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Deep Technology in Supply Chains--Defining the Future

Deep technology--generally defined as technology that could take a decade or more to reach commercialization--is not a favorite investment of most VCs. Long time horizons, costly development costs, and early-on marginal market acceptance all make the typical VC firm shy away from such investments. But we need to bet on the future as many of our current technologies in supply chains are not sufficient solutions in the emerging new world order.

We were first introduced to Deep Tech when MIT founded The Engine. MIT faculty were coming up with many potential innovations, such as driverless cars, and having trouble getting venture capital firms to listen to them. Starting with a $150 Million deep tech fund in 2015, The Engine has a portfolio of over thirty innovative companies housed in an incubator in Cambridge and soon Somerville, including two that Supply Chain Ventures has invested in:

  • Mori--an all-natural protective layer that slows down the spoiling process of fruit, veggies, meats, and seafood to help you enjoy fresher food for longer. Mori is pioneering a natural, ultra-thin water-based coating that is applied to food to slow the exchange of gasses that cause decay. About the thickness of two red blood cells or just a fraction of the width of a human hair, their coating is tasteless and invisible, giving food drastically longer shelf life, without altering it in any way. The coating also enables less or alternative packaging, as it extends shelf life independent of plastic wraps, a fact that is not lost on food producers, retailers, and environmentally conscious consumers. Born out of Professor Fiorenzo Omenetto’s silk lab at Tufts University, the startup’s core technology was co-invented with Benedetto Marelli (now a professor at MIT with a lab dedicated to materials science and its intersection with agriculture). The pair were investigating the power of silk to stabilize drugs and vaccines when Marelli had the idea to stabilize something significantly larger: a strawberry. He coated the fruit with a silk solution and waited. Days later the strawberry still looked fresh—the coating worked. It was Omenetto and Marelli’s relationship with Mori co-founder Livio Valenti (also the founder of Vaxess Technologies, a silk-based technology company) that brought CEO Adam Behrens into the fold. For Behrens, harnessing a commodity material like silk to do something profoundly high tech, was nothing new. “The underlying theme of everything I worked on in my academic career was cost sensitivity. I fell in love with developing solutions out of seemingly unsophisticated materials,” he notes of his time as a doctoral candidate at the University of Maryland College Park. Behrens also spent time at MIT’s Langer Lab, where he worked on technical solutions to problems in the developing world, including single injection vaccination, point-of-care detection of infectious diseases, and food fortification. The mission-driven nature of this academic work, funded in part by the Bill and Melinda Gates Foundation, has compelling similarities to work at Mori. In both cases, Behrens is helping to solve problems that disproportionately affect those on the margins. Its founders consider Mori an “anti-waste company” and its mission is to make healthy food more accessible by keeping it fresher, longer.
  • ISEE--ISEE is engineering next-generation, humanistic AI to automate the logistics industry from dock to door. ISEE was the first autonomous driving company to achieve exit-to-exit autonomous highway driving, the first to merge onto a highway in heavy snow, and can handle congested traffic better than one of the most well-funded autonomous driving startups in the world. ISEE’s core technology is purpose-built for complex environments with high uncertainty (like shipping yards and congested highways). It understands context and infers the intentions of other drivers to navigate all possibilities as they arise, unlike other AI solutions that require hard-coding. Co-founders Yibiao Zhao and Chris Baker based the technology on the theory of mind, or the ability of humans to comprehend the intents and beliefs of others. They realized that if they could design an AI that could infer, then that AI could successfully navigate dynamic and unpredictable roadways. It wouldn’t need to know all possible solutions to a problem, it would just need to know how to react at the moment. The logistics industry is not one-size-fits-all. And that’s precisely why ISEE chose to pursue it. With its multiple vehicle types, highly variable operational settings, and shortage of drivers, logistics is uniquely suited to the value ISEE can provide. Its AI can boost efficiency in a shipping yard just as easily as it can navigate a highway trip or the stop-and-go traffic in a city at rush hour. And for logistics companies, there’s no need to buy new vehicles—the entire ISEE platform can be retrofit onto existing infrastructure. 

Another MIT-founded company, Thiozen, is also an investment by Supply Chain Ventures. Thiozen is a newly formed company focused on commercializing a novel chemical process to generate low emission hydrogen from sour gases. Their new process has the potential to dramatically reduce emissions from sour gas processing and hydrogen gas production. In 2021, Thiozen raised a seed round led by Eni Next with participation from Good Growth Capital, Supply Chain Ventures, and Mount Wilson Ventures. Thiozen will use these funds to scale its technology to a commercial demonstration. Success will accelerate the energy transition by allowing large energy customers to turn a sour gas waste stream into valuable low emission hydrogen. Current methods to produce hydrogen contributes to over 2% of all greenhouse gas emissions. Thiozen’s process dramatically reduces those emissions, with the power to avoid 300 million tons of carbon dioxide per year – double the amount of decarbonization achieved by installing solar panels on every US household.

Our investment in deep tech for supply chains is opportunistic. We do not see many such innovations directly. Often universities and other labs recommend such companies to us. If you know of any worthy of investment, please let us know.