of entirely new industries altogether.

These technologies help solve complex problems and often require significant research to develop solutions that combat the world’s toughest problems in unique ways, making them gamechangers and leaders in their respective sectors.

What problems could it solve?

Deep tech has the potential to create significant impact and value in a wide range of industries and fields.

Examples of its impact are seen in healthcare, where AI and machine learning algorithms can be used to analyze large amounts of medical data to improve diagnosis and treatment of diseases.

In energy, it can be used to improve energy efficiency and reduce dependence on fossil fuels.

In transportation, deep tech can be used to create autonomous vehicles and improve logistics and supply chain management.

Additionally, it can also help solve global challenges such as climate change, food security, water security and healthcare access.

Overall, it has the potential to drive economic growth and improve people’s lives.

Investors are recognizing the potential. Funding quadrupled from $15 billion to more than $60 billion between 2016 and 2020, according to the Boston Consulting Group.

While it’s still relatively early days, investments in this sector are already proving to be profitable both in financial terms, as well as in social benefits to be gained.

Israel’s role in developing deep tech

Israel is a hub for deep tech innovation and is often considered a global leader in its development. There are several reasons for this.

First, Israel has a strong culture of innovation and entrepreneurship. It has a high density of startups and venture capital firms, and a well-developed ecosystem for supporting early-stage companies.

Second, it has a strong tradition of military research and development, which has led to the development of expertise in areas such as cybersecurity, robotics and unmanned systems.

Israel also has a highly educated and skilled workforce, with a large number of engineers and scientists.

And finally, the country has a large number of major companies and multinationals that have R&D centers in the country, and also a large number of academic institutions that conduct cutting-edge research in deep-tech fields such as computer science, electrical engineering and biotechnology.

Overall, Israel’s investment in deep tech is one of the main reasons why it’s considered a Startup Nation and continues to be a major player in the global tech industry.

Companies leading the deep-tech trend

Some great examples of Israeli companies playing a leading role in deep tech include:

Mobileye, founded in 1999, specializes in the development of advanced driver assistance systems (ADAS) and autonomous driving technology. The company created a brand-new market and became a pioneer in autonomous vehicles, which then made Israel a major hub for the global automotive industry.

Arbe 4D provides a low-cost and high-performance radar solution for autonomous cars. This technology is expected to be significant in the development of autonomous driving and other deep-tech applications in the future. Arbe won a CES Innovation Award in 2022 and 2023.

Addionics is another gamechanger company in deep tech because it is based on advanced materials science. The company’s technology has the potential to significantly improve the performance, safety and cost-effectiveness of energy storage devices, making them more suitable for a wide range of applications such as electric vehicles, renewable energy systems and consumer electronics.

A variety of Israeli tech companies, ranging from startups to highly funded unicorns, are leading the way in deep-tech innovation across a variety of fields including AI, the expansion of the Internet of Things (IoT), and the growth of 5G networks.

We expect that deep-tech innovation will have a significant impact on the advancement of technology, particularly AI and machine learning, in the coming years.

Istanbul native Lisya Bahar-Manoah is a general partner at Tel Aviv-based Catalyst Funds, a private equity fund that invests in Israeli companies. She is an expert in raising capital, M&A, and post-merger integration, achieving exits and post-merger integration, is responsible for significant merger and acquisition transactions in Europe and in Israel, and is a board member of several startups and high-tech companies.