TD Shepherd is thrilled to have attended Collision Conference 2023 in Toronto! Collision had lots of engaging sessions, interesting speakers, and amazing networking opportunities. The event served as a meeting ground for the brightest startups and visionary investors in the DeepTech space, highlighting the evolving landscape of technology.
We met many interesting Startups and Investors in the DeepTech space, and overall saw a shift in tone towards the space. As technology in the AI space continues to grow, major innovations in the fields of Energy, Storage, Processing and Sensing have to be implemented, and investors are realizing that the field of Deep-Tech is ripe with innovation and exciting startups to create these technologies. It’s inspiring to observe how investors are recognizing the immense potential within the Deep-Tech realm, fostering a vibrant ecosystem for groundbreaking startups to create and implement these revolutionary technologies.
Very exciting to see what’s in store for the North American tech scene, as a new found focus on transformational technology is right around the corner, making it a really exciting time for anyone in the Deep-Tech space. At TD Shepherd, we are excited to be part of these significant advancements, ready to contribute our expertise and support to help with The Next Steps.
At Collision TD Shepherd attended the panel session on “What is the new normal for seed investing” with a number of VCs on the pane (Everywhere Ventures, Cendana Capital, 2028 Ventures with Yahoo Finance as moderator). Of course, the main theme of the discussion was the high pre-money valuations of AI-themed startups. The conclusion of the panel was that high valuations would continue for some time, despite the reduced VC activity. Equally, relevant was the notion that the latest seed funding rounds seemed to stretch the period from the usual 18 months to 24 months. VCs are clearly of the opinion that the current downturn might continue for some time and want to make sure their investments provide a runway beyond that downturn.
As more VC Centric panels were held throughout the 2nd day of Collision, one of the very interesting chats was regarding the current state of Growth Stage companies. An unfortunate reality that faces many companies that raised later rounds in 2021/2 is that they are now facing large valuation cuts, and possible down-rounds.
Large injections of lots of cheap capital caused many companies to go out and follow one metric: Growth at all costs. With this north star, large companies gloated up as much talent as possible to be able to grow their sales and R&D.
With the changing economic picture now in 2023, there was a large shift from Growth to Efficient Growth, so that companies can now extend their runway and grow into their lofty valuations. This unfortunately has the real-life effect of downsizing and layoffs, which we are seeing across the industry.
The VCs (Cathy Gao, King Goh, CFA, Sri Chandrasekar) mentioned many of the executive trends they are seeing in their portfolio companies to weather the times ahead: analytics for operational efficiencies, cutting away side-projects and focus on core offerings that bring revenue, look for partnership sales funnels to decrease the size of sales teams, or to look at other financing like venture debt.
Another interesting talk was on the topic of M&A, where the VCs talked about how they are seeing a large growth in M&A activity across the industry. Due to the current market trends, companies with large cash reserves are seeing great opportunities to consolidate their market, acquire locked-up talent, and even potentially cash locked in their purchase targets.
Although mostly a sobering talk, there were glimmers of hope as 2024 was mentioned as an overall optimistic and exciting time to invest.
The TD Shepherd team is happy to congratulate the Qualinx B.V. team on successfully raising €20 million from Dutch investors. TD Shepherd has provided strategic support to Qualinx over the years (starting in 2018), witnessing each step of their journey; their growth and success, makes us truly proud of their outstanding achievements.
If there’s one thing we’ve learned about surviving the Valley of Death in deep tech, it’s this: don’t go it alone. This stage is all about leveraging relationships, and corporate partnerships can be your most valuable lifeline. The key is to think beyond customers.
The so-called “Valley of Death” in deep tech isn’t just about running out of cash—it’s about navigating a period where expectations clash with reality. Investors want to see traction, but your tech isn’t market-ready. Customers are intrigued, but they’re not ready to commit. And your R&D costs? They’re still burning through cash like it’s a bonfire.