Supporting Deep Tech Startups

Celeste Peh, Callaghan Innovation

In a world where entrepreneurs are told to fail fast and pivot often, there’s a special field that demands extensive research, resources and innovation before a product even reaches market testing, let alone sales. Deep tech encompasses the most cutting-edge technologies, from robots to rocket ships, silicon chips to hydrogen energy. Deep tech is high risk, high reward, and extremely challenging to launch. That’s where Celeste Peh from Callaghan Innovation comes in.

Background in commercialisation

Celeste’s journey into the world of deep tech commercialisation began at university. “I studied biomedical science and became interested in applying science to commercial ventures.” A master’s degree in bioscience enterprise gave her valuable insights into the business side of science.

Starting out in technical roles at startups focusing on commercial applications, Celeste eventually became the first employee of a natural health and wellness startup. As the company grew and even got listed on the NZX, Celeste gained firsthand experience in building a company from scratch. Her background in startups, combined with her scientific and business expertise, sparked her interest in funding and led her to her current role.

Today, Celeste is the product owner of the Technology Incubator Programme at Callaghan Innovation, where she plays a vital role in supporting New Zealand’s deep tech ecosystem. Funded by the Ministry of Business, Innovation and Employment (MBIE), Callaghan Innovation is the country’s innovation agency; it has a significant focus on research and development services, with about half of its workforce dedicated to providing research support to private industries.

High risk, high reward

Celeste’s current role is crucial in advancing deep tech. While Callaghan Innovation doesn’t often engage directly with early-stage startups, it supports them through incubator partners, who are best placed to nurture them.

"Deep tech startups are often complex, high-risk projects that hold immense potential but require significant time and resources. At the early stages, they face difficulties in attracting private investors due to their risk profile," Celeste says.

At this critical point, Callaghan Innovation’s Technology Incubator Programme steps in with funding.

Callaghan Innovation operates through five main streams: connecting innovators to industry, upskilling initiatives, technical and scientific services, hands-on mentoring from expert advisors, and funding support.

The first stream creates valuable connections among companies in sectors like agritech, healthtech and food innovation. The upskilling initiatives provide courses and workshops on essential topics like intellectual property, capital raising and product management, equipping entrepreneurs with necessary skills for success. A team of over 200 top scientists and engineers, working in world-class facilities, provide expert advice and consultancy to businesses, helping them overcome technical challenges, alongside conducting their own ground-breaking research.

 The mentoring stream offers a select group of businesses personalised, hands-on support from advisors within Callaghan Innovation who have sector expertise. Finally, the funding stream includes early-stage deep tech funding — the area Celeste works in — as well as grants that support R&D and provide students with real-world experience.

Connecting, funding and enabling

Celeste’s primary focus is on growing the number of early-stage deep tech companies in New Zealand. She collaborates with the incubator partners in identifying suitable opportunities and ensuring there is a plan for the startup to be well supported. “This can be challenging because while the concepts and ideas might be great, we are looking to support startups that have a global market opportunity and novel and defensible intellectual property.” Celeste plays a crucial role in finding the right balance and making informed decisions.

Sitting between the connection and funding streams, Celeste collaborates closely with tech incubators and supports them through their due diligence process with pre-incubation grants that often takes around 6 months. If the incubators and startups see a future together, they could apply for a repayable grant with Callaghan Innovation. Startups will get a minimum of $1 million in funding — $750,000 of which is a repayable grant and $250,000 in equity funding — to kickstart the commercialisation of their technology. This thorough process ensures that the project is genuinely early-stage and deep tech, with strong resource and budget planning to execute the grant.

Importantly, the repayable grant is linked to the generation of successful revenue, with 3 percent of the revenue being repaid annually. If a project fails, the grant is written off, providing a safety net for entrepreneurs.

Advancing the tech frontier

Celeste highlights the recent story of b.spkl, a company in the green hydrogen technology space. Born out of a decade of research conducted within a Crown Research Institute b.spkl emerged as a startup just earlier this year. The company has developed a catalyst to convert water into hydrogen energy using 25 times fewer precious metals and at a far more sustainable way than existing methods. B.spkl’s journey exemplifies the long and extensive research and innovation behind deep tech ventures.

Celeste’s ability to identify cutting-edge science and connect it with the necessary support and funding demonstrates her commitment to nurturing the growth of deep tech companies and propelling New Zealand’s technology landscape forward.

To learn more about Callaghan’s deep tech operations, get in touch.