Europe is doubling down on deep tech investing, with a $16.3 billion (€15 billion) invested in 2024, accounting for nearly one-third of all venture capital on the continent, according to the 2025 European Deep Tech report.
“The 2025 European Deep Tech Report,” by venture firms Lakestar, Walden Catalyst, Dealroom, highlighted that despite the momentum, 50% pf growth capital for European deep tech startups comes from outside Europe, often demanding US exists for scaling.
The report revealed a higher need for stronger deep tech projects and local investment ecosystems to reduce the EU’s dependency on foreign funding. These deep tech investments in Europe represent almost one-third of all venture capital entering the continent.
Despite progress, there are still challenges, particularly for European deep tech startups in scaling companies without relying on the US for major capital.
Addressing Europe’s Deep Tech Companies Gap
Lukas Leitner, co-author of the report and a deep tech investor, acknowledges Europe is at a crossroads. Geopolitical tensions highlight challenges but also create opportunities.
“Europe needs to seize the moment, and deep tech could be that key that opens the door to the future resilience of the continent,” he told TechCrunch.
Leitner added that unlike traditional tech, there is no strong “flywheel effect” among deep tech in Europe, where founders return to launch new ventures.
“We have a flywheel in the ‘shallow’ tech scene. You see a lot of second-time founders, coming out of Revolut and so on, building great companies. But not yet from deep tech companies,” Leitner highlighted.
With all that said and nearly done, Europe’s deep tech investors have key strengths:
- World class research centers;
- Rich pool of engineering talent;
- Massive public support for innovation.
But policies need to shift for Europe to fully unlock its potential, as “there have to be changes in the policy in order to develop a culture for taking risks,” as Leitner emphasized.
Arnaud De la Tour, the CEO of Hello Tomorrow believes that the narrative of Europe lagging in AI is being reversed, referencing the creation of open-source AI projects, like DeepSeek, which demonstrate that Europe can compete by establishing that Europe is able to support the talent.
De la Tour added that “It’s a huge opportunity for Europe, because we have great AI talent … Many are looking to come back to Europe because of the geopolitical landscape. But we definitely need to have the right policy framework in order to unlock the kind of potential that we have.”
Different Technological Identity
Instead ofputting up with the pace of the US, Europe is building a distinct tech state in emerging fields in deep tech investing like photonics computing, something that it has a lead on.
“We’re really good in Europe with photonics, because we have good laser systems, and we have good fundamental research on the photonic side,” Leitner said, referring to Europe’s tech future may not lie in competing for dominance in mass market computing but in dominating in cutting edge areas.
Another unexpected gain for Europe could be from a US brain drain, as scientific research is subjected to Trump and Musk’s recent wave of budget cuts linked to research that could push investing in deep tech. De la Tour highlighted that Europe has hoped on the train of taking advantage of the US as it is being defunded by Trump’s administration.
“The National Science Foundation, which is the biggest supporter of founder-applied research in the US has had its budget cut by half. A lot of those great scientists don’t have a job anymore, and many could come to Europe,” De la Tour said.
The European deep tech investors revolution isn’t just about achieving independence, it’s about forging a new vision for leadership through complete digitalization.
When tech evolves in areas where it has great strengths and constructs a supportive environment for risk taking, the region can have the chance to set the time for the next generation of technological innovations. If successful, Europe’s deep tech investing won’t just catch up, but it will lead on its own terms.
Inside Telecom provides you with an extensive list of content covering all aspects of the tech industry. Keep an eye on our Tech sections to stay informed and up-to-date with our daily articles.