🤖 #12: Vivian's Deeptech Insider: 2024 Highlights and 2025 Outlook

Jobs at Vessl Prosthetics, Thymia, Nia Impact Capital and Khosla Ventures

Author

Vivian Chan, PhD
December 05, 2024

Hello and welcome to #12 edition of the fortnightly Vivian’s Deeptech Insider. I realised the previous post went out a week late (whoops!), so thanks for your patience. Back on track now with our regular fortnightly schedule.

It’s investor series this edition! If you've been following our newsletters, you know we alternate between founder and investor perspectives. Last time, we explored Building the ultimate Deeptech roadmap, so now it’s time to focus on investor insights.

We also track jobs to monitor market momentum, this time outlining opportunities at Vessl Prosthetics, Thymia, Nia Impact Capital and Khosla Ventures (scroll down for details).

Deep Dive (Investor Series):

DeepTech in 2024: Highlights, Challenges, and What to Watch in 2025 🚀

As 2024 comes to a close, the deeptech sector has seen both remarkable growth and notable challenges. From substantial government funding to breakthroughs in AI, quantum computing, and clean energy, the year has been transformative.

Investment Trends: A Year of Growth and Challenges

In 2024, deeptech investments continued to grow despite broader market challenges. Total investments in the deeptech sector reached $20.7 billion globally in the first half of the year, a slight increase from 2023's total of $39 billion.

However, market uncertainties have prompted investors to take a more cautious approach. High-risk, early-stage ventures have given way to later-stage investments, where companies have demonstrated more concrete milestones.

Sectors like AI, quantum computing, and clean energy continue to see robust interest. For instance, AI-related investments reached $12.2 billion in 2024, driven by the growing demand for automation and machine learning solutions across industries like healthcare and finance​. Similarly, clean energy startups attracted a record $8.5 billion globally in 2024, with many governments prioritising green technologies to meet their climate goals​.

While investors remain optimistic about the long-term potential of these sectors, there is a marked shift toward more mature technologies and businesses that are closer to commercialisation. This change reflects broader economic pressures and a desire for reduced risk in the face of uncertain markets.

Government Support: Driving Innovation with Significant Investments

Government initiatives in 2024 have played a pivotal role in accelerating deeptech innovation. Several countries have significantly increased funding to support key technologies:

  • U.S. Government: The CHIPS and Science Act, passed in 2022, continued to fuel growth in semiconductor manufacturing, with the Department of Commerce granting $39 billion in funding to boost domestic semiconductor production in 2024​. Additionally, the Department of Energy (DOE) announced $1.5 billion in grants to support clean energy startups, focusing on carbon capture, storage, and next-gen energy solutions​.

  • European Union: The European Innovation Council (EIC) allocated €1 billion in grants to deeptech startups across the EU, with a particular focus on AI, quantum computing, and clean tech​. Germany’s €1bn deeptech and climate tech fund (DTCF) started backing growth stage startups in 2024 in an effort to plug Europe’s post-Series B funding gap. 

  • United Kingdom: The UK continued to focus on fostering innovation through its Advanced Research and Invention Agency (ARIA). ARIA’s £800 million is committed to high-risk, high-reward research, with a strong emphasis on AI, quantum technologies, and sustainable energy​. Additionally, initiatives like Digital Catapult’s Black Founders Programme helped increase the diversity of founders accessing venture capital by connecting underrepresented entrepreneurs with investors​.

These government-backed efforts are essential in providing early-stage funding, de-risking innovation, and ensuring that deeptech startups can compete on a global scale.

Key Themes for 2025: The Rise of Sustainability and Tech Convergence

Looking forward, 2025 promises to be another year of growth for deeptech, with several key themes emerging:

  • Sustainability: Governments worldwide are ramping up their commitments to Net Zero, creating strong demand for clean technologies. In 2024, $14.2 billion was invested globally in sustainable deeptech innovations, with carbon capture technologies seeing the highest growth in funding. Expect this trend to continue, with a further push for green innovations in energy storage, renewable energy generation, and sustainable agriculture.

  • AI and Automation: AI remains at the forefront of deeptech innovation, particularly in automation. In 2024, $6.5 billion was invested in AI-powered automation technologies across industries, including manufacturing, logistics, and healthcare. In 2025, the emphasis on AI-driven solutions for operational efficiency and productivity gains is expected to increase as businesses seek cost-effective, scalable automation.

  • Tech Convergence: As various technologies converge, there will be increasing opportunities for startups that integrate multiple innovations. For example, AI-driven biotech is making strides in personalised medicine, while blockchain is being utilised to increase the transparency and efficiency of clean energy systems​. Startups that can leverage these technologies to create multi-faceted solutions will be particularly attractive to investors.

Investors are expected to continue focusing on sectors that offer both strong economic growth and the potential for social impact, aligning with global sustainability and equity goals.

What’s Next?

2024 has been a year of solid growth for deeptech investments, yet 2025 will be shaped by key factors such as government support, technological advancements, and evolving market conditions. Staying ahead of emerging trends in AI, clean energy, and tech convergence will be essential for those looking to thrive in the coming year.

As an investor or founder, focusing on the sectors that blend innovation with real-world applications will be key to positioning yourself for success in 2025. What trends have you observed in deeptech this year, and what’s on your radar for 2025?

Now, onto the jobs - Vivian

P.S. Move my emails to your primary inbox so you see the next edition!

Jobs at Deeptech startups:

Jobs with Deeptech investors:

If you have gotten value out of Vivian’s Deeptech Insider, please help us grow by sharing it with your friends!