Amidst geopolitical tensions and risky markets, the query of Europe’s means 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 intensive new report claims deeptech is poised to turn 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 keeping with a 184-page report by enterprise corporations Lakestar, Walden Catalyst, Dealroom and the deeptech convention, Good day 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, nevertheless it 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, instructed TechCrunch that whereas geopolitical tensions pose vital challenges, Europe must embrace the second, and deeptech could possibly be the important thing that unlocks future resilience for the continent.
Nonetheless, the highway forward just isn’t with out challenges. The U.S. has a “flywheel impact” in deeptech whereas Europe’s ecosystem continues to be immature, Leitner famous. “We’ve got a flywheel within the ‘shallow’ tech scene. You see plenty of second-time founders, popping out of Revolut and so forth, constructing nice corporations. However not but from deeptech corporations.”
“Europe has sturdy analysis establishments, engineering expertise, and supportive public sentiment for deeptech, however there have to be coverage adjustments to foster a tradition that helps taking dangers,” he added.
Arnaud de la Tour, the CEO of Good day Tomorrow, mentioned that the notion that compute-poor Europe would at all times 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 undoubtedly must have the correct coverage framework with a view to unlock the type of potential that we now have.”
Leitner identified that Europe’s relative weak spot in computing energy is offset by its strengths in photonics computing, which gives main benefits in velocity and effectivity. “We’re actually good in Europe with photonics, as a result of we now have good laser programs, and we now have good elementary analysis on the photonic aspect,” he mentioned.
De la Tour added that Europe might additionally benefit from a brain-drain within the U.S. as science is defunded by the Trump administration. “The Nationwide Science Basis, which is the largest supporter of founder-applied analysis within the U.S. has had its price range reduce by half. Lots of these nice scientists don’t have a job anymore, and lots of might come to Europe,” he mentioned.
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