Securing funding can be a significant challenge for start-ups in the European deep tech sector. While Europe is prioritizing the creation of a vibrant ecosystem for deep tech companies, investors are concerned about low returns and high risks. This is compounded by the fact that many deep tech start-ups are at an early stage and might not have use cases for their technologies. Even the most optimistic predictions suggest widespread adoption of quantum computing is still a decade away, and the technology’s eventual uses remain unclear.
To encourage investment, national governments, and organizations like the European Institute of Innovation and Technology (EIT) are aiming to derisk investment in the deep tech sector. EIT runs programs that match start-ups with businesses, introducing them to mentors and, ultimately, investors as they move their research into the market. The organization is also working to create supportive ecosystems where start-ups can grow and thrive. The long-term vision of a start-up’s founder is also key when pitching deep tech concepts to investors.
However, the lack of early-stage investment is driving significant sums of funding from the US and Asia to European start-ups and scale-ups in later funding rounds. Nearly 50% of the $17.7 billion invested in European start-ups in 2022 came from these regions. This risks European intellectual property and technology moving abroad, which is a further concern for policymakers, who fear that the continent may miss out on fully exploiting the potential of new technologies.
