“Let’s talk about good things? Let’s talk about Tekpix?” Is it a meme? Yes. But in this case, it fits like a glove, because we are going to talk about good things, we are going to talk about the relationship between deep tech and venture capital.

So, come closer, because we are going to unlock the algorithms of success!

Once upon a time there was a nerd – oh, no, not a nerd, come on! Geeks. Okay, let’s try again. Once upon a time there was a geek who gathered other geeks in his garage, or in the hallways of college, to “copy” a foreign website that was booming in the States, with the goal of launching one in the tropics. Tropicalize, you dig?

But of course… With a good buck from some first-time investor, settled in Vila Olímpia (preferably in CENU-WTC, with the D&D Shopping Mall right next door, you know?), in São Paulo (SP). An investor who was dying to ride the wave of the web that had just emerged and would revolutionize the Galaxy and make the whole world rich quickly.

Nice, isn’t it?!? Not so much.

That, my dear, was the basic script for the early days of the “dot-com” world. In reality, we’re talking about the late 1990s and early 2000s. A time highlighted by names like AOL (which later merged with Time Warner), Star Media, Yahoo!, MSN, Lycos – in Brazil, our pioneers were companies like Mandic, UOL, BOL, Buscapé, Cadê, Webmotors, SOL (owned by Silvio Santos, believe it or not)…

It was a crazy life. Without exaggeration, almost every single day a new website appeared in the world and in Brazil that made it possible for investors to make a lot of money easily. You already know the end of this story, because you experienced it all up close or from afar, it doesn’t matter… The Nasdaq crash, the bursting of the internet bubble, etc.

Computer from the ’90s.

Now, let’s cut to 2010.

At that time, the startup ecosystem as we know it today began to form in Brazil, including that fancy name (“startup”) and the construction of a chain of seed money (seed investment), angel investors, the first venture capital funds focused on “young technology-based startups”, the media starting to cover this area, and so on…

A time marked by the effects of Steve Jobs’ disruptions (iPhone in 2007 and iPad in 2010), the era of apps, fintechs and the diversification of e-commerce, with the emergence of many startups. Even creatures from the magical universe began to populate our dreams (have you ever heard of unicorns?).

Apple Museum in Poland displays models of the iPhone and iPad.

To summarize this in a shorter way than a tweet, what held this stage together – which lasted in this format until recently – to the first dot-com blazing fire was another very cute term: copycat.

In plain English, this described a startup that based itself on (or even copied, outright) the business model or services already tested out there. And where were they validated? In Silicon Valley, USA, bro!

Now cut to the post-pandemic world, my friend.

It was this trajectory, with the learnings and improvements along the way, that allowed us to enter a new phase more recently, much more sophisticated, complex and deeply in tune with the issues of our time: the Era of Deep Techs. The stars of the moment are startups with solutions based on cutting-edge science and technology – smart people type of things, PhDs -, designed to solve critical problems of the Brazilian economy.

We are talking about challenges related to climate change, renewable energy, deforestation, green economy, automation, Artificial Intelligence, blockchain, robotics, quantum computing, biotechnology, bioengineering and advanced materials for industry.

The PhDs, in turn, realized that, in order for their knowledge to generate an even greater impact on society, they could undertake and transform their discoveries into startups – in this case, the so-called deep techs.

Just to give you an idea of ​​the current state of this segment, it is estimated that deep techs received US$ 8.4 billion in investment in 2019 in Europe alone, an increase of 25% compared to the previous year. Worldwide, it was US$ 18 billion in 2018, registering at the time a 25% annual growth, according to data from the Boston Consulting Group.

In Brazil, although we are still at the beginning of a journey that has no end, deep techs have been gaining strength thanks to an increasingly mature startup ecosystem. Innovation hubs and the venture capital segment play an important role in this process. But the magic formula is for these players to get closer to scientists and researchers, those who are immersed in laboratories searching for solutions to the major problems in Brazil and around the world. “Our examples of business success come from initiatives that have managed to combine science, technology, innovation and a pragmatic business vision, both nationally and abroad,” says Carlos Moura, partner at Space Wise and researcher at the SENAI Institute for Innovation in Renewable Energy (ISI-ER).

He believes that the productive segments that are already strong (such as energy, agriculture, mining, aeronautics) and those that have relevant consumer markets (connectivity for people and machines, cosmetics, entertainment, remote sensing in a broad sense) can receive a new boost from technological improvements and new businesses. “Venture capital can connect these dots, enabling ideas that become solutions that leverage our economy and our well-being,” says Moura, who is also the former president of the Brazilian Space Agency (read more in the 3 Questions section).

For Anderson Correia, president of the Institute of Technological Research (IPT), Brazil has several promising areas from a scientific and business perspective, such as aeronautics, agriculture, satellites and alternative fuels. However, in order to move forward, strengthening the connection between academia and venture capital is essential.

On the stage

One of the sectors in which deep tech has been shining for some time in Brazil is technology for agribusiness (AgTech). With 20 years in the market, Smartbreeder, for example, has a predictive platform that helps control diseases and pests. To do this, it collects huge amounts of information from various points on the farm to tell farmers where, when and how they should use agricultural inputs or pesticides. The analyses and predictions are made using a series of technologies, such as Big Data, Artificial Intelligence, Deep Learning, Machine Learning, Cognitive Computing and Crop Modeling.

