The Promus Ventures DeepTech Growth Index
Launching New Stock Index That Tracks Market Multiples, Metrics and Share Price Performance of Leading DeepTech Public Companies
From our offices in Chicago, San Francisco, and Luxembourg, Promus Ventures has been fortunate to invest in numerous leading DeepTech startups across the globe for over ten years. We continue to invest initially at early-stage rounds in best-of-breed founders and teams, and some of our 100+ portfolio investments include such innovative companies as Rocket Lab, WHOOP, AngelList, ICEYE, Mapbox, FLYR Labs, Cobalt Robotics, Kensho, Swift Navigation, Gauss Surgical and many more.
Introducing the Promus Ventures DeepTech Growth Index
In September 2021, we debuted the Promus Ventures New Space Index that tracked and compared the price performance and multiples of new and legacy space companies. In January 2023, we partnered with Euronext, the European Commission and the European Space Agency to publish a space sector stock index focused on Europe. You can track the Euronext Helios Space Index daily here.
As space is only one of six DeepTech subsectors in which Promus Ventures invests, it made sense to build a larger DeepTech-focused index.
We are proud to announce that today we are officially launching the Promus Ventures DeepTech Growth Index. This new DeepTech index compares price, multiple and growth performance of a group of public companies on US exchanges across all DeepTech sectors.
Our space index will now be folded into the larger Promus Ventures DeepTech Growth index. We will continue to send out a newsletter once every two weeks that shows additional public stock analysis and insights across the DeepTech industry (sign up here if you want to receive the newsletter).
We dive into forward and historical multiples and allow the user to understand how the market views the DeepTech companies we track. For example, per the Tesla graph shown below, it has been fascinating for us to watch over the last year Tesla’s EV/NTM revenue multiple fall back down to (and recently under) our manufacturing subsector median EV/NTM revenue multiple.
Defining Our DeepTech Thesis and Framework
At Promus Ventures, we believe that large sectors of the global economy (i.e. logistics, manufacturing, construction, energy, resource extraction, and many others) have not yet truly benefited from the productivity gains enabled by technology. After our 10+ years of existence, we still have the conviction that DeepTech startups will continue to create significant economic value by allowing these industries to access the exponential curve of technology development.
As shown in the graphic below, we live at the intersection of traditional sectors of the economy with transformational technologies driving innovation. This intersection is often in the form of startup companies offering software and hardware-driven solutions incorporating various foundational technologies such as AI and robotics.
Thus, our new DeepTech Growth Index is divided into companies falling into these six focused subsectors (that are further described below). Additionally, we highlight some of Promus Ventures’ portfolio companies that fit into these categories:
We believe there are a number of key fundamental enabling technologies driving the advances in these sectors. We categorize our investment focus across three transformational platforms:
Automation
We view automation broadly as the application of advances in artificial intelligence and machine learning to solve problems and unlock efficiency in all sectors and across society.
Connectivity and Compute
From innovation in semiconductors to advances in communication networks and protocols, we look at connectivity and computation as foundational substrates that many other industries and sectors leverage.
Enhanced Production
The confluence of advances in both automation and computing substrate and connectivity is particularly interesting when applied to efficiency in production. Given the incredible value it will unlock in many sectors of the modern economy, we view this as a transformational platform in its own right.
DeepTech Growth Index Components and Construction
Our index is a market cap-weighted index that tracks the performance of the combined DeepTech companies in the index. We also allow users to dive deeper and understand the relative performance of the various sub-sectors versus the overall DeepTech index and the S&P 500 and NASDAQ indices.
We have included in the index our analysis of the leading DeepTech companies, focusing on those with a market capitalization of $500M USD or greater. Our list is not exhaustive, as we have consciously decided not to include many important companies that drive innovation along multiple axes. Examples include the Hyperscale AI companies, who continue to innovate in DeepTech (i.e. Apple’s consumer devices, Alphabet/Waymo in autonomy, Amazon’s work in automation and robotics, and Microsoft’s developments with Hololens in AR/XR). We believe including these large market cap public companies would dominate and distort the index given their size, negating much of the analyses of sector performance.
The index will be rebalanced quarterly on the second Monday of January, April, July, and October. We do not currently consider dividends in the construction of our DeepTech index.
We hope you find this new DeepTech Index as useful as we do. Feel free to click here if you would like to receive our DeepTech Growth Index newsletter with more insights and analyses.
DISCLAIMER
Promus Ventures invests in early-stage DeepTech start-ups solving complex problems to advance everyday lives worldwide. Some of Promus Ventures’ leading portfolio investments include Rocket Lab (Nasdaq: RKLB), Whoop, Spire (NYSE: SPIR), Mapbox, ICEYE, Bellabeat, Swift Navigation, AngelList, Behavox, Gauss Surgical, Figure Eight, Isotropic Systems, Halter, Cobalt, Safehub, and numerous others.
This post and the information presented are intended for informational purposes only. The views expressed herein are the authors’ alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service.
While certain information contained herein has been obtained from sources believed to be reliable, neither the authors nor any of their employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, timeliness or completeness of this information. The authors and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
All financial data presented is aggregated from publicly-available data feeds from Yahoo Finance.
Recipients of this post are not to construe it as investment, legal, or tax advice, and it is not intended to provide the basis for any evaluation of an investment in any fund. Prospective investors should consult with their own legal, investment, tax, accounting, and other advisors to determine the potential benefits, burdens, and risks associated with making an investment in any fund.
Promus Ventures is a trademark of Promus Holdings, LLC. Used under license. Copyright 2023 Promus Ventures, all rights reserved.
