Estonia is well-known internationally for its startup ecosystem and numerous unicorns, but its deep-tech sector could use an additional boost. That’s why the University of Tartu decided to form a consortium with Tallinn University of Technology, Tartu Science Park, and Tehnopol Science and Business Park to launch a new Health Research Accelerator.
One aim of the new program is to help 15 deep-tech teams get to market. But an even more important goal is to inform a national strategy for developing the deep-tech ecosystem in Estonia. “The main purpose of the project is not only to run the Accelerator,” said Kristel Reim, head of the Center for Entrepreneurship and Innovation at the University of Tartu. According to Reim, by running 15 pilot projects within the Health Research Accelerator program, organizers will get a better sense of the obstacles facing deep-tech companies.
This will help determine how to best assist deep-tech ventures in the future, and will help them craft a five-year strategy for Estonia in the field of deep-tech, she said.
But what is deep-tech anyway? Deeptech refers to companies with a business model based on significant scientific and technology innovation. While Estonian science is also considered to be strong, technology developers often experience trouble turning their discoveries into products.
“Estonia has a very booming and vibrant startup ecosystem but not so much on the deep-tech side,” noted Kadri Tammai, head of Tehnopol’s startup incubator. “We are definitely not doing as well at converting science to business.”
Part of the issue stems from investment and support. Deeptech companies in general need longer and more sustained support to turn their ideas into viable commercial products. As Reim pointed out, scientific projects at the university level typically achieve a technical readiness level of 1 or 2, but startups and accelerator programs typically want to take in projects that are at a level of 5, if not 6 or 7. It’s that gap between discovery and prototyping that the new accelerator will close.
The total budget for the accelerator at the moment is €700,000. Each of the 15 teams selected for the accelerator will receive about €20,000.
The program has already selected five teams for the first part of the accelerator program. These include Menken Trials, which is developing a cloud-based product to accelerate document management during clinical trials; Gearbox Biosciences, which has developed a platform for protein production; Softrobot, which is developing an artificial robot skin; Äio Tech, which produces edible oil using yeast obtained from the residues of the wood and agricultural industry; and Drug Hunter, which offers a portable analyzer for drug testing.
According to Reim, an additional 10 teams will be added to the Health Research Accelerator in the fall. The universities supporting the Health Research Accelerator will faciltate access to other scientists and a wider ecosystem for deep-tech healthcare companies, she said, noting that there are already deep-tech companies active in Tartu. In Tartu, program members will also be able to work with partners at Tartu University Hospital, which will serve as a location for projects, Reim added.
In Tallinn, participating companies will also get access to Tehnopol Science and Business Park as well as Ülemiste City, both of which have thousands of employees who are typically eager to try and test different healthcare solutions.
“Estonia is small enough to be a test bed for new solutions,” commented Reim.
According to Tehnopol’s Tammai, the universities involved with the Health Research Accelerator will focus on mapping the deep-tech ecosystem and understanding any inherent challenges. “They will figure out what the obstacles in Estonian deep tech ecosystem are, and what we need to do differently in the future,” she said.
The Health Research Accelerator program’s partners will also determine the ideal length of the program, and what services are necessary. Prototyping services will be supported by the universities, Tammai said. Tehnopol and Tartu Science Park will provide business services, including specific training programs, key mentorships and field-related expert mentors. It will help participating teams to launch their products and services, and to onboard their first private capital investments, she said.
“It’s said that the first part of your startup is called the Valley of Death,” Tammai commented. “That means if you make it through the Valley of Death, you will get traction and private capital will take an interest in you.”
For early stage deep-tech teams, the Health Research Accelerator program will enable them to develop their products, business models and go-to-market strategies without needed infusions of private capital. “This grant helps them to develop the product itself,” said Tammai. “And it will be complemented by the business services we are providing for the teams.”
Written by: Justin Petrone
This article was funded by the European Regional Development Fund through Estonian Research Council.