Thematics Venture Vision DeepDive in DeepTech

M Global FoundationThematicsVenture Vision: DeepDive in DeepTechMorgan Stanley & Co. International plc+Edward StanleyEquity Strategist Edward.Stanley@morganstanley.com +44 20 7425-0840 Matias OvrumResearch Associate Matias.Ovrum@morganstanley.com +44 20 7425-9902 Our Venture Vision weeklies look at (1) early-stage cross-theme funding patterns ; (2) relative valuations between themes ; (3) public versus private valuations; (4) the resulting anomalies within certain themes . Please let us know if you would like our excel database of >45,000 VC deals categorised by theme, country, value and date. We also send this file as a weekly distribution if you would like to receive it regularly. See here for our global market synopsis. See here for our longer analysis on the state of the VC market, particularly as it relates to non-US Venture and innovation acceleration. As social media brims with excitement and scepticism about room-temperature superconductors, it prompts us to wonder what the state of funding looks like for solving some of the world's biggest challenges: DeepTech.Macro Quotes of the week: First Citizens BancShares (uncovered acquirer of SVB's US assets) flagged in their 2Q results last week that the average legacy SVB venture start-up account balance had fallen 13% QoQ to $314k, dovetailing with a relatively sober outlook for the venture recovery:• “We anticipate that SVB clients will continue to experience a level of cash burn that exceeds funds sourced from fundraising. We're projecting a $4 - 6 billion decline (from $41bn at 1H) in the SVB deposit book through the end of the year.”• “While we see challenges in the broader market for the remainder of 2023, we are well poised to capture client funds once investment levels begin to increase likely in late 2024 and into 2025.”The latest hype in DeepTech - Superconductors: For those who have not heard about LK-99, its debated legitimacy and the reproductions being attempted around the world, the TLDR is as follows: a superconductor has no electrical resistance and does not allow magnetic fields to penetrate. Consequently, an electric current in a superconductor can persist indefinitely. If this can be done at room temperature (rather than the intensely cold temperatures to-date), then the real-world applications (once produced and scaled) could be transformative to power transmission (>100bn kWh wasted from cable loss each year), nuclear fusion plasma confinement, quantum computers, energy storage, electrical overheating, MRI machines and maglev trains amongst other uses (see our Asia tech team's summary here). The latest news on this topic suggests replicated samples of LK-99 are more likely Ferromagnets than superconductors.Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Researc