Can Europe become the global centre of gravity for DeepTech? | EU-Startups

Europe’s DeepTech ecosystem is approaching an important crossroads. Across the continent, universities and research institutes continue to generate breakthrough science, supported by one of the world’s strongest pipelines of technical talent. The ingredients for globally relevant DeepTech companies are already present.

Japan’s recent commitment of more than €33 billion to European DeepTech and AI highlights this potential from the outside. It is a reminder that Europe has the scientific strength to shape future industries but has yet to fully prove that this research can consistently translate into scaled companies. Whether the region can build true technological sovereignty will depend on how effectively founders, investors, and institutions adapt to the long horizons and structural demands unique to DeepTech innovation.

The paradox facing European DeepTech

Forecasts suggest that European DeepTech could generate around one trillion dollars in enterprise value by 2030. While DeepTech as a whole is attracting a record share of European funding, early-stage rounds are down by 30% since their peak in 2021.

This also happens to be the stage where founders face some of their toughest hurdles. Long development cycles, highly technical milestones, and limited commercial traction make traditional venture investors hesitant. Many VCs acknowledge the importance of DeepTech but still default to evaluating companies through software-style metrics.

Japan’s current strategy highlights this gap. Its investment vehicles target Europe’s scientific innovation while offering industrial scale, manufacturing experience, and long-term capital. With the right investment structures, Europe can pair its research excellence with pathways that support long-cycle technologies. 

Europe’s structural advantages

Europe enters this moment with real strengths. Technical education is one of them. Across the EU, about one quarter of all Master’s degrees are awarded in STEM subjects. In countries such as Germany, more than one-third of tertiary graduates hold a STEM qualification. These numbers reflect a strong pipeline of technical talent.

Funding support is another advantage. Europe offers substantial grant programmes for early DeepTech work. The European Innovation Council provides grants of up to €2.5 million, along with potential equity financing. The EIC Pre-Accelerator supports smaller DeepTech organisations through grants of €300,000 to €500,000. These resources exist in meaningful volume. The challenge is not their availability, but how effectively founders integrate them into an investment strategy.

What founders can do to succeed

Founders can take several concrete steps to make an early-stage DeepTech fundable.

1. Teams need to speak both technical and commercial languages: When a company frames progress only through research milestones, investors struggle to understand how development connects to market outcomes.
2. Grants should be approached as essential capital: Competitive grant wins validate technical merit and extend runway, and they work best when paired with early venture support. For VCs, non-dilutive funding reduces risk perception and strengthens conviction around long-cycle technologies.
3. Create intermediate milestones that are understandable beyond specialist audiences: These may include paid pilots, environmental tests, regulatory-aligned prototypes, or limited-scope deployments with industry partners. They demonstrate motion, even if they are not final products.
4. Early commercial relationships matter: Many corporates in Europe sponsor pilots or co-development projects. Several major European companies, including Atos and Siemens, already operate innovation programmes that support early technical validation. These partnerships give founders something tangible to show investors.
5. Translate research timelines into business timelines: Industry expects predictable communication and steady progress. The scientific world allows long, exploratory cycles. Commercial environments do not.

Where European VCs can strengthen the early-stage environment

Europe’s venture ecosystem has an opportunity to evolve in parallel with the region’s scientific strengths. Generalist funds already play an important role at the earliest stages, yet specialised DeepTech VCs often benefit from investors who can draw on technical networks, industrial partners, or sector-specific knowledge. Expanding this pool of expertise, especially around seed and Series A, would create clearer roads for founders working on long development timelines.

Patient capital is also part of this shift. Many DeepTech companies progress through stages that resemble life sciences, where well-defined milestones and longer horizons are standard. European funds are already beginning to adopt elements of this approach as hard technology becomes more central to the economy. Life sciences investors in the United States have adapted to similar challenges, and their experience offers a useful reference point for European DeepTech venture capital as it develops its own investment frameworks. 

Europe’s sovereignty opportunity

Europe’s position in DeepTech relates directly to technological sovereignty. Japan’s investment programme shows that global actors see European research as a foundation worth building on at an industrial scale. This external confidence should motivate European institutions and investors to improve the early-stage environment rather than assume that technical excellence will translate into commercial leadership on its own.

The ingredients already exist. Europe has strong universities, a large population of STEM graduates, and grants that actually deploy capital. What is missing is alignment between founders who build long-cycle technologies and investors who can support them with expertise, patient capital, and structured pathways to commercial validation.

Final thoughts

DeepTech momentum in Europe depends on two shifts happening at the same time. Founders can increase their chances of success by building teams that translate science into market progress by using grants strategically and forming early partnerships. Investors can support this transition by expanding their technical networks, adopting long-term horizons, and developing evaluation frameworks suited to DeepTech trajectories. 

If both sides move in this direction, Europe can turn its scientific strengths into companies that scale and play a defining role in the next generation of global technology.