Interview with Will Richardson

As Australia’s premier VC fund in the impact investing space, Giant Leap understandably backs deep tech startups looking to help solve the biggest problems in the world. So, I am very pleased to be able to share this perspective on deep tech from Will Richardson, Managing Partner at Giant Leap.

How did you become involved in deep tech?

I wouldn’t describe myself or Giant Leap as deep tech investors per se. At Giant Leap, we look for opportunities that meet our investment mandate, offering both scalable impact and risk-adjusted venture capital returns. 

We see significant commercial upside in deep tech that also aligns with our mission to make a lasting, positive impact.

To set the stage, here’s how we define deep tech.

We see Deep Tech involving high-potential technological breakthroughs with inherent technical risks. Deep tech startups usually require more time and capital than traditional startups. Giant Leap’s interest in deep tech is largely driven by its potential for transformative, scalable solutions to global issues.

Deep tech now represents about 20% of all venture capital funding, a notable increase from 10% a decade ago. The investment in AI and the infrastructure around it has been a major contributor to the increase in investment in deep tech.

What are the unique considerations when investing in deep tech, compared with other startups?

Deep tech offers potential for high returns by addressing large global markets with defensible moats. However, it entails greater risks due to the complex technology, significant capital needs, and extended development timelines. Additionally, cultural differences can arise between academic research environments, for example, where timelines align more with a PhD program, and the rapid pace expected by commercial investors.

Traditional institutions often use a Waterfall approach—where each phase is sequentially completed—whereas an Agile methodology, with its iterative, flexible, and adaptive approach, is generally better suited to deep tech. Agile allows for faster product iteration, better responsiveness to market needs, and an early focus on value creation, which builds trust with stakeholders and helps secure new capital as milestones are met. 

Here is a comparison of the approaches and the advantages and disadvantages of both methodologies.

Can you give examples of deep tech companies you admire?

From our portfolio, Change Foods is impressive. This precision fermentation company creates animal-free milk proteins for cheese and dairy. They've successfully produced high-purity casein with qualities that major food companies find impressive, especially for mozzarella applications. Their product integrates seamlessly into food formulations without impacting taste, achieved with limited capital through rapid experimentation and outstanding execution. 

Additionally, Goterra, has mastered the biological, logistical and technological complexity of managing organic waste which is a world-first that presents an enormous commercial opportunity with a deep moat given the layers of complexity. Goterra has installed one of their robot-controlled modules in a car park at the Hyatt Regency in Darling Harbour, Australia’s biggest hotel with 878 rooms. Goterra’s facility will consume the daily piles of food waste with maggots. From there, the fattened larvae are sold to Hilltops Free Range Farm in the Lachlan Valley as high-protein chicken feed. Hilltops supplies the Hyatt Regency with their eggs. 

Why do you think Australia doesn’t yet have deep tech successes as well-known as Atlassian, Canva, or Airwallex?

Australia does have globally recognized deep tech firms in healthcare on the ASX, including:

• Cochlear: A leader in hearing implants, Cochlear has achieved a market cap of around AUD 18.7 billion.

• CSL: Known for blood plasma therapies, CSL is valued at approximately AUD 137.5 billion.

• Pro Medicus: A lesser-known leader in medical imaging software, Pro Medicus has a market cap of AUD 20.4 billion.

How do you decide the proportion of deep tech startups in your portfolio?

Our portfolio includes roughly ~25% deep tech. Rather than aiming for a specific target, we prioritise teams with impactful solutions to significant global social and environmental challenges, backed by market readiness, customer willingness to pay, and favourable regulatory timing.

What podcasts/books/people have influenced your perspective on investing in deep tech?

Here are a few that have shaped my perspective on investing in deep tech:

• Economic Moats – Warren Buffett: Buffett has extensively explored the value of economic moats, which protect a company’s competitive advantage. The Essays of Warren Buffett is a great starting point, and the article Understanding Warren Buffett’s Economic Moats by Harvard Business Review provides an accessible overview.

• Cost Curves – Clayton Christensen: In The Innovator’s Dilemma, Christensen explores how lowering costs enables disruptive growth. The Christensen Institute’s summary and Christensen’s TED-style talk offer further insights on this.

• Capital Efficiency – The Lean Startup: Eric Ries’ The Lean Startup emphasises capital efficiency and developing a "minimum viable product." For a deeper understanding, see the Lean Startup website or Ries’ interview on Lenny’s Podcast.

A crucial theme across these sources is the management team’s focus on maintaining balance, sequencing, and prioritising these principles, as each carries its own trade-offs.