The TD Shepherd team recently had the opportunity to attend the highly esteemed Deep Tech Connect event, organized by the Extreme Tech Challenge and HighTechXL.
Deep Tech Connect is a premier gathering of visionaries, innovators, and investors who are shaping the future of technology. This event brings together cutting-edge startups, industry leaders, and venture capitalists to foster collaboration and explore groundbreaking advancements in deep tech.
Impressed by the quality of the pitches and surprised by several solid startups, scale-ups and alumni:
• Finnadvance: Prateek Singh
• Maaind: Dzera Kaytati
• HealthPlus.ai: Bart Geerts
• Vertoro: Michael Boot
• Gazelle Wind Power: Jon Salazar
• Virtuleap: Amir Bozorgzadeh
• Incooling: Helena Samodurova
• Alphabeats: CEO Han Dirkx
• Spectrik: Rick Jongen
• Luper Technologies: Maarten Kieft
• Senergetics: CEO Frank Jacobs
The introduction keynote from Peter Wennink, ASML was a good summary reflecting on the importance of perseverance and an ecosystem where innovation is not organized within a company but comes from the ecosystem among companies, including startups.
The keynote from Nicolas Autret, Walden, summarized their new report “The European Deep Tech Report” how DeepTech in Europe has grown strongly, the emerging areas in DeepTech and Deep Tech startup characteristics and risk-profile differences.
Jean-Francois Bobier, BCG, expressed Climate change being an opportunity for Deeptech startups.
The breakout session with NXP Semiconductors confirmed and expressed the growing importance of supporting the startup ecosystem to drive innovation. There was some concern from the audience on the corporates walking away with innovative ideas from the startups.
Overall The “Eindhoven region” was seen as a role model for a cooperative high-tech ecosystem among all companies.
Besides further on stage forums and discussions, it was great to reconnect with many people.
One of the challenges that comes with design services is the cyclical nature of the services business. When the economy tightens and corporates are watching their operational expenses, the first step will be to halt any external contracts/contractors which are not deemed absolutely essential.
Whereas the earlier (staircase) model is a good approach in scaling up revenue and creating new revenue streams, the foundation of the company is still based on the service model: headcount continues to be the main driver (typically up to 60-70% of revenue). In terms of (enterprise) valuation the additional revenue streams, however, will already make a significant difference.
Design services companies typically start small (some exceptions when it concerns management buy-outs) and natural growth is a slow process as it requires hiring and training of engineers based on/driven by the revenue stream of the company. Growth of business is tied to growing the team and it is not always easy to find the engineers.