Hello, World (changers)

Everything you always wanted to know about European Deep Tech, and probably more.

Author

Robin Wauters
January 17, 2025

Welcome to the bi-weekly “Inside European Deep Tech” newsletter, compiled by Robin Wauters, founder of Profoundo and formerly founding editor and CEO of Tech.eu.

Let’s get to it.

Must-Reads

  • The incoming Commissioner for Startups, Research and Innovation, Ekaterina Zaharieva, will develop a network of ‘Trusted Investors’ to bring together deep tech investors across Europe to foster co-investments with the EIC Fund and greater knowledge, expertise and finance to grow deep tech startups.

    But … What is the newly launched EIC Trusted Investors’ Network (TIN) all about?

    » (Innovators Magazine)

  • The European Innovation Council (EIC) has released its 2024 Tech Report, highlighting 34 emerging technologies and breakthrough innovations that could shape the industries of tomorrow. Drawing on EIC’s internal data and the views of experts in the field, the report identifies early stage trends of novel technologies with the potential to make major impacts on economic growth, Europe’s technological independence, and secure its place on the global stage as a leader in the next generation of breakthrough innovation.

    » (EIC)

No need to open up ChatGPT for a report summary, AI’ve got your back:

1. Green Technologies

  • Agriculture and Environment: Advances include plant-based biomanufacturing, tri-parental breeding, and biohybrid sensors for precision agriculture. These innovations aim to improve food security, environmental resilience, and sustainable practices.

  • Energy and Climate Solutions: Focus areas include high-temperature thermal energy storage, enhanced sustainable aviation fuels, artificial photosynthesis for renewable fuels, and nanostructured materials for environmental remediation.

  • Built Environment: Technologies like dynamic air quality management systems, robotics in construction, and digital twins for hyper-realistic modeling aim to improve sustainability and efficiency in urban environments.

2. Health Innovations

  • Personalized Medicine and Diagnostics: Developments include metabolomics for disease detection, AI-driven digital biomarkers, and targeted protein degradation for drug discovery.

  • Regenerative Medicine: In-situ and 3D/4D bioprinting are set to revolutionize wound care and tissue regeneration.

  • Advanced Therapies: Innovations like FLASH radiotherapy and advanced imaging techniques aim to provide safer and more effective treatment options for complex diseases.

3. Digital, Industry, and Space

  • Advanced Computing and AI: Focus on neuromorphic chips, quantum computing, and AI-driven edge computing for sustainable and efficient technologies.

  • Semiconductors and Photonics: Developments in ultra-thin materials and photonic integrated circuits support breakthroughs in electronics and ICT.

  • Space Technologies: Advances in satellite systems, LiDAR for environmental monitoring, and flexible electronics for space applications align with Europe's strategic priorities in space exploration and resilience.

  • Europe’s industry increased investment in research and development by 9.8% in 2023, surpassing corporate R&D investment growth in the US (+5.9%) and China (+9.6%) for the first time since 2013.

    » (EUBusiness)

  • In related news, the just-published EU Industrial Research and Development (R&D) Investment Scoreboard aims to serve as a vital tool for tracking and comparing the performance of the EU's top industrial R&D investors with their global counterparts.

    » (European Commission)

Data, Research & Insights

  • European deep tech: What investors and corporations need to know

    » (McKinsey)

No need to open up ChatGPT for a report summary, AI’ve got your back:

Europe's deep tech sector is experiencing significant growth, positioning the continent as a potential leader in global innovation. From 2019 to 2023, Europe's share of global deep tech investment nearly doubled from 10% to 19%, with deep tech comprising approximately 44% of all tech investments in Europe by 2023.

Investments in deep tech have yielded strong returns, consistently outperforming traditional tech sectors. Since 2003, deep tech investments have delivered an average annual internal rate of return (IRR) of 16% after fees, compared to 10% for traditional tech investments.

Despite this progress, European corporations remain cautious investors; approximately 60% of the region's top acquisitions have been made by non-European entities. Addressing this requires a strategic approach to enhance Europe's deep tech ecosystem.

The sector encompasses eight investment areas:

  1. Novel AI: Including autonomous systems and explainable AI.

  2. Future of computing: Such as quantum computing and brain-computer interfaces.

  3. New energy: Covering green hydrogen and waste heat recovery.

  4. Space technology: Encompassing nanosatellites and space mining.

  5. Robotics: Including humanoid robots and nanorobotics.

  6. Biotechnology, food tech, and agritech: Such as lab-grown foods and AI-driven drug discovery.

  7. Defense technology: Covering cybersecurity and drone technology.

  8. Advanced materials: Including green concrete and nanomaterials.

Contrary to common misconceptions, deep tech start-ups have similar success rates, timeframes to achieve unicorn status, and scalability compared to traditional tech start-ups. Notably, deep tech start-ups have a higher likelihood of reaching unicorn status, with 0.62% achieving this milestone compared to 0.54% of digital tech start-ups.

To capitalize on deep tech's potential, Europe should:

  • Foster collaboration: Encourage partnerships among universities, research institutions, policymakers, and corporations.

  • Increase investment: Mobilize more late-stage, deep tech-focused capital to support growth.

  • Enhance competitiveness: Implement policies that promote entrepreneurship and global competitiveness.

By adopting these strategies, Europe can strengthen its position in the deep tech sector and drive future innovation.

  • Unlocking Europe’s €8 Trillion Deep Tech Opportunity

    » (Boston Consulting Group)

  • European Deeptech Trends 2024

    » (Avolta)

  • What’s in store for deeptech in 2025? Experts weigh in

    » (Sifted)

Oh you wanted another AI summary?

