Key Top-Down Technology Macro Themes and Ikove's Bottom-Up Technology Selection Process
As part of our investment process at Ikove, we look closely at core, top-down technology macro themes that we believe will reshape society and the way we live. We match this macro view with bottom-up research to identify the best technologies that will fit within these evolving trends.
Currently, we apply our technology allocation into three thematic verticals: STEM (science, tech, engineering and mathematics), MedTech and AgriTech. Additionally, we’re working on a new FinTech vertical to leverage the innovation that is taking place in the space.
Internet of Things (IoT): The Internet of Things will revolutionize our lives, with a projected 75 billion connected devices by 2025. Essentially, IoT is the latest reiteration of the computing cycle that started with mainframes, PCs, laptops, smartphones and now, what I call SmartX (smart cities, smart homes, smart buildings, smart cars, etc). SmartX will create a global sensor network that will provide unlimited data and information to cloud-based computing. This technology will interact in many different fields, such as health and wellness, driverless cars and preventive maintenance. The opportunities for smart technology are endless.
There are many challenges to building out a sensor network, like how will the billions of sensors for connected devices be powered? How can we protect and secure this network? How will this valuable data be managed?
At Ikove, we’ve approached this opportunity set via the power spectrum as a platform to enable the installation of a SmartX sensor network.
Our portfolio company, Nikola Labs, is building a wireless power technology to provide energy to low power sensors, without batteries or wires, across an array of different applications. Additionally, they are building a back-end data management and visualization system to capture and manage data so clients can optimize their decisions.
We are seeing industrial IoT as the initial killer application for wireless power as unplanned downtime costs $1 trillion per year for manufacturers worldwide. The opportunity set for preventive maintenance alone is expected to reach $11 billion by 2022 — Nikola is leading the charge and will be the first company to launch a fully operational product in 2018.
Artificial Intelligence (AI): AI is becoming intertwined in our daily lives as it is at the core of everything we as humans do. Machine learning is growing exponentially and will be a major source of technology growth in the next decade and beyond.
There is a tremendous opportunity at the intersection of AI and behavioral analysis. Utilizing AI to help us understand human emotions and human behavior is the holy grail of this technology. People are greatly influenced by feeling, and according to Behavioral Economics, 70% of our decisions are based on emotion. If AI can reveal what our emotional level is, it can help us understand and predict human behavior. This enables companies to stay at the forefront of industries ripe for disruption.
Cognovi Labs is on the front line of this revolution. Cognovi’s Emotional AI was built on the largest machine learning annotated data set and uses short form text to derive emotional analysis and predict behavior. We expect Cognovi to lead the field in E-AI and work closely with clients in a multitude of fields, such as politics, retail, sales and manufacturing.
Cognovi Labs focuses on two of the fastest growing businesses and technology developments of the decade: Big Data and business analytics. Global revenues from Big Data and business analytics are forecasted to grow from $130 billion in 2016 to over $200 billion in 2020, according to International Data Corporation (IDC). The most intense and strongest need for analytics falls into Cognovi Labs’ sweet spot – AI and Cognitive Computing – which IDC expects to grow from $8 billion last year to $46 billion in 2020.
Robotics: Industrial automation and robotics are changing the way we work and live. In the next five years, we will see greater development in robotics with the largest source of growth stemming from industrial robotics. However, the cost structure of industrial robots is quite prohibitive, and adoption has been slow since initial setup and ongoing maintenance is expensive.
One of the key features within industrial robots are speed reducers. At minimum, these devices represent 40% of the cost of maintaining robotics, and need to be replaced every 2-3 years. Circular Wave Drive (CWD) developed a line of speed reducers using university-backed technology, which will become the industry standard, cut cost in robotics by a third and democratize the use of robotics. With its line of speed reducers, CWD is targeting a $3 billion market opportunity.
AR / VR / Motion Tracking: The growth of Augmented and Virtual Reality over the last few years has been staggering. While there are a variety of different VR and AR applications, the biggest challenge facing these technologies is the lack of real-life recreation of human motion. “Drift” – or an imbalance in orientation – continues to plague the industry.
Soliton Reach created a technology that replicates and tracks the body’s skeleton mesh via small, lightweight wireless sensors called Solitons. These sensors are designed to combat the “drift” problem prevalent in VR and AR technologies. Solitons, which allow for accurate recreation of the body skeleton mesh in AR / VR environments, are being utilized in several key studies like the early detection of cerebral palsy. Additionally, this technology helps identify and treat the side effects of concussions and other diseases. Solitons can provide a higher standard of care for pre-op and post-op recovery in areas like orthopedics.
Regenerative Medicine / Tissue Engineering: Regenerative medicine, such as tissue engineering, is at the forefront of MedTech development and represents a $23+ billion market opportunity. The ability to reconstruct and regenerate organs is a dream derived directly from science fiction.
Current regenerative technologies rely heavily on biologics, which is prohibitively expensive, difficult to store and the results are underwhelming. In most cases, the healing capabilities of biologics are low quality and based on scar tissue (which takes longer to heal), cause continued discomfort, result in low range of motion and high chances of tear and reoccurrences.
Ikove’s MedTech vertical focuses on disruptive technologies developed by our partners at NanoFiber Solutions. Together, we have launched a portfolio of five companies in the following industries: wound care (RenovoDerm), orthopedics (Atreon), vascular (Vascular Genesis), hernia (Tarian) and neurovascular (eLum).
Unlike most of the solutions in the market, our core technology is a synthetic polymer that replicates the body’s cellular matrix, which acts as a scaffold to promote healing. The solution allows for faster, higher quality healing, and on histology analysis, can replicate the natural healing in the body. Recently, our technologies have been further validated with FDA approval for our portfolio company RenovoDerm.
While developed countries have achieved high levels of nutrition and significant development of agricultural technologies, developing countries continue to suffer from food and water scarcities. The lack of available food and water around the world continues to be one of the biggest challenges of our time.
Our AgriTech vertical focuses on a portfolio of technologies that are aimed at improving crop yields and understanding and lowering the cost of food supply for developing societies.
Soil1’s (our inaugural company in this vertical) mission is to feed the world by making in-field soil testing affordable and available to every farmer across the globe. Soil1 is a one-step soil test that gives a real-time measurement of soil organic matter, nitrogen and microbial vitality at a fraction of the cost.
IV. What is Next?
Ikove’s Startup Nursery will begin to focus on developing a FinTech vertical to take advantage of significant growth and disruption in the blockchain, digital cash, the advent of ICO and InsureTech industries.
We believe our technology verticals will launch more exciting companies in the years to come. Our process to refine our top-down macro view is ongoing. We will continue to identify disruptive technologies through our Startup Nursery’s bottom-up process and leverage key macro themes.