Historically, innovators in the climate, health and livelihoods space have been underfunded, discouraging entrepreneurial risk-taking in the development sector. Several reasons contribute to this market failure, including the absence of an empathetic impact-first investment playbook. There is a need to build an ecosystem that can address the challenges of market failure, mission drift, suboptimal scale and financial sustainability encountered by innovators throughout their entrepreneurial journey.
Advancing breakthrough innovations could solve some of humanity’s most challenging problems; however, taking them from lab to market to communities requires a new approach.
Successful deep science ventures combine multiple talents (including scientists, engineers, and entrepreneurs) to solve problems. Breakthrough innovations necessitate the fusion of cutting-edge scientific expertise, robust engineering capabilities, and creative design thinking. The synergy between these three pillars propels revolutionary ideas from conception to impactful reality, solving complex challenges and shaping the future of technology and society.
The emergence of frontier technologies and new materials can lead to innovations that can help address previously unsolvable problems at a large scale. We are already seeing a convergence between the physical, digital, and biological worlds with advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies. The impact potential of these technologies is immense and open to human imagination.
Impact-focused deep tech start-ups addressing problems like climate change and healthcare, often work on breakthrough technologies such as energy storage, medical devices, advanced materials, etc. These solutions require extensive R&D before reaching a stage where they can be deployed, exposing the start-up to high technical risks and market uncertainties. The technology might not work as anticipated, or the product-market fit might take multiple iterations through pilots and validation studies for such advanced innovations. While venture capital funding has been pivotal in the start-up ecosystem, high R&D risk coupled with a long gestation period doesn’t align well with the investor playbook, primarily oriented towards business model innovation, tech-enablement, or digitisation of services.
There is a need to build an ecosystem to address the tough challenges science and technology entrepreneurs face in their lab-to-market journey. Most need support in establishing product-market fit, access to deployment sandboxes, and entrepreneurial mentoring. Non-dilutive funding is also necessary to continue through the deployment and scale-up in the form of market access support and subsidies. This is an important nuance that most investors and their capital providers need to understand.
It requires building or developing a full stack approach from lab to market to communities. Aggregating capital from diverse resource pools across government, private sector and philanthropy and allocating it efficiently to the most promising and impactful innovations will ensure the highest return on the investment. Such blended capital models can bridge the funding deficit and promote breakthrough and disruptive innovations, contributing positively to mass prosperity, well-being, sustainability and equity.
Social Alpha has been designed as a multistage innovation curation and venture development platform for science and technology start-ups that aim to address the most critical social, economic and environmental challenges. The Social Alpha architecture enables us to transition innovations from lab to market to communities by aligning the incentives of Society, Markets and State. Since its inception in 2016, Social Alpha has nurtured over 300 start-ups, including 100+ catalytic grants and 80+ seed investments.
– Manoj Kumar, Founder, Social Alpha