In 2025, deep tech trends include:

  1. Consolidation: Increased mergers and acquisitions, especially in AI, space tech, and semiconductors.

  2. AI Dominance: Focus on real-world data and cross-sector applications, maintaining high valuations.

  3. Energy Innovation: Emphasis on nuclear fusion to meet rising energy demands.

  4. Space Progress: Advancements in spacecraft propulsion and efficiency.

  5. Data & Computing: Breakthroughs in quantum computing, 3D chips, and AI hardware bottlenecks.

  6. Defense Tech Growth: Larger contracts for European startups, fueled by NATO and government spending.

AI and energy solutions will lead growth across sectors.

  • New figures released by Balderton Capital and Dealroom reveal that despite a flat year for overall VC investment, European AI companies have doubled in value in just four years.

    » (Tech.eu)

  • AI, deeptech and European resilience: 10 predictions for German tech in 2025

    » (Sifted)

  • The State of the French Tech Ecosystem 2024 - "A Tale of Two Cities"

    » (Overlooked by Alexandre Dewez)

  • Nordic defence tech report – 2024

    » (Dealroom)

  • 2025 tech trends for Europe: What experts say will dominate the industry

    » (Tech Funding News)

Interesting Deals

  • NXP Semiconductors is acquiring TTTech Auto in an all-cash transaction valued at $625 million. TTTech Auto, based in Vienna, Austria, develops safety-critical systems and middleware for software-defined vehicles (SDVs).

    » (Tech.eu)

  • German developer of large-scale battery storage systems green flexibility has received over €400 million in funding from Partners Group.

    » (PE Hub)

  • Synthesia snapped up $180 million at a $2.1B valuation for its B2B AI video platform.

    » (TechCrunch)

  • France and US-based Loft Orbital raised $170 million to expand space infrastructure service.

    » (SpaceNews)

  • XOCEAN, a provider of ocean data to the offshore energy and civil hydrography sectors, has closed a €115 million round in order to undertake more international expansion.

    » (Tech.eu)

  • German robotics startup Neura Robotics raises €120m Series B

    » (Sifted)

  • Voima Ventures has closed its €100M+ Fund III, focused on supporting early-stage science and deep tech startups across the Nordic and Baltic regions.

    » (ArcticStartup)

  • Swave Photonics, a fabless semiconductor company based in Leuven, Belgium, has closed a €27 million Series A funding round.

    » (Silicon Canals)

  • Evercurious VC, a new €12.5 million venture capital fund, has officially launched with the goal of connecting Greece’s emerging deep tech ecosystem with Europe’s leading innovation hubs, such as Zurich, Munich, and Berlin.

    » (The Recursive)

  • Europe’s Imec.xpand is spinning out memory chip firm Vertical Compute in a seed investment round worth $20.5 million.

    » (Venturebeat)

  • As part of the StepUp Startups project, the European Commission recently published a report named “Beyond Fragmentation: Connecting Europe’s Startup Ecosystems for Growth and Innovation“, aiming to enhance collaboration, innovation, and growth within Europe’s diverse startup ecosystems.

    » (European Commission)

  • Is Your Deeptech Startup Truly Scalable and Value-Driven?

    » (Vivian's Deeptech Insider)

  • The Draghi report grabbed Europe’s attention. Now it’s time for the EU to put it into action.

    » (Atlantic Council)

  • Speedinvest’s Oliver Holle & OpenOcean’s Ekaterina Almasque on how to identify the next AI investment sweet spot

    » (EUVC)

  • “Will you seize the $100+ billion climate tech opportunity or watch governments roast the planet?”

    » (Francesco Perticarara on LinkedIn)

  • From Lab to Launch: Strategies for Building a Successful Deep Tech Startup

    » (Deep Tech Catalyst)

  • Europe’s defense strategy needs to be stronger — and smarter

    » (Arab News)

  • Peter Sarlin's Foundation PS boosts AI research in Finland with major donation of 13 professorships

    » (Tech.eu)

Upcoming events in Europe (Q1 2025)

  • 29-31 January — sTARTUp Day — Tartu, Estonia 🇪🇪 

  • 5-7 February — TechChill — Riga, Latvia 🇱🇻

  • 20-21 February — Techarena — Stockholm, Sweden 🇸🇪

  • 26-27 February — AI Festival - Milan, Italy 🇮🇹

  • 3-6 March — 4YFN — Barcelona, Spain 🇪🇸 

  • 13-14 March — Hello Tomorrow — Paris, France 🇫🇷 

  • 20-21 March — START Summit — St. Gallen, Switzerland 🇨🇭 

  • 25-26 March — Tech.eu Summit — London, UK 🇬🇧

The scrolled-all-the-way-down extras

“This brings me to my point for the day: most people, including many of you reading this, just aren't cut out to be online so much, particularly not on social media. It's not great for the vast majority of people's mental health. So log off more. Delete the apps from your phone. Go for more walks. Get some fresh air and sunshine. Talk to loved ones more. You'll feel much better.”

  • FP10, the EU’s flagship research and innovation funding programme due to start in 2028, is unlikely to have a budget of €220 billion.

“Of course, I’m going to work on increasing the budget for the next [Framework] Programme, no doubt about that, but to promise that it will be double is not realistic,” Zaharieva said. “We really have budget constraints.”

“In other words, it’s not enough that your company exists and does groundbreaking things – it has to fit into a bigger story that people can relate to.”

  • Watch out Spot, this robot dog from Switzerland can do parkour.

“Apart from doing tricks, ANYmal also has a real job. It does routine inspections in some of the toughest places on Earth. Think old nuclear power plants, abandoned mines, and offshore oil rigs.”