With over 100 employees, Smartbreeder works with around 100 partner mills and 443 sugarcane plants. “We have over three million hectares and over 25.000 farms. In the last harvest, there was a reduction in losses to our base of BRL 5 billion,” he recalls.

In the case of Ponta Agro, innovation is also the basis of the business, but in this case, with a greater focus on livestock. Headquartered in Maringá (PR) and Betim (MG), the company uses precision technology to facilitate data collection and processing in research, genetics, pasture and confinement.

With a presence in nine countries, Ponta Agro has more than 120 employees, who serve around 500 livestock customers, both in the commercial segment and in genetic improvement centers. According to the company, its technologies manage more than seven million animals per year and more than BRL 25.8 billion in assets under management.

Technology for measuring the feed efficiency of Ponta Agro, known as Intergado Efficiency. (Photo: Disclosure)

The Cybersecurity thing

If agriculture is tech and pop, cybersecurity shines as the shield that protects companies in the most varied sectors. And there’s science and innovation to get the job done! The more technology advances, with Artificial Intelligence, 5G and IoT and whatever else you can imagine, the more cybersecurity needs to invest in research to develop new protection solutions.

The Brazilian company Apura Cyber ​​Intelligence, for example, emerged in 2012 driven by the market’s need for a company capable of responding to incidents and forensic analyses. Its main product today is BTTng, an open-source intelligence and cyber threat platform that obtains information on the most diverse threats, whether internal or external.

Under constant change, this area of ​​technology is set to become even more complex and necessary in a highly connected and automated world. “The future of digital security will be marked by an exponential increase in the complexity and sophistication of threats, driven by the growing adoption of technologies such as AI, 5G and IoT, which expand the attack surface and create vulnerability vectors,” says the CEO. He continues: “Cyber ​​intelligence will be crucial to monitor and respond to incidents on a global scale, while anti-fraud solutions will be indispensable to protect transactions and data in an increasingly digitized and integrated environment.”

With more than 250,000 security alerts issued and 75 employees, the company has around 150 clients, including 15 of the 20 largest banks in the country and 7 of the 10 largest energy companies. For 2025, the goal is to strengthen its international presence, in a strategy that began last year with the opening of an office in Miami, United States. “We also intend to launch more products to reach other markets and companies of all sizes,” says the CEO of Apura Cyber ​​Intelligence.

As you can see, we have good examples of startups in Brazil that are immersed in activities that are vital to the economy. These are companies with complex solutions, developed by specialized teams and linked to innovation. This is a very different market moment from that of the copycats we saw in the infancy of the Brazilian internet.

“The first rule of any technology used in business is that automation applied to an efficient operation will increase efficiency. The second is that automation applied to an inefficient operation will increase inefficiency.”

Bill Gates

3 Questions for…

Carlos Moura

Partner at Space Wise, researcher at the SENAI Institute for Innovation in Renewable Energy (ISI-ER) and former president of the Brazilian Space Agency

(Photo: Disclosure)

1) Brazil has a tradition of developing cutting-edge technology in some sectors, including agribusiness and space. On the other hand, for a long time the Brazilian venture capital market relied on investments in startups that replicated the technology (software) and business models coming from Silicon Valley. More recently, this scenario seems to have begun to change, with investors and entrepreneurs using cutting-edge science to generate new businesses. What are the most strategic areas for the country and how can science and technology be used to boost national development?

Brazil undoubtedly produces scientific knowledge. However, we need to transform these results into products and businesses in an increasingly interconnected and competitive world. Our examples of business success come from initiatives that have managed to combine science, technology, innovation and a pragmatic business vision, both nationally and abroad. I believe that our productive segments that are already strong (such as energy, agriculture, mining, aeronautics) and those that have relevant consumer markets (such as connectivity for people and machines, cosmetics, entertainment, remote sensing in a broad sense) can be the target of technological improvements and new businesses. Venture capital can connect these dots, enabling ideas that become solutions that leverage our economy and our well-being.

2) You have extensive experience in the space sector and are also a researcher of innovation in renewable energy. How important is it for the country to bring the space sector closer to the field of renewable energy?

Renewable energy is a concept that, in order to truly become sustainable and reduce environmental impacts, requires technology on all fronts. Environmental studies, production monitoring, logistics and operational efficiency, circular economy: these are several aspects in which space systems can contribute. To be honest, there are few activities that do not use, in some way, some service provided by the space sector. There is much talk about Brazil – which already has a very clean electricity grid – becoming a major powerhouse in the production of clean energy and related products. Relying on satellites, with a wide variety of missions, to reduce investment risks and ensure safe and optimized production is certainly an imperative that we must resolve. We have no shortage of local capacity!

3) With the new space race underway around the world, the trend is for us to enter an era of new scientific and technological discoveries, with impacts on different sectors, such as agriculture, telecommunications, meteorology and connectivity. How should the country prepare itself, in terms of investments in scientific research and new technologies, to participate in the game from now on?

The main economic sectors already use space-based information and services. Positioning, navigation and time systems (GPS and similar), communications and new connectivity services – hence the so-called direct to device – have allowed significant improvements in productivity gains. Even in the daily lives of ordinary citizens, several tools already allow them to evolve in terms of safety, comfort and availability. The problem is that most of them come from external suppliers, precisely because we are slow to connect our scientific and technical capabilities to the ability to produce marketable solutions. The mentality of young people graduating from universities and technical courses has changed. Entrepreneurship has become a common topic. It is necessary to strengthen mentoring and investment mechanisms so that we are not only dependent on actions from the government structure.