Invest in Applied Deep Tech and Reach the Market Within a Year or Two
For years, Deep Tech was considered the opposite of "fast to market." But that view is changing. Today, entrepreneurs and investors are realizing that deep technological innovation and rapid commercialization can go hand in hand.
At the heart of this shift is a concept i3 Partners calls Applied Deep Tech — a practical approach to turning scientific breakthroughs into viable products quickly.
"It's a term we use internally to guide investment decisions," says Eran Wagner, managing partner at i3 Partners. "If we see innovation with strong commercial potential and a path to market within a year or two, we move forward."
Innovation Must Meet a Real Market Need
Deep Tech refers to technologies rooted in scientific or engineering advances. But translating those breakthroughs into products that fit market needs and timing remains a challenge.
"Startups often struggle to align technological innovation with a clear market purpose," says Noga Kap, managing partner at i3. "For success, there has to be a direct link between the technology, a real market pain point, and a well-defined goal from the start."
Wagner agrees: "We expect to see the product's value to the customer within two to three years. Startups that start with both a technological edge and a clear understanding of real-world value tend to focus early on proving scalability."
From Idea to MVP
So how is this done?
"The key is identifying a real need and testing feasibility early," explains Kap. "You build an MVP — a Minimum Viable Product — that demonstrates value to customers. In hardware, that can be harder due to development costs, so it's critical to design an MVP that genuinely excites potential users."
Early MVPs allow startups to test economic viability, get user feedback, and validate assumptions — such as whether the problem they're solving really matters to customers, and whether the solution is both useful and unique.
"This approach saves time and money," adds Wagner. "Instead of investing years in full development and discovering mistakes too late, you start small, learn fast, and adapt to the market as you go."
A Case in Point: Nanofabrica
Wagner cites Nanofabrica as an example of a Deep Tech company that took this path successfully.
"They developed nanometer-resolution 3D printing technology, but instead of waiting until they had a full product, they started with a 'service bureau' model," he says. "Around 250 companies from different industries were able to test the technology early on. From that, Nanofabrica identified three promising use cases, raised funds for product development, and even began receiving early orders."
Common Pitfalls
Many Deep Tech startups, Wagner notes, still make the mistake of focusing solely on R&D before engaging the market.
"By the time they look for customers, competitors may have moved faster or the market may have shifted," he says.
Kap adds: "When companies stay connected to the market from day one, they end up developing products that fit real demand — even if it means letting go of the founders' original vision."
The AI Revolution Is Opening New Doors
"The AI and robotics revolution may be the most profound transformation we'll see in our lifetimes," says Wagner. "We're getting close to the day when machines will outpace humans in software development."
That, he adds, is one reason i3 Partners remains among the few pre-seed Israeli investors still backing hardware alongside new AI ventures.
Recently, the fund invested in two Agentic AI companies:
- Hedgify, which helps manufacturers manage raw material price risks through data-driven decisions and hedging tools.
- Journeyz, a B2B data platform serving SaaS companies, that creates a new layer of organizational insights based on customer interactions, usability, and business metrics — enabling new insights and personalized automation for stronger customer loyalty and growth.
Working with i3 Partners
i3 invests in a wide range of sectors — from smart cities and robotics to precision agriculture, industrial IoT, critical infrastructure, drones, 3D printing, AI, quantum computing, and medical devices.
"Eran and I believe in staying close to the field," says Kap. "We connect our portfolio companies with partners and potential customers throughout product development. We're big believers in the Lean Startup approach — short iterations, quick feedback, and a
constant focus on customer value."
"We work closely with founders and act as their sounding board," adds Wagner. "Building a company is tough. If we can help founders stay focused and move faster, everyone wins."
About i3 Partners
i3 Partners is an Israeli venture capital fund founded in 2017 by Noga Kap and Eran Wagner, two leading and experienced investors. Based in Tel Aviv, i3 focuses on pre-seed investments in the field of Applied Deep Tech.
Its portfolio includes Zencity, Prisma Photonics, Nanofabrica, Xtend, Vanti, Frontegg, Tulu, Oxeye, Hedgify, and Journeyz.
In collaboration with i3 Partners
