Amidst geopolitical tensions and unstable markets, the query of Europe’s capacity to climate the storms forward, particularly as President Trump appears intent on having his pound of tariffs from the continent, is looming massive.
However an in depth new report claims deeptech is poised to develop into a key pillar of Europe’s safety, protection, and future autonomy, particularly from the U.S.
Deeptech attracted €15 billion ($16.3 billion) in enterprise investments in 2024, in line with a 184-page report by enterprise corporations Lakestar, Walden Catalyst, Dealroom and the deeptech convention, Hi there Tomorrow. The report additionally discovered that just about one-third of all enterprise capital invested in Europe is now going to deep tech.
M&A exercise within the house elevated to $12.2 billion final yr, the report mentioned, but it surely additionally discovered that European deeptech startups nonetheless depend on the U.S. for exits. Moreover, 50% of the expansion capital raised by deeptech startups comes from exterior the continent.
Nonetheless, deeptech may be seen as a hedge in opposition to regular “momentum investing” amongst enterprise capitalists, mentioned the report.
The report’s co-author Lukas Leitner, additionally a deeptech investor at Lakestar, advised TechCrunch that whereas geopolitical tensions pose vital challenges, Europe must embrace the second, and deeptech may very well be the important thing that unlocks future resilience for the continent.
Nevertheless, the highway forward will not be with out challenges. The U.S. has a “flywheel impact” in deeptech whereas Europe’s ecosystem remains to be immature, Leitner famous. “We have now a flywheel within the ‘shallow’ tech scene. You see numerous second-time founders, popping out of Revolut and so forth, constructing nice firms. However not but from deeptech firms.”
“Europe has robust analysis establishments, engineering expertise, and supportive public sentiment for deeptech, however there should be coverage modifications to foster a tradition that helps taking dangers,” he added.
Arnaud de la Tour, the CEO of Hi there Tomorrow, mentioned that the notion that compute-poor Europe would all the time lag in AI was not too long ago challenged by the looks of open-source DeepSeek: “It’s an enormous alternative for Europe, as a result of we now have nice AI expertise […] Many wish to come again to Europe due to the geopolitical panorama. However we positively must have the suitable coverage framework so as to unlock the form of potential that we now have.”
Leitner identified that Europe’s relative weak point in computing energy is offset by its strengths in photonics computing, which presents main benefits in pace and effectivity. “We’re actually good in Europe with photonics, as a result of we now have good laser techniques, and we now have good basic analysis on the photonic aspect,” he mentioned.
De la Tour added that Europe may additionally reap the benefits of a brain-drain within the U.S. as science is defunded by the Trump administration. “The Nationwide Science Basis, which is the most important supporter of founder-applied analysis within the U.S. has had its price range minimize by half. Numerous these nice scientists don’t have a job anymore, and lots of may come to Europe,” he mentioned